BIG GOOGLE ADS UPDATE: HERE'S WHAT'S CHANGING STARTING AUGUST 17

Google announced a major update this week to the bidding system within Google Ads. Starting August 17, the way campaigns with the “Budget-limited” status handle smart bidding strategies (such as Target CPA and Target ROAS*) will change.

This is crucial news for SMEs. Do you work with a fixed or limited marketing budget? If so, you’re probably familiar with the message “Limited by budget.” It is precisely for these types of accounts that the bidding system will soon operate in a fundamentally different way.

The key point of the update? From now on, Google will consistently optimize toward the CPA or ROAS goals you’ve set yourself. This happens as soon as a campaign is constrained by its budget—or when you add extra budget. That sounds logical, but if your campaigns are currently performing more efficiently than your set targets, this could have a negative impact on your ads starting in mid-August.

WHAT EXACTLY IS CHANGING?

Currently, campaigns that are budget-constrained often experience fluctuations in performance. Sometimes a campaign even performs much better (i.e., more efficiently) than the target you’ve set. Starting August 17, this will change. Google will harmonize bidding behavior. From that point on, campaigns that are budget-constrained will work much more closely toward the bid target you’ve set.

Example: Suppose you have a Search or Performance Max campaign with a Target CPA set at €10, but your recent actual CPA performance has been around €5. Starting August 17, the CPA will be closer to the CPA you specified (in this case, €10). In that case, Google will charge more for the same leads.

Note: Video reach campaigns, app campaigns, and video view campaigns (VVC) will continue to use their previous bidding behavior.

WHAT'S THE BEST THING TO DO?

Depending on your goals, you may need to take action before the start date:

• Add budget: The advantage of the new system is that Google Ads responds much more predictably to budget increases. In the past, increasing the budget for a “budget-constrained” campaign often caused significant performance fluctuations. After August 17, you can increase your budget with much greater confidence; the campaign will continue to optimize neatly around your set goal but will simply drive more volume.

• Adjust your goal: If you want to maintain your current performance or don’t have the capacity to grow, we recommend adjusting your goals so they accurately reflect what you want Google to achieve.

  • Tip: In the Google Ads dashboard, you’ll now see a notification that links directly to the new Bid Target Adjustment Tool. Here, you can view historical performance and, with a single click (“Apply”), synchronize your targets with reality.

• Changing Strategy: Do you have a strict budget and simply want to get the most out of it, regardless of a set CPA or ROAS? Then consider removing the targets (target CPA/ROAS) entirely and running your campaigns purely on “Maximize Conversions” or “Maximize Conversion Value.” The algorithm will then allocate the entire budget to maximize results, although the daily cost per conversion may continue to fluctuate.

At Websters, we closely follow Google’s fluctuations. Would you like to review your strategy during a no-obligation consultation? Come by for a cup of coffee!

*Glossary

CPA Target (Cost per Acquisition): The average amount you’re willing to pay for a single conversion, such as a purchase, quote request, or sign-up.

ROAS Target (Return on Ad Spend): The desired return on your ad spend. This indicates how much revenue you want to generate for every euro you spend on ads.