On August 17, Google changed how Smart Bidding works for campaigns with the Limited by budget status. The algorithm will now follow the set Target CPA or Target ROAS more closely, even if the campaign previously delivered results that were consistently better than the set target.
Google itself provides a simple example. Suppose a campaign has a Target CPA of $10, but it actually generates conversions at $5. Previously, this gap could remain in place when the budget was limited. Now, the system may gradually move the actual CPA closer to the set $10.
This is important for media buyers who deliberately set their Target CPA with a buffer. If a lead at $7 is acceptable, while the target in Ads Manager is still set to $15, you should no longer expect Google to continue maintaining the previous cost.
Which campaigns are affected by the update
The change applies to campaigns with the Limited by budget status and works with Target CPA and Target ROAS in:
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Search;
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Shopping;
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Performance Max;
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Demand Gen;
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Travel.
In Demand Gen, the change also applies to campaigns with Target CPC. Campaigns that are not limited by budget are not affected by the update.
What to do
Google launched the Bid Target Adjustment Tool in advance, which helps identify campaigns where the set target differs significantly from the actual results.
First, review campaigns with the Limited by budget status and check their current Target CPA and Target ROAS. If the settings have not been reviewed for a long time, it is better to align them with the conversion cost or return at which the campaign setup remains profitable. Google will not automatically change targets or daily budgets after the update.
