If you run Target CPA or Target ROAS campaigns that are limited by budget, Google made a change on August 17 worth your full attention. It’s quiet, it’s technical, and it’s the kind of update most business owners never hear about until their cost per lead climbs and nobody can tell them why.
I’ve been managing Google Ads accounts for over 20 years. Here’s exactly what changed, what it means for your numbers, and what to do next.
Before August 17, if your campaign was limited by budget and running Target CPA or Target ROAS, Google’s algorithm often quietly overperformed. You’d set a Target CPA of $10 and the account would settle in at $5. Nobody complained. That gap was free efficiency, and a lot of advertisers didn’t even realise it was happening.
From August 17 onward, that gap closes. Google now steers budget-limited campaigns closer to the actual target you typed into the account, even when you adjust your budget. Google’s own example is a $10 Target CPA campaign delivering $5. After the change, it moves closer to $10. The reverse applies for ecommerce: a Target ROAS of 300% running at 600% will drift back toward 300%.
This affects Search, Shopping, Performance Max, Demand Gen, and Travel campaigns. Display and Hotel already work this way. Manual CPC and Target Impression Share aren’t touched, and neither are App, Video Reach, or Video View campaigns.
Two conditions have to be true at once for your campaign to be affected: it has to be flagged “Limited by budget,” and it has to be running a target-based strategy. If either isn’t true, this doesn’t apply to you.
Predictability is the whole point, and to be fair to Google, it delivers. Once your targets are aligned with reality, increasing your budget behaves the way you’d expect. Scale the spend and the cost per lead stays roughly where you set it, instead of jumping around unpredictably. For advertisers who’ve been frustrated forecasting results after a budget change, that consistency is genuinely useful.
It’s also a forcing function. A lot of accounts are sitting on targets set months or years ago and never revisited. This is a good excuse to check whether those numbers still reflect your actual margins and goals.
The obvious one. If your account has been quietly overperforming, you’re about to lose that advantage unless you act. Cost per lead can rise, return on ad spend can fall, and it happens without any alert saying “your results just got worse.” It shows up in reporting a few weeks later, as a slow drift rather than a sudden cliff.
The other risk is timing. Some accounts hit “Limited by budget” status during a seasonal peak and haven’t touched it since. Google’s lookback window is 12 months, so a target set for a busy period might still be governing your account today, completely disconnected from current reality.
Say you’re a home services business running Target CPA at $80 a lead, but the account has actually been delivering at $45 because it’s been budget constrained. Before August 17, that $45 was your reality. After the change, if you leave the target untouched, the campaign drifts back toward $80. Same budget, potentially double the cost per lead, and no obvious reason why unless you know this update happened.
Pull every campaign flagged “Limited by budget” over the past 12 months that’s running Target CPA or Target ROAS. Compare actual recent performance against the stated target. A big gap means that campaign is exposed.
Prioritise by money at risk, not the size of the percentage gap. A campaign spending $500 a month with a big gap matters less than one spending $20,000 a month with a smaller gap.
Use Google’s Bid Target Adjustment Tool, live in your account since July 6, to review affected campaigns. You’ve got three real options: lower your target to match recent actual performance and lock in that efficiency, set a custom target based on your genuine business economics, or leave it as is and accept that performance shifts back toward the old number.
If you’re increasing budgets on these campaigns, do it gradually over a few weeks and watch performance between each step.
This is the question I expect a lot over the coming weeks. You’ve updated your targets and the numbers still aren’t behaving. A few things to try next.
Check whether the campaign is still actually limited by budget. If it isn’t, this update isn’t your issue, and the problem sits elsewhere, like auction competition, seasonality, or conversion tracking accuracy.Analytics and Tag Manager Training
Widen your performance window. Thirty days is fine for high volume campaigns, but with thinner data, look at 60 to 90 days before drawing conclusions. A short-term spike can look like a bidding problem when it’s actually just noise.
Reconsider whether Target CPA or Target ROAS is still the right strategy. Switching to Maximize Conversions or Maximize Conversion Value without a strict target lets the algorithm chase volume more freely, though it can cause more fluctuation as budgets move.
Check your conversion tracking. This update touches all conversion types, including offline and view-through conversions. If tracking has drifted or duplicated somewhere, you’ll be optimising toward the wrong number no matter what target you set.
If none of that shifts things, it’s probably less about this update and more about the account structure underneath it.
Bidding changes like this one are exactly why so many business owners end up overpaying for leads without knowing why. If you want a second set of eyes on your account, or you’d rather have someone who’s spent 20 years in Google Ads sort it out with you directly, book a free 15-minute discovery call. No account managers, no middlemen, just me looking at your account and telling you straight what’s going on.
