Changes to Target-Based Smart Bidding: What Every Google Ads Advertisers Needs to Know

Google is introducing a significant Smart Bidding update that will directly affect how Target CPA bidding, Target ROAS bidding, and overall campaign optimisation works for Google Ads advertisers.

From 17 August 2026, campaigns using Target CPA (tCPA) and Target ROAS (tROAS) will begin optimising much more closely towards the bid targets advertisers have set. While this Smart Bidding update may appear subtle, it can significantly influence performance stability, especially for Google Ads advertisers managing scaled or budget-limited accounts.

Why is Google making this Smart Bidding update?

One of the biggest concerns for Google Ads advertisers has been the unpredictability of scaling under Target CPA bidding and Target ROAS bidding strategies.

Many campaigns using Target CPA bidding consistently outperform their goals. For example, a £20 CPA target might deliver £12, while a Target ROAS bidding campaign aiming for 500% may reach 700% or more.

While this overperformance benefits Google Ads advertisers, it often creates instability when budgets increase. This is why the new Smart Bidding update aims to ensure more predictable alignment with targets.

For a deeper look at how automation is reshaping modern advertising platforms, read our article on OpenAI Expands ChatGPT Ads with Self-Serve Buying and CPC Bidding

What is changing in Target CPA bidding and Target ROAS bidding?

Before the Smart Bidding update, Target CPA bidding and Target ROAS bidding could exceed set targets when campaigns were budget-constrained.

After the update, Google will gradually ensure performance aligns more closely with defined targets. This means:

• A Target CPA bidding campaign at £20 CPA delivering £12 may move closer to £20

• A Target ROAS bidding campaign targeting 400% may stabilise closer to that figure

For Google Ads advertisers, this does not mean weaker performance - it means more controlled delivery under the Smart Bidding update.

Which campaigns are impacted by the Smart Bidding update?

The Smart Bidding update applies to most campaigns using automated bidding strategies, especially those relevant to Google Ads advertisers relying on:

• Target CPA bidding

• Target ROAS bidding

• Target CPC (Demand Gen only)

Affected campaign types include:

• Search

• Standard Shopping

• Performance Max

• Demand Gen

• Display

• Travel campaigns

App and most Video campaigns are not impacted, making this Smart Bidding update highly relevant for performance-focused Google Ads advertisers.

For advertisers working with product feeds, optimisation is essential for getting the best results from Google Shopping Ads

What does this mean for Google Ads advertisers?

The Smart Bidding update introduces more predictable scaling, but Google Ads advertisers who rely heavily on Target CPA bidding or Target ROAS bidding may notice performance adjustments.

If your campaigns have been:

• Consistently outperforming CPA targets

• Achieving higher ROAS than expected

• Limited by budget constraints

Then the Smart Bidding update may gradually reduce this overperformance.

For example, a Target ROAS bidding campaign achieving 750% on a 500% target may move closer to the set benchmark. Similarly, Target CPA bidding efficiency may align more closely with the defined CPA.

Google’s Bid Target Adjustment Tool

To support Google Ads advertisers, Google is introducing a Bid Target Adjustment Tool from 6 July 2026.

This tool helps with the Smart Bidding update by:

• Identifying affected Target CPA bidding campaigns

• Highlighting Target ROAS bidding risks

• Suggesting revised bid targets

• Helping maintain stability for Google Ads advertisers

What should Google Ads advertisers do now?

Rather than waiting for the Smart Bidding update, Google Ads advertisers should proactively review their Target CPA bidding and Target ROAS bidding strategies.

Focus on:

• Campaigns consistently limited by budget

• Campaigns outperforming CPA or ROAS targets

• High-value performance campaigns

Adjusting targets early can help reduce disruption caused by the Smart Bidding update and ensure smoother transitions for Google Ads advertisers.

External industry context

Automation trends across advertising platforms are accelerating. The Smart Bidding update reflects a broader shift towards tighter control and predictable outcomes for Google Ads advertisers using Target CPA bidding and Target ROAS bidding.

Final Thoughts by ShoppingIQ

The upcoming Smart Bidding update is not a complete overhaul but a refinement of how Target CPA bidding and Target ROAS bidding behave within Google Ads.

For Google Ads advertisers, this means improved predictability but reduced flexibility in overperforming campaigns. The key takeaway is clear: reviewing strategies early is essential.

As the Smart Bidding update approaches, proactive optimisation will help Google Ads advertisers maintain stable performance and avoid unexpected shifts in campaign efficiency.