Navigating Google's Target-Based Bid Strategy Changes

With the upcoming target CPA changes and target ROAS updates altering how Google’s target-based bid strategy operates on budget-constrained campaigns, performance is expected to be unpredictable unless targets are realigned with actuals. So what does this mean for paid search marketers?

Starting August 17, 2026, budget-constrained campaigns using target-based bid strategies (Search, Shopping, PMAX, and Demand Gen) will optimize strictly to hit their assigned target goals.

Google’s reasoning for this change is to achieve scalable consistency and better control the performance expectations between budget increases and bidding behavior. Currently, when budget-constrained campaigns are overperforming and their budgets are increased for scaling needs, this adjustment to capture more volume causes the bidding to be volatile, leading to unpredictable results and sudden decreases in overall efficiencies. The change to the target-based bid strategy will now optimize consistently to the set target regardless of the campaign's budget, preventing any performance fluctuation and treating the target as the goal as opposed to a max cap ceiling.

What Should Paid Search Marketers Do?

Firstly, don’t panic. Mastering this updated bidding behavior creates a structural advantage for your accounts, and recalibrating your targets today secures a stable performance baseline ahead of the rollout. This proactive approach prevents unexpected efficiency drops and keeps your budget scaling smoothly while the algorithm adjusts. When speaking with stakeholders, I would position this change to address scalability and ensure consistency.

If you do have any campaigns with a limited budget and are using a target-based bid strategy, I recommend reviewing the campaigns’ performance and then changing their set target to reflect their last 30 days' actuals.

If actual performance is outperforming your target (ie lower CPA/higher ROAS), lock in your current efficiencies as the new baseline target goal. If budgets were to be increased (within reason and business needs), you should be able to find some comfort in knowing the bid strategy will optimize towards maintaining the same or similar results.

If actual performance is on par with your target, leave the target as it is.

If actual performance is underperforming against your target (ie higher CPA/lower ROAS), this change may potentially throttle your delivery to meet the set target—impacting reach, spend and overall conversion volume and value. It’s best to reset and realign the current target to an achievable one based on your recent trends and increase optimizations to improve the performance.

You can also leverage Google Ads’ bid target adjustment tool to cross-reference your findings and assess whether the recommendations in-platform are aligned and applicable. To avoid making any last-minute changes before the deadline, complete your review and establish the new baseline goals as soon as possible. Ideally, this should be completed about 5 days before August 17 to provide sufficient time to factor in the new goals, compare the before/after impact, and communicate to manage any internal and external expectations.

For campaigns that are not using tCPA or tROAS bid strategies, or that are not limited by budget, no action is required.

So, What’s Next?

If no changes are made before August 17, any performance efficiency gained will eventually be lost as your actuals start to creep towards the existing target goal once the change comes into effect.

For paid search marketers that are still wary of this change and/or operate on a fixed budget allocation that can’t be increased, as an alternative solution, using the non-target bid strategies of maximize conversions or maximize conversion value instead is an option, however, you will be relinquishing the outcome control that comes with the target-based bid strategies. Please note that this change will also affect any paid search marketers using Search Ads 360’s auction-time bid strategies.

Lastly, this is a reminder that bid strategies are not a set-and-forget activation. It’s important to regularly review your performance, apply the required optimizations, always test, and update the configurations when necessary, in accordance with your business needs and seasonal changes.

This platform update underscores Google’s push toward flexible, demand-led budgets. These fluid allocations capture real-time search queries and demand spikes while maintaining results, positioning the target-based bid strategy as a primary optimization lever.

If you have further questions, feel free to reach out to Jimmy Le for any search-related inquiries.