Google Is Ending Target Overperformance: What You Need to Fix Before August 17

Google’s upcoming Smart Bidding change has sparked a lot of discussion in the PPC community. Beginning August 17, Google will fundamentally change how budget-limited campaigns utilizing Target CPA (tCPA) or Target ROAS (tROAS) behave, forcing them to optimize much more closely toward their stated bidding targets.

For advertisers who have historically relied on the “gap” between their stated target and their actual, overperforming metrics to maintain efficiency, the clock is ticking. Here is a breakdown of what is changing, why Google is doing it, and exactly what you need to audit before the deadline.

What is Changing on August 17?

Historically, many advertisers intentionally set their Target CPA or Target ROAS artificially high (or low) while keeping daily budgets constrained. This allowed campaigns to consistently overdeliver and outperform the stated target, acting as a failsafe to ensure peak efficiency inside a fixed budget.

Starting August 17, budget-limited tCPA and tROAS campaigns will stop overdelivering. Instead, Google’s Smart Bidding algorithms will strictly optimize to meet the target you actually inputted. If your campaign currently has a wide gap between the stated target and its actual performance, you risk suddenly paying more for the exact same volume of conversions once the update rolls out.

Which Campaigns Are Affected?

This update does not apply across the board. It is specifically targeted at budget-limited campaigns. If your campaigns are fully funded (not restricted by budget limits), they will not behave any differently.

Campaign types affected by the update:

• Search
• Shopping
• Performance Max (PMax)
• Demand Gen
• Travel
• Search Ads 360
• Demand Gen campaigns in Display & Video 360

Campaign types EXCLUDED from the update:

• App Campaigns
• Video Reach
• Video View
• (Note: Hotel and standard Display campaigns already optimize this way and will see no change).

Why is Google Making This Change?

While the PPC community has had mixed reactions, Google’s reasoning addresses a legitimate scaling problem.

Before this update, if an advertiser wanted to scale up a budget-limited campaign that was heavily overperforming its tCPA or tROAS, increasing the daily budget often produced wild, inconsistent results. Some campaigns would maintain efficiency, while others would suddenly derail. By forcing the algorithm to adhere strictly to the stated target, Google aims to make budget scaling much more predictable. When you increase the budget, the campaign should now predictably chase the stated target rather than swinging erratically.

Action Plan: What You Need to Fix Now

Google introduced a Bid Target Adjustment Tool on July 6 to help advertisers prepare. You have until August 17 to review and adjust your accounts. Here is your immediate checklist:

1. Identify Budget-Limited Campaigns: Filter your account for campaigns currently flagged as “Limited by budget” that also use tCPA or tROAS bidding.
2. Audit the “Target Gap”: Look at the stated Target CPA or ROAS versus the actual historical CPA or ROAS over the last 30 to 60 days.
3. Adjust Targets to Reflect Reality: If a campaign has a tCPA set to $50, but it is consistently bringing in conversions at $30 due to budget constraints, you need to lower your stated tCPA closer to $30. If you leave it at $50, the algorithm will begin bidding aggressively up to that $50 mark on August 17, unnecessarily inflating your costs.
4. Use the Bid Target Adjustment Tool: Navigate to the recommendations tab in Google Ads and use the newly provided tool to apply recommended adjustments safely before the deadline.

By auditing these gaps now, you can lock in your current efficiency and avoid unexpected cost spikes when the algorithm switches gears.