Google Ads reviews targeting-based bidding for budget-constrained campaigns

Google is changing the way its bid strategies behave when campaigns are constrained by budget, with the aim of aligning performance with advertisers’ targets as budgets change.

The update will go live on August 17th, with a new Bid Target Adjustment tool available on July 6th.

What’s going on. Google says that campaigns that use targeting-based bidding strategies, such as Target CPA, will more closely match their goals if there are budget constraints.

The company is also introducing a Bid Target Adjustment Tool that will allow advertisers to review and adjust targets before changes take effect.

Why do we care. Campaigns that have been exceeding their target CPA or ROAS goals may no longer be able to continue to do so automatically after an update. Google’s changes are designed to make budget-delayed campaigns more in line with their stated goals, which can change performance and effectiveness if targets haven’t been updated recently.

For example, a campaign using a Target CPA of $10 that currently achieves a $5 CPA may see performance approach the $10 target unless the advertiser updates the target setting.

The new Bid Target Adjustment tool gives advertisers the opportunity to review bid goals before the August release. For some advertisers, failure to adjust targeting can mean paying more per conversion or seeing a shift in performance toward Google targets than historical campaign results.

Why Google is making the change. According to Google, this update is intended to reduce volatility and create predictable performance when advertisers increase, decrease or adjust campaign budgets.

The company says the new tool will help advertisers align bidding targets more closely with actual business goals before enforcement begins.

What advertisers should do. Google encourages advertisers to review campaigns using targeting-based bidding strategies and check whether existing targets are still showing the desired results.

Advertisers will receive notifications in their Google Ads accounts prior to the rollout and can use the Bid Adjustment Tool to identify campaigns that may be affected.

Between the lines. The update could have important implications for marketers whose campaigns consistently miss their targets. In some cases, maintaining current performance levels may require lowering target settings rather than leaving them unchanged.

Bottom line: Google is strengthening the relationship between target-based bidding targets and actual campaign performance, making it more important for advertisers to regularly review and revise bidding targets as business conditions change.