Google Is Ending Target Overperformance – What to Fix Before August 17 via @sejournal, @brookeosmundson

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Advertising On SEJ Case Study: B2B SaaS Banner Ads Webinar Google Local Services Ads Are Moving To PMax: What To Check First Prepare for Google's LSA move into Performance Max with a before-and-after audit checklist from CallRail. 🔥[Live 8/12 with Loren Baker] Ecommerce SEO: Own your "brand +promo code" search. Budget-limited Target CPA and Target ROAS campaigns stop overdelivering on August 17, so audit your target gaps now to avoid paying more for the same. SEJ STAFF Brooke Osmundson 8 minutes ago ⋅ 9 min read SEJ STAFF Brooke Osmundson Director of Growth Marketing at Smith Micro Software Bio Follow Google’s upcoming Smart Bidding change has sparked plenty of discussion across the PPC industry, but its impact may be more limited than some of the online reaction suggests. Beginning August 17, budget-limited campaigns using Target CPA or Target ROAS will optimize more closely toward their stated bidding target. Google also introduced a Bid Target Adjustment Tool on July 6, giving advertisers time to review affected campaigns before the change takes effect. The update applies only to budget-limited campaigns using target-based bidding strategies across Search, Shopping, Performance Max, Demand Gen, Travel, Search Ads 360, and Demand Gen campaigns in Display & Video 360. Campaigns that aren’t limited by budget won’t behave differently, and App, Video Reach, and Video View campaigns are excluded. Hotel and Display campaigns already optimize this way. The discussion around the update has largely focused on advertisers who have benefited from campaigns consistently outperforming their stated Target CPA or Target ROAS. For some accounts, that gap wasn’t an accident. It was an intentional way to maintain efficient performance inside a fixed budget. To understand which campaigns deserve attention before August 17, it’s worth starting with why Google made the change in the first place. Before this update, increasing the daily budget on a budget-limited campaign using Target CPA or Target ROAS could produce inconsistent results. Some campaigns maintained similar efficiency, while others experienced noticeable fluctuations as Smart Bidding adjusted to the additional budget. That made it more difficult to predict how performance would change after increasing budget. Beginning August 17, Google wants budget-limited campaigns to optimize toward the target advertisers entered, regardless of whether additional budget becomes available. A campaign with a $10 Target CPA should continue optimizing toward that $10 target instead of shifting behavior because its budget changed. Google illustrates the change with a simple example in its documentation: If your campaign’s Target CPA is $10, but your recent actual CPA performance is $5, your campaign will deliver more closely to a $10 actual CPA starting August 17, 2026. Update your target to $5 to maintain your recent performance or to a target CPA of your choosing based on your business goals. That recommendation is the foundation for the entire update. Google isn’t changing advertisers’ targets automatically. It’s expecting advertisers to update those targets if recent performance better reflects the outcome they want to maintain. Google’s documentation explains what changes on August 17. The discussion among PPC practitioners centered on something different: many advertisers had built successful account strategies around the existing behavior. Joey Bidner captured that perspective in one of the strongest reactions to the announcement. He wrote that several of his best-performing accounts “INTENTIONALLY run with low tROAS or high tCPA targets,” arguing that the additional flexibility allowed Smart Bidding to continue finding efficient traffic. From his perspective, the update changes an approach that many advertisers had deliberately adopted rather than accidentally benefited from. Nils Rooijmans focused less on Google’s motivation and more on the practical outcome. He warned that advertisers with campaigns consistently outperforming their targets could see “decreasing efficiency of spend” after August 17 if they leave those targets unchanged. His recommendation was to compare recent actual CPA or ROAS against the bidding target, then decide whether the current target still reflects the business objective. He also noted that bid strategy targets and business targets are not always the same number. Kirk Williams acknowledged that Google’s new approach may be how budget-limited bidding was originally intended to work. At the same time, he pointed out that agencies and advertisers have spent years learning how Smart Bidding behaved in the real world. Rather than recommending broad account changes, his team is auditing each campaign individually by looking at the gap between assigned targets and actual performance before deciding whether any adjustments are necessary. Jyll Saskin Gales reached a different conclusion. In her podcast, she argued that Target CPA and Target ROAS should do exactly what their names imply. If advertisers want a $5 CPA, they should tell Google they want a $5 CPA. If your target is $10 and it’s been achieving $5, then change your target to $5. What’s the big issue here? Reading through these reactions, I don’t think the disagreement is really about Google’s documentation. The disagreement is centered around what a bidding target actually represents. Google treats Target CPA and Target ROAS as the performance advertisers want Smart Bidding to achieve. Many advertisers have used those same targets as one of several controls that influence how a budget-limited campaign behaves over time. If a campaign consistently delivered leads below its Target CPA or exceeded its Target ROAS, and the business was happy with the results, there was often little reason to revisit the setting. Those are two different ways of using the same bidding strategy. That’s why this update generated so much discussion, and it sets up the larger question behind August 17: should a Target CPA or Target ROAS always represent the exact performance advertisers want to achieve, or can it also function as a control inside a budget-limited campaign? Google’s documentation treats Target CPA and Target ROAS as direct instructions. If the target is $50, Smart Bidding should optimize toward a $50 CPA. If the target is 500%, Smart Bidding should pursue a 500% return. That seems like a logical way to design the product. But, many advertisers ended up using those targets a little differently. Imagine a Search campaign with a $50 Target CPA that has consistently generated leads at $35 for the past year. The campaign spends its full budget every month, lead quality is strong, and the business has no interest in increasing spend. Most PPC managers wouldn’t look at that account and immediately think the bidding target needs to change. They’d probably think the campaign is performing exactly as they want it to. That’s how many advertisers arrived at the current debate.

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Source: Search Engine Journal

This article has been carefully curated and reformatted for educational and informational purposes. Full credit goes to the original publisher.

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