From 17 August, Smart Bidding will respect Target CPA and Target ROAS regardless of whether a campaign is limited by budget. Campaigns that have been consistently outperforming their stated target will start optimising toward that target rather than exceeding it because there was not budget available to spend.
Google’s framing is stability. Under the current behaviour, changing a budget can force Smart Bidding to readjust from the efficiency it happened to be delivering back toward the campaign’s stated target, producing a period of volatility. Google says holding the bidding target constant regardless of budget makes those transitions smoother.
That reasoning holds. It also happens to change what a lot of accounts have been doing without saying so out loud.
Key Highlights
- 17 August: Rollout date confirmed by Google Ads Liaison Ginny Marvin ahead of launch
- tCPA / tROAS: Becomes the primary lever for controlling efficiency, budget cap or not
- Zero: Impact on campaigns that aren’t budget constrained — those already bid to target
The Workaround Google Is Closing
A conservative target plus a hard budget cap has functioned as a de facto efficiency control for years. Set tROAS at 400%, cap the budget, and let delivery constraints do the rest; the campaign spends its allocation on the strongest available auctions and returns 650%. The target was never the goal. It was a floor you set low enough to keep the system honest.
After 17 August, that stops working. If the target says 400% and the budget is capped, Smart Bidding will now bid up into weaker auctions to hit 400%, spending the same money at lower efficiency. Within a fixed budget, lower efficiency means less revenue, not more.
Your target has been aspirational for as long as your budget cap was doing the real work. On 17 August it becomes the outcome.
Where The Exposure Sits
The accounts most affected are the ones that look healthiest on a dashboard: budget-limited campaigns with a wide gap between target and actual performance. The bigger that gap, the bigger the correction.
- Budget-limited PMax and Shopping campaigns where actual ROAS has been running well above the set target for months.
- Seasonal or capped brand campaigns that hit budget every day and post efficiency numbers nobody has interrogated.
- Accounts inheriting targets from a previous agency or a previous margin structure. A target set against 2024 contribution margin is not a target; it is an artefact.
- Any campaign where the target was set low deliberately to give Smart Bidding room and prevent under-delivery.
Campaigns that aren’t budget constrained are unaffected. In those, tCPA and tROAS already determine both spend and efficiency, so there is nothing to reconcile.
Before 17 August
- Pull every budget-limited campaign and compare set target against actual 30/60/90-day CPA or ROAS.
- Anywhere the gap is material, decide whether the target reflects your current contribution margin, not the number that was defensible when it was set.
- Reset targets to the efficiency you actually need, then treat budget as a volume lever rather than an efficiency one.
- Baseline performance now. Post-17 August you’ll want a clean before-and-after, not an argument about whether something changed.
Google has added in-account notifications and a review tool to surface campaigns that may need target adjustments before or after the rollout. Use it as a shortlist, not a verdict, it flags where targets and outcomes diverge, but it has no view on what your margin can support.
The Reframe Worth Internalising
This change makes the bid target the honest control surface it was always described as. That is a defensible design decision, and the volatility argument is real: bouncing between budget-constrained efficiency and target-driven efficiency every time someone adjusts a daily budget is genuinely difficult to manage against.
But it also means the safety net comes out. Budget caps have been absorbing the cost of badly-set targets across a very large number of accounts. From 17 August, a target that doesn’t match your margin will show up directly in performance rather than being quietly suppressed by a spend ceiling.
Useful
Removing the readjustment period after budget changes is a real operational gain. Budget becomes a volume decision, not a volatility event.
Caution
Any budget-limited campaign beating its target should expect efficiency to fall toward that target. Audit before the date, not after the first bad week.
Honest
More predictable is not the same as more profitable. Predictability here means your stated target becomes your realised result, good only if the target was right.
The Bottom Line
After 17 August, Smart Bidding targets rather than budget constraints will determine campaign efficiency. If you run tCPA or tROAS on budget-limited campaigns, the work is straightforward and needs doing in the next week: reconcile every target against current margin, reset the wrong ones, and record where you were before the rollout.
Nobody gets to argue after the fact that the target was only ever indicative.
Need a fresh perspective? Let’s talk.
At 360 OM, we specialise in helping businesses take their marketing efforts to the next level. Our team stays on top of industry trends, uses data-informed decisions to maximise your ROI, and provides full transparency through comprehensive reports.
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