Google Ads Smart Bidding Update: What Advertisers Should Do Before August 17

If you are a Google Ads Account manager, you have likely started to see a message pop up in your accounts: 

“Review your campaign targets. Starting August 17, 2026, campaigns with bid targets (for example CPA, or ROAS target) will provide more consistent performance when limited by budget, even after budget adjustments. Review these campaigns to ensure targets align with your objectives; targets will not be updated automatically.”

You may be tempted to ignore this message. But don’t. As Google rolls out this Smart Bidding update, we walk you through what it means, how it may impact your accounts, and how to adjust strategies in time for the August 17th deadline.

What Is Changing & Why Is the Smart Bidding Update Important?

The Google Ads Smart Bidding Update applies to campaigns that use Target CPA or Target ROAS and show a "Limited by budget" status. Currently, these campaigns often overachieve their goals (e.g., getting you a cheaper cost-per-conversion than your set target). With the new update, Google will force these campaigns to align much more strictly with your entered targets. This means if your Target CPA is set to $10 but you've actually been enjoying a $5 CPA, your costs will likely rise toward $10 in August unless you update your settings. 

If you have a campaign that is outperforming targets and don’t do anything in time for this change, it could be a painful shift, leading to a decline in ROAS or spike in CPA.  

Google will not be making the changes to your target CPA or ROAS, so it’s critical that you take action before the deadline.

What Campaigns Are Affected?

This change affects campaigns that:

• use Target CPA

• use Target ROAS

• are frequently marked Limited by Budget

Campaigns with sufficient budget are not expected to behave differently under this update. 

What Steps Should You Follow In Response to Google Ads Smart Bidding Update?

Here are the key steps to follow:

Step 1: Audit Campaigns

Audit the account and identify campaigns that use Target ROAS and Target CPA bid strategies.

Step 2: Identify Campaigns Limited by Budget

Identify campaigns that use Target CPA or ROAS and at the same time are flagged as “Limited by Budget.”

Step 3: Evaluate Performance

Pull at a minimum the last 30 days of performance data on identified campaigns and evaluate if recent performance is outperforming the set target. For example:

• Scenario 1: Current target CPA is $50 but actual CPA is $40; 

• Scenario 2: Current ROAS target is 250% but actual ROAS is 500%. 

  
  

In the above two scenarios, those campaigns would experience a jump in CPA from $40 to $50 and the ROAS one would see a drop in ROAS from 500% to 250%.

Note: Make sure to take into account your specific account context, including any seasonality considerations or sales promos that impacted recent performance, and consult additional performance data time frames, as relevant to your business.

Step 3: Adjust Targets

Adjust the targets towards the actual performance, to bring them in line with your results.

Step 4: Ongoing Monitoring

Re-evaluate the changes to bids as conversion data accumulates.

Tools Are Available To Help Manage This Transition

To help with the transition, Google has rolled out a Bid Target Adjustment Tool in Google Ads. The tool highlights campaigns where your current Target CPA or Target ROAS no longer reflects recent performance and suggests updated bid targets for review. It will pop up in your account after you log in and will automatically pull the impacted campaigns, along with their suggested adjustment.

While it's a useful reference point, we recommend that you still review each suggestion alongside your goals, targets and recent campaign performance prior to applying it. In addition, in testing the tool, we've noticed that it does not yet provide suggestions for all impacted campaigns. With this in mind, we recommend that you revisit the tool more than once before the August 17th deadline, and that you perform a weekly review of campaign performance after you apply the recommended adjustment.

This update is also a good opportunity to figure out what your break even and profitable ROAS and CPA targets are in the first place. If you’re not sure how to do so, our ROAS calculator guide and our CPA benchmark calculator guide are helpful starting points, and they include free calculators for figuring these out. 

The Silver Lining 

While many view this update as “a money grab” by Google, not everything about it is negative. 

One long-standing frustration with Smart Bidding has been unpredictable performance after budget increases. The update should address this issue by making performance more predictable for those with limited budgets, since campaigns will optimize toward stated CPA or ROAS targets instead of changing behavior as budgets increase. 

Still, make sure you prepare ahead of the deadline by following our recommended steps above.