Google Ads Bidding Update: What Changed on 17 August 2026

Google's new bidding rules mean your budget-limited campaigns will cost more per conversion

If you manage Google Ads accounts, you may have already noticed something changing in your budget-limited campaigns since the middle of August. Unfortunately, this wasn't a glitch or a temporary blip, it was a deliberate update from Google and it's going to affect how much you pay for each conversion going forward.

The change came into effect on 17 August 2026 and it alters how Target CPA and Target ROAS campaigns behave once they hit their budget ceiling. If you run Search, Shopping, Performance Max or Demand Gen campaigns on a target-based bid strategy, this update needs your attention, because it isn't something that will get fixed on its own.

What Google actually changed

Up until this update, budget-limited campaigns often quietly beat their stated targets. Say you set a Target CPA of £10. In practice, because the campaign was capped by budget, Smart Bidding might have been finding conversions for closer to £5. So you were getting the outcome you wanted and you were actually getting it more efficiently than you'd asked for.

But from 17 August, Google closed that gap. Budget-limited campaigns on Target CPA, Target ROAS, or Target CPC for Demand Gen will now be pushed to perform much closer to the actual number you typed into the target field, rather than the better rate the algorithm had been finding on its own.

The bakery way of thinking about it

Imagine you go to the same bakery every day with exactly £10 to spend and the cake you want to buy is priced at £10. Most days, the baker is generous. Some days you get two cakes for your £10, working out at £5 each. Other days it's just the one cake at full price. Either way, you're never paying more than your £10 and more often than not you're getting decent value.

Now the baker has decided that's going to stop. From now on, it's one cake for £10, every single day, no more surprise two-for-one days. You still have your £10 and you still walk out with cake. But the days where your money stretched further, are sadly gone. That's essentially what's happening to a lot of Target CPA and Target ROAS campaigns. Essentially, the budget hasn't changed but the value has.

Why this matters for your reported performance

This does affect spend, just not in the way you'd expect from a headline about a budget change. Your caps stay the same, but what that budget buys shifts. If your account had been converting well under target for a while, your reported cost per conversion is likely to rise and the same money will produce fewer conversions than it did before 17 August. That's a direct change to what your spend is achieving, even though the figure on the budget line itself hasn't moved.

Google made the Bid Target Adjustment Tool available from 6 July 2026, giving advertisers a 6 week window to review affected campaigns before the change went live. If you haven't looked at this yet, it's not too late, but the campaigns that were quietly overperforming are the ones most worth auditing now. You can find the tool on your Google Ads interface.

Why this matters for your reported performance

The sensible starting point is working out which of your campaigns were genuinely benefiting from this quiet overperformance. Pull up your Target CPA and Target ROAS campaigns and compare the stated target against actual recent performance. Anywhere there's a wide gap, that's a campaign that's going to feel this change.

From there you have a few choices.

1. You can lower your target to match what you were actually achieving, which should help maintain something closer to your previous volume.
2. You can increase the budget so the campaign is no longer classed as limited, taking it out of scope for this change (though it will likely find the limits of the budget soon, so this isn’t a permanent solution).
3. Or you can simply accept the shift and adjust your expectations for cost per conversion, treating the new numbers as the honest baseline going forward.

Whatever you choose, the one thing worth avoiding is doing nothing and being caught out by a sudden change in your reporting a few weeks from now with no explanation ready for whoever's asking about it.

The accounts nobody's been watching are the ones most exposed

This update can be fine if someone's actively managing your campaigns and checking targets against actual performance. It's a different story for accounts that were set up months or years ago and left to get on with it. Plenty of businesses have Target CPA or Target ROAS campaigns running on targets nobody's revisited since they were first entered, often because things were working well enough that nobody had a reason to look.

Without someone checking in, there's no one to notice when cost per conversion or ROAS starts climbing after 17 August and no obvious reason for the change unless you already know this update happened.

We saw this play out with one of our own ecommerce clients, an account running a Target ROAS strategy that's been sitting above 850% ROAS. Because we'd reviewed and adjusted the relevant targets before 17 August rather than after, the account has held up noticeably better than it would have done left untouched. The difference came from checking the numbers against the update ahead of time and making the changes while there was still a window to do it.

If you haven't been through your budget-limited campaigns since 17 August, do it this week rather than next month. A short audit now beats an unexplained spike in cost per conversion showing up in a client call. And if you'd rather have someone else run that audit while you get on with everything else on your plate, that's exactly the sort of thing we're set up to do.