Google’s Big Bidding Shift: The Importance of Smart Bidding Targets

As a summary:

Google are making changes to the way their back-end optimisation algorithms work, meaning marketers need to change tact on how they set budgets and ROAS/CPA targets. The aim is to make campaign performance more predictable, which should be a positive move. Changes centre around how the algorithms interact with ROAS targets, meaning even if your campaign is limited by budget, it’ll still aim to achieve your set ROAS target, instead of overachieving vs target which is what would previously happen. 

Introduction

At Summit, we know that navigating the complex, ever-evolving landscape of PPC requires total transparency and a willingness to adapt. Google has recently dropped a major update to its automated bidding systems that’ll fundamentally change how we manage client accounts, push spend, and structure our optimisations.  

Starting 17th August 2026, Google is restructuring its bidding framework. The goal is to make performance more consistent and predictable, based on the exact targets we set, even when making sudden budget adjustments. While “consistent and predictable” sounds like a dream, the reality is that this update will completely rewrite the rules for campaigns that are currently “limited by budget”.  

The Paid Search team is here to explain exactly what’s changing, how it impacts your day-to-day management, and how we as agencies need to adapt to keep our retail and lead-gen clients ahead of the curve.  

The Shift: Current vs. New Bidding Behaviour

To understand why this is so important, we have to look at how Google’s algorithms handle budget constraints today versus how they’ll operate post-change.  

• How it currently operates: If a campaign is flagged as limited by budget, it can frequently overachieve against the target we set. Because the algorithm is trying to squeeze the highest possible efficiency out of a restricted budget, it often delivers an actual CPA or ROAS that’s significantly better than the formal target entered in the settings.  

• How it will operate after the changes: If a campaign is limited by budget, the system will no longer overachieve. Instead, it’ll intentionally align performance as closely as possible to the exact target you have entered.  

An Example in Practice: If your campaign’s Target CPA (tCPA) is set to £10, but because it’s budget-constrained it has recently been overachieving and delivering an actual CPA of £5, this’ll stop on 17th August 2026. Starting then, the campaign will adjust its bidding strategy to deliver closer to a £10 actual CPA. To maintain that efficient $5 performance, you’ll have to manually update your target to £5 or a specific target based on your business goals.  

What This Means for Paid Media Teams

This update changes the mechanics of account optimisation. Here are the core impacts our strategy teams need to prepare for: 

1. Traffic Shifts in Multi-Channel Campaigns (PMax& Demand Gen)

For multi-channel campaigns like Performance Max and Demand Gen, this change could spark significant shifts in how budget is distributed across networks. If a campaign begins adjusting to a more lenient, higher target to match your settings, the algorithm is highly likely to funnel more budget into Display and Video formats over highly intent-driven channels like Shopping or Search.  

2. The Era of “Manipulating” Campaigns Daily is Over

Historically, many specialists have adjusted tROAS or CPA targets as a fast lever to push or pull daily spend. We can no longer rely on target changes to artificially manipulate spend volume. Because the system will now rely heavily on these targets for true optimisation consistency, we must avoid regularly changing them. Moving forward, budget caps will be the primary lever to control spend volume.  

3. Real Targets for Real Outcomes

We need to set targets at what we actually want to achieve, rather than setting artificial boundaries. Because the system will optimise more strictly toward the entered target, any campaigns currently performing more efficiently than their set targets will see performance actively trend downward toward that set target.  

4. Embracing Alternate Optimisation Levers

Instead of tweaking targets to game the system, account managers need to hold their nerve and let the algorithms do their job. Focus must shift to foundational optimisation techniques: managing macro budget allocations, improving Quality Scores, and using Promotion Mode (currently in Beta) when a client needs to temporarily spike volume.  

How Agencies Should Adapt: Action Plan

We need to be proactive to prevent any performance drops for our retail and lead-gen clients when the change hits. Here is our recommended action plan:  

• Audit “At Risk” Campaigns: Immediately identify campaigns that are regularly limited by budget and consistently overachieving against their set targets. These are your highest-risk areas where efficiency could drop if left unmanaged.  

• Review and Align Targets: Review all budget-limited campaigns and adjust the targets to match either what they’re currently achieving or the exact ROAS the client requires.  

• Prioritise Data Quality: Trusting the algorithm means feeding it perfect data. Ensure that Enhanced Conversions are fully implemented, Google Tag Gateway is operating correctly, and Cookie Consent Mode is functioning as expected. Gathering and feeding first-party data back to Google will be vital to ensuring the bidding system optimises accurately.  

• Educate Clients and Internal Teams: We need to have transparent conversations with our clients to align expectations around these structural changes. Internally, we’ll be running an optimisation best practice session for our account teams to review our reliance on targets and re-train on budget-led scaling.  

Summary

Google’s upcoming bidding system update makes one thing clear: transparency in our data and accuracy in our settings are paramount. The days of setting a lazy target and letting a restricted budget force account efficiency are coming to an end.  

By auditing our campaigns now, cleaning up our tracking data, and resetting our targets to reflect reality, we’re confident we can turn this algorithmic shift into a competitive advantage for our clients. 

If you’re worried about the changes, get in touch with our PPC team today and we’d be happy to chat through our recommendations.