Google ads just rolled out a bidding update that could quietly double your acquisition costs, and most advertisers have no idea it is happening.

If you run Google Ads with Target CPA or Target ROAS, you need to open your account today and check something. This change is live from today, 17 August 2026, and if you ignore it, your costs could climb without you touching a single setting.

Let me explain exactly what changed, why it matters, and the four choices you have right now.

What the Google Ads Bidding Update Actually Changes

This update affects Search, Shopping, Performance Max, and Demand Gen campaigns using Target CPA (tCPA) or Target ROAS (tROAS).

Here is the key detail. It only affects campaigns with a “Limited by budget” status. If your campaigns are not budget-limited, nothing changes for you.

To understand why this matters, you need to know how budget-limited campaigns used to behave.

Historically, when a campaign was limited by budget, it often over-performed. You might have set a Target CPA of $10, but because the budget cap forced the algorithm to be hyper-efficient, it actually brought in customers at $5.

You set $10. You quietly got $5. Everybody was happy, and most people never updated that target again.

Starting today, that changes. The algorithm now shifts to hit your exact target, regardless of your budget cap.

So if your target is set to $10, Google will now push your actual costs up toward that $10, even though you were happily getting customers at $5. Same budget. Double the cost per customer.

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Why This Google Ads Bidding Update Matters for Your Profit

Google frames this as a predictability fix, and on its own terms, that is fair. Budget-limited campaigns used to behave unpredictably the moment you raised the budget, and this makes scaling more stable.

But there is a real catch for advertisers who have been coasting on over-performance.

Your targets will not adjust automatically. Google will not change a single number in your account. It will simply start taking the number you already entered more literally.

The problem is that across a huge number of accounts, that number has never been updated. People set a target eighteen months ago, saw good results, and never touched it again. If that is you, your costs are about to drift up to a target you set and forgot.

That is why you have to act, not the platform.

Your Four Choices Right Now

If you have budget-limited campaigns that have been over-performing, you have four options to make today.

Option 1: Do Nothing

If your business goal genuinely is a $10 CPA and you are happy paying it, leave it alone.

Just be prepared for your costs to start trending up toward that $10 mark over the coming weeks. Only choose this if the target you set actually reflects what you can afford to pay.

Option 2: Lock In Your Recent Performance

If you want to keep getting that $5 CPA, you must manually lower your target to $5.

Please read that again, because it feels backwards. You lower the target to protect the performance you already have.

The benefit is real. When you eventually increase your budget, Google will now aim to scale your volume while holding that $5 line, instead of letting costs run loose. Google has even built a Bid Target Adjustment Tool inside your account that shows your recent performance and lets you apply the suggested lower target in one click, so you do not have to guess the number.

Option 3: Set a Custom Target

Find a middle ground based on your actual unit economics.

If $7 is the number that makes sense for your profit margins, manually update your bid target to $7. This is often the smartest option, because it ties your target to what you can genuinely afford rather than to whatever the algorithm was accidentally delivering.

If you are not sure what that number should be, this is exactly the kind of thing I dig into on a paid media consultation call, because the right target comes from your margins, not from Google.

Option 4: Prioritise Pure Volume

If you have a fixed daily budget and simply want as many conversions as possible, without needing to hit a specific efficiency target, switch your strategy entirely.

Move from Target CPA to “Maximize Conversions,” or from Target ROAS to “Maximize Conversion Value.” This tells Google to get you the most results your budget allows, rather than chasing a specific cost target.

Do This Today

This is not a change to file away for later. It is live from today, and the accounts that get hurt are the ones left on autopilot.

Open your Google Ads account right now. Filter for your “Limited by budget” campaigns using Target CPA or Target ROAS. Compare the target you set against what you have actually been paying. Then pick one of the four options above for each campaign.

Do not let the platform quietly eat into your profit margins while you are looking the other way.

Have you checked your campaigns yet? Tell me in the comments which option you are going with.