Many global advertisers running Google Ads frequently encounter a specific account state: a campaign is flagged as "Limited by budget," yet its actual CPA or ROAS outperforms the set target. For instance, a campaign with a Target CPA (tCPA) of $10 consistently delivers at $5, or a Target ROAS (tROAS) set at 300% actually achieves 500%.
Historically, media buyers interpreted this as the system finding cheaper conversions within a restricted budget. However, this logic must be re-evaluated starting August 17, 2026. Google has confirmed that campaigns limited by budget using target-based bidding strategies (such as Target CPA and Target ROAS) will optimize more consistently toward the advertiser's specified targets. If a campaign has historically outperformed its target but the target remains unadjusted, performance may gradually drift closer to the set target after August 17. Google explicitly stated it will not automatically adjust targets or budgets for advertisers.
For performance marketers, this is a critical test of target management. Here is how to audit and adjust your accounts ahead of the update:
1. Identify Affected Campaigns
Not all campaigns using tCPA or tROAS will be affected. Focus your audit on Search, Shopping, Performance Max (PMax), Demand Gen, and Travel campaigns that have been flagged as "Limited by budget" at any point over the past 12 months, and whose actual performance has significantly outperformed their set targets.
2. Align Targets with Real Performance and Margins
You can no longer set loose targets just to satisfy internal reporting or conservative estimates. Previously, if your Target CPA was set much higher than actual acquisition costs, the system could still naturally suppress costs under a budget constraint. Post-update, that loose target will become the actual performance level the system optimizes toward. You must recalibrate your Target CPA and Target ROAS to closely reflect recent actual performance and true profit margins.
3. Avoid Blindly Switching to Maximize Conversions
Google suggests that switching to "Maximize Conversions" or "Maximize Conversion Value" can help capture more volume within a fixed budget. However, without target constraints, your actual CPA or ROAS will fluctuate alongside budget changes. For margin-sensitive e-commerce and lead generation accounts, do not sacrifice efficiency baselines simply to maintain volume.
4. Monitor Channel Shifts in PMax and Demand Gen
Google has warned that multi-channel campaigns may experience shifts in budget allocation. Performance Max, for example, historically allocated budget to channels where it could find highly efficient conversions. Once the new bidding logic is enforced, the spending distribution among Search, Shopping, YouTube, and Discover may shift significantly.
5. Account for Conversion Lag During Evaluation
Google recommends waiting one to two conversion cycles after making adjustments before evaluating performance. For lead generation businesses with longer sales cycles, analyzing CPA based only on the first few days of data can lead to premature and inaccurate optimizations.
Conclusion: Targets Are Constraints, Not Suggestions
This update serves as a crucial reminder for the automation era: smart bidding targets are not mere suggestions for the algorithm—they are strict constraints for budget execution and bidding. The "accidental outperformance" caused by budget limitations will soon disappear. If your targets are set incorrectly, the system will simply execute those incorrect targets more consistently.