TLDR
Budget-capped Google Ads campaigns no longer bend their targets: smart bidding now optimises toward the advertiser's set Target CPA or Target ROAS even when budget runs short, a change live since 17 August. Advertisers running 'Limited by budget' campaigns should check the Bid Target Adjustment Tool before performance swings hit.
KEY TAKEAWAYS
Budget-capped Google Ads campaigns work differently from 17 August 2026. Google is updating its bidding systems to make it easier to get more consistent and predictable performance based on the targets advertisers set, even when budgets are adjusted. Campaigns marked 'Limited by budget' using Target CPA or Target ROAS strategies now optimise consistently toward the advertiser's set targets.[1] Before this change, budget constraints caused these strategies to drift away from the entered target.
The practical effect: if your Target CPA sits at $40 but your daily budget caps spend, the system tries to hit $40 per conversion rather than harvesting whatever conversions the remaining budget allows. That sounds cleaner. The transition period is less tidy.
Google's documentation indicates that these changes may cause temporary performance volatility and traffic fluctuations for campaigns running Target CPA or Target ROAS that carry a 'Limited by budget' status.[2] Volume could dip while the algorithm reorients. Accounts chasing aggressive targets on tight budgets will feel this most.
The Bid Target Adjustment Tool has been live since 6 July. It guides advertisers through reviewing and updating bid targets based on recent actual performance, helping maintain efficiency once the new bidding system rolls out.[1] If your entered Target CPA or Target ROAS sits far from what the account actually delivered over the past few weeks, the system now chases that gap rather than working around it. Close the gap before it does.
One labelling change is worth clearing up. [3] Josh Braverman, Group Product Manager at Google Ads, said the June 2026 update to bidding strategy labels was about offering greater clarity between volume-focused and target-focused goals. The underlying bidding behaviour was unchanged. The name changed; the mechanic did not.
Small and mid-sized advertisers running perpetually budget-constrained campaigns carry the most exposure here, particularly where the entered target and delivered performance have drifted apart. Open the Bid Target Adjustment Tool, compare your set target against recent performance data, and update before the system treats the gap as an instruction.
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
Which campaigns does the 17 August Google Ads change affect?
What is the Bid Target Adjustment Tool and where do I find it?
Did Google change how Target ROAS bidding actually works in June 2026?
Jonas Valenti writes about search and how businesses get discovered. He has spent years watching what makes a company visible online, and is unsentimental about tactics that no longer work.
