What happened
Google published the specifics of a Smart Bidding change taking effect August 17, 2026: campaigns on a target-based bid strategy that sit in 'Limited by budget' status will bid more strictly toward their stated target, instead of settling well away from it the way budget caps often allow.
The scope per Google's help page: Search, Shopping, Performance Max, Demand Gen, Display, Hotel, and Travel campaigns. App campaigns and video reach and view campaigns keep the old behavior. And Google states it 'will not automatically adjust your bidding targets or budgets' — the enforcement changes, the numbers you set do not.
You are not walking in blind. A Bid Target Adjustment Tool has been live in Google Ads since July 6, built to review historical performance and reset targets before the cutover. Google's own menu of responses: keep your targets, apply suggested adjustments, set custom ones, switch to Maximize Conversions or Maximize Conversion Value, or raise budgets.
Why this matters
Here is the cushion that disappears. A budget-capped campaign with a target-based strategy often over-delivers on efficiency: the cap forces the system to be choosy, so actual CPA lands under the target or actual ROAS lands over it. Plenty of accounts carry targets that were set loosely — or aspirationally, or two years ago — precisely because the budget cap did the real disciplining. After August 17, the target does the disciplining. If yours is looser than reality, expect performance to converge toward it.
There is a legitimate upside Google is selling: predictability. When targets are honest, stricter enforcement means you can raise budgets without efficiency lurching around. But notice that 'increase your budgets' appears on Google's list of recommended responses — it always does. Take the predictability, and make the budget decision on your own economics.
Timing compounds the stakes for stores. The change lands mid-August, right as ecommerce accounts start building toward Q4, and budgets move around a lot in that stretch. Every budget adjustment on a capped campaign will now interact with a strictly enforced target. Audit in the next two weeks and you make those calls calmly; skip it and you'll be diagnosing efficiency shifts in the middle of your busiest quarter.
What to do about it
Pull your exposure list today
In Google Ads, filter for campaigns showing 'Limited by budget' and cross-reference which run tCPA or tROAS. Include Display, Hotel, and Travel campaigns — Google's help page lists them alongside Search, Shopping, PMax, and Demand Gen. That list is where the change bites.
Compare delivered performance to the stated target
For each exposed campaign, check recent actual CPA or ROAS against the target you set. A wide gap in your favor is the cushion at risk. Use the Bid Target Adjustment Tool — live since July 6 — to reset targets to what the campaign genuinely achieves, on your terms.
Decide campaign by campaign, not account-wide
Google offers five outs, from custom targets to switching strategy entirely. The right answer differs by campaign economics. A blanket switch — or a blanket budget raise — is the lazy version of this audit.
Book a post-cutover check
Put a review in the week after August 17. Watch spend pacing and efficiency on every campaign from your exposure list; anything converging hard toward a stale target is your signal that a reset came too late.