Noticed that your campaign revenue is decreasing across your Google Ads account, or your account ROAS is falling? August’s updates to the Google Ads Bidding system could be why.
What Has Changed in Google Ads Bidding in 2026?
In August 2026, Google updated the algorithm behind its bidding strategies for Target ROAS, Target Cost Per Acquisition, and Target Cost Per Click. The update applies to campaigns marked “Limited by budget” in Google Ads, which means their daily budget is too low to capture all the traffic and sales available to them.
This update meant that Google’s algorithm would obey your targets more closely. On paper this sounds great, but in reality it can lead to changes in campaign efficiency, costs, and conversion value, particularly when your targets have not been reviewed.
The update was announced in June 2026 but didn’t begin rolling out until the 17th of August and was later finalised by the 27th of August 2026. The changes are not to be ignored and need to be closely monitored if you want to keep your Google Ads performance on the right track.
In between, Google emailed affected advertisers (on 2 July) and released a Bid Target Adjustment Tool (on 6 July) so that targets could be reviewed before the rollout began.
As an ecommerce agency UK brands trust and a Google Partner, we run Google Ads for ecommerce brands every day, so this update is something we’ve been keen to watch closely.
Which Google Campaign Types Are Affected?
The primary campaigns that this update affects are campaigns that use Target ROAS (TROAS), Target CPA (TCPA), or Target Cost Per Click (TCPC) and are limited by budget. In contrast, campaigns using Maximise Conversions without a Target CPA, Maximise Conversion Value without a Target ROAS, or Manual CPC bidding are not directly affected by this update.
The change covers Search, Shopping, Performance Max, Demand Gen and Travel campaigns. Target CPC is only affected within Demand Gen, whilst Manual CPC and Target Impression Share campaigns are untouched.
How Does the New Target ROAS and Target CPA Work?
The key takeaway from this update is that Google has not replaced the Target ROAS, Target CPA, or Target CPC campaign types, but rather changed the way they behave.
The new changes mean that Google’s system sticks closer to the targets you put in place, which is particularly relevant for campaigns that are limited by budget.
Previously, campaigns marked with a Target status would often outperform their goals, ignoring the fact that an outperforming campaign might not be what you were looking for, or manipulating where an ad was displayed to make its performance seem good within the target, but not really delivering the results you wanted. This update has amended Google’s system so that campaigns more consistently optimise for the target. Because the budget acted as a hard ceiling, Google’s bidding system could find conversions well below your target and keep the gap as extra efficiency.
For example, you could have a Performance Max (PMax) campaign limited by budget and set to a 500% ROAS target, but Google could choose for the campaign to far exceed this target and deliver an 800% ROAS. Going forward, the performance will trend closer to the 500% in this example, rather than continuing to over-achieve. The aim from Google was to make the campaigns more predictable against the targets set, particularly on budget-constrained campaigns. The update is not exclusive to Performance Max. It also applies to eligible Search, Shopping, Demand Gen and Travel campaigns using the affected target-based bidding strategies.
It’s a similar story with Target CPA, though this bidding strategy works by aiming for a specific cost per acquisition. For example, you may set a Target CPA of £25. Google then uses signals to get purchases at an average cost per conversion around that £25 figure. This goal makes most sense when brands need to acquire purchases at a sustainable, average cost. Under the new behaviour, a budget-limited campaign that has been delivering purchases at £15 can be expected to drift up towards £25.
Target ROAS is usually the strategy of choice within ecommerce brands as it’s more suited to varied basket values and assumes different customers will purchase different products.
How Do Bidding Changes Affect Google Campaigns?
Google’s PMax campaigns use either “Maximise Conversions” or “Maximise Conversion Value” bidding structures, with the option to set a Target CPA or Target ROAS. Without these targets, campaigns have more flexibility to chase conversions within their budgets, although ROAS may change.
How Does the Update Affect Demand Gen Campaigns?
Updates to Target CPC specifically affect Demand Gen campaigns that are limited by budget. Target CPC allows you to set a desired, average cost-per-click within a Demand Gen campaign (although individual clicks may cost more or less than this target). Restrictions are important on this campaign type as they tend to drive a high number of clicks, increasing costs and impacting your budgets. Target CPC is a Demand Gen-only target, so Search and Shopping campaigns using Manual CPC are not affected.
How Do the Google Ads Updates Affect Ecommerce Brands?
So, did Google Ads get more complicated for ecommerce brands? Perhaps. Though once you’ve got your head around athe changes, they’re not as scary as they may seem.
The impact of these changes depends largely on the bidding strategy that you’re using within your campaigns. But if you’re typically used to your campaigns exceeding targets, even when they are limited by budget, then this is likely a positive change. For example, if you’re used to a campaign driving a CPC of £0.60, but your Target is £1, you may see costs on those campaigns increase in line with the bidding changes; the upside is more predictability.
What Should Ecommerce Advertisers Do Now?
Audit Campaigns Marked Limited by budget
Campaigns marked ‘Limited by budget’ that simultaneously use Target ROAS, Target CPA or the Demand Gen Target CPC strategy should be prioritised, as these are the campaigns most affected by the update.
Review Your Targets Against Recent Performance
You will want to review a reasonable timeframe of data, and adjust your Target ROAS, Target CPC and Target CPA where necessary.
Adjust Your Target or Increase Your Budget
The main impact of this change is behavioural for your ecommerce agency or in-house team - these bidding targets will need to be checked more regularly and adjusted in-line with performance. Google’s system will guide you initially, but from there onwards, we would advise checking these targets often to avoid missing out on potential revenue, essential in peak times such as Black Friday.
In practice, you have a few levers. Adjusting the target (lowering a Target CPA or raising a Target ROAS) keeps efficiency closer to where it was, though it may limit volume. Increasing the budget gives a campaign more room to capture conversions while it works towards the target, which Google says should now be more predictable.
Frequently Asked Questions About Target ROAS, Target CPC and Target CPA
Will the Google Ads Update Affect All Campaigns?
No, it mainly affects campaigns limited by budget and using TROAS, TCPC and TCPA. Campaigns that are not limited by budget, or that use Manual CPC or Maximise Conversions / Maximise Conversion Value without a target, are not directly affected.
Should I Change my Target ROAS After This Google Update?
Review your current performance against your targets and adjust them according to your goals. Allow learning time before evaluating the impact of your changes.
Will Increasing my Budget Affect my ROAS?
Increasing your budget may allow your campaign to capture additional conversions and revenue while continuing to optimise towards your Target ROAS. However, additional spend and revenue are not guaranteed, and actual ROAS may still fluctuate.
What do the Google Updates Mean For Your Brand? Conclusion
Want to learn how we're backing our client base to get the most out of their Google Ads since this Update was implemented?Contact our ecommerce agency team and let's talk.
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