A month ago, your best-performing Search campaign was quietly delivering a $5 CPA against a $10 target. Today, that same campaign is drifting toward $10, and nothing in your settings changed. If your pipeline forecast assumed the old efficiency would hold, you have a model problem.
On August 17, 2026, Google rolled out a change to how target-based bid strategies behave on budget-limited campaigns. Google's documentation describes the mechanic plainly: campaigns using Target CPA, Target ROAS, or Target CPC (Demand Gen) will now "more consistently perform toward your bid target, including when you make budget adjustments." The practical consequence is that campaigns which had been beating their stated targets for months or years are now being pulled back toward the number the advertiser actually typed in.
Google's own worked example makes the math concrete. A campaign with a $10 Target CPA that has been delivering at $5 will start delivering closer to $10. The spend doesn't change. What it buys does.
The Efficiency Buffer Was Never a Feature
For years, budget-constrained campaigns carried an implicit efficiency bonus. When a daily budget capped how much Smart Bidding could spend, the system cherry-picked only the cheapest, highest-probability conversions within that cap. The result was actual performance that often ran well above the stated target. A $10 Target CPA delivered $5. A 400% Target ROAS delivered 800%. Most advertisers filed this under "good campaign health" and moved on.
That gap was not a reward for good targeting. It was a system artifact. PPC Hero's analysis describes the historical flaw clearly: Smart Bidding wasn't just capping spend on budget-limited campaigns, it was aggressively restricting its bidding behavior to capture only the absolute cheapest conversions available. The target field functioned as a soft suggestion, not a binding constraint.
Google's stated rationale for the change is predictability. The FAQ explains that the old behavior "can be confusing and create unpredictable results when budgets are adjusted." Anyone who has ever raised a budget by 30% and watched CPA spike 40% knows exactly what Google is describing. The algorithm would suddenly re-enter broader auction pools it had been avoiding, and performance would destabilize.
The August 17 update decouples the budget lever from the efficiency lever. Your target now controls efficiency. Your budget controls spend. The two jobs stop blurring into each other.
Who Feels This First
The campaigns most exposed are not the ones you actively manage. They are the quiet performers you stopped touching. One pre-deadline audit guide put it directly: the widest gaps almost always sit on long-running Search and Shopping campaigns whose Target CPA or ROAS was set at launch and never revisited. The account got more efficient over the years, but the target stayed frozen at its original, more conservative number.
PPC Hero's September 10 post-mortem confirms the pattern: "If you run SMB accounts, pay attention here. Small budgets mean 'Limited by budget' is a permanent state for half your campaigns, and stale targets are everywhere. These are the accounts where the shift shows up first."
The change covers Search, Shopping, Performance Max, Demand Gen, and Travel campaigns. Display and Hotel campaigns were already operating under the new behavior. App campaigns and video reach/view campaigns are excluded. Google Ads Liaison Ginny Marvin confirmed that the update only impacts budget-constrained campaigns using a target because this is already the bidding behavior when campaigns using a target are not budget-constrained.
The Forecast Implication
Here is where this becomes a CFO conversation, not just a media buyer conversation.
If your pipeline model assumed paid search would continue delivering leads at the efficiency it achieved over the past 12 months, and that efficiency was partly a function of the old bidding behavior, your cost-per-lead assumption is now wrong. The gap between your stated target and your actual performance was baked into your forecast as if it were a permanent feature of the channel. It was not.
The math is straightforward. Pull the 90 days before August 17 for every budget-limited campaign using Target CPA or Target ROAS. Compare the stated target to the actual delivered performance. Any campaign where actual CPA was materially below target, or actual ROAS was materially above target, is a campaign whose efficiency is now compressing toward the number in the settings.
String Global's checklist illustrates the shift: "A campaign sets Target CPA at $10, the budget is limited, and the system used to bid selectively on cheaper traffic, so the actual CPA recently ran around $5. After August 17, the system bids more consistently toward the $10 target, and the actual CPA drifts from $5 toward $10."
If your target was $10 and you were delivering $5, your effective CAC payback just doubled unless you reset the target to $5.
What to Do Now
Google shipped a Bid Target Adjustment Tool on July 6, six weeks before the enforcement date. The tool surfaces historical campaign performance and lets you review and update targets. If you did not use it before August 17, the window to prepare has closed, but the window to respond is still open.
First, audit every budget-limited campaign. Filter for "Limited by budget" status, then compare actual CPA or ROAS against the stated target. Look at the 30 to 90 days before August 17 and the period since. Any campaign that was performing meaningfully better than its target is the one to check first.
Second, set targets you mean. Google gives you three options per campaign: keep the target, align it to recent performance, or raise budget to scale at the stated target. If you want to get back to the efficiency you had before the change, align the target to your pre-change actuals. If your target came from real unit economics (your breakeven CPA and a deliberate margin), keep it and accept the volume shift.
Third, adjust gradually. PPC Hero notes that a target change bigger than 20% triggers a fresh learning period. The last thing a campaign that has just been recalibrated needs is another recalibration shock.
Fourth, update your forecast. If your Q4 pipeline model assumed paid search would deliver leads at the efficiency it achieved in Q2, you need to re-run the numbers with the new efficiency baseline. This is not a media optimization conversation. It is a finance conversation.
The Silver Lining
There is an upside to this change, and it matters for anyone who has ever tried to scale a winning campaign.
PPC Hero's August 18 analysis frames it directly: "Google is uncoupling the budget lever from the efficiency lever." Before August 17, raising a budget on a budget-limited campaign often destabilized performance because the algorithm suddenly had to re-enter auction pools it had been avoiding. After August 17, the target holds steady through budget changes, so scaling becomes more linear.
If you have been afraid to raise budgets on your best campaigns because performance always got worse when you did, this change is aimed squarely at that problem. The cost is that the free efficiency goes away. The benefit is that scaling becomes predictable.
For B2B marketers running long sales cycles and tight budgets, that trade-off is worth understanding. The old behavior rewarded leaving campaigns alone. The new behavior rewards setting targets that reflect your actual unit economics and then scaling with confidence.
The campaigns that will struggle are the ones where the target was set once, years ago, and never revisited. The campaigns that will thrive are the ones where the target is a real number, derived from margin and payback, and updated when the business changes.
Model or it didn't happen. If your forecast assumed the old efficiency would hold, now is the time to re-run the math.
