Google's August 17 Change Ate a 20% ROAS Cushion in Three Weeks
Budget-limited Google Ads campaigns using Target ROAS beat their targets by a median of about 20% before Google's August 17, 2026 bidding change, according to smec data reported by PPC Land. Within three weeks that surplus fell to roughly zero. The budget cap had been quietly propping up loose targets, so the tROAS number is now the only thing steering those campaigns into Q4.
I wrote back in August that Google would stop beating your CPA targets on August 17, on purpose. That piece was mostly a forecast. This is the first decent look at what actually happened, and it's a bit more dramatic than most people (including the people who ran the analysis) said it would be.
The surplus that nobody priced in
Quick refresher on the change itself. Google's help page on target-based bid strategies says budget-limited Target CPA and Target ROAS campaigns now perform more consistently toward the target you set. Google's own example: a $10 Target CPA campaign that had been converting at $5 should now deliver closer to $10. It covers Search, Shopping, Performance Max, Demand Gen and Travel, and Google explicitly says it won't touch your targets or budgets for you.
What smec found is that this "overperformance" was nowhere near a rare edge case. The before picture, measured from June 1:
- 55% of budget-limited campaigns beat their ROAS target, versus about one third of all Smart Bidding campaigns.
- The median budget-limited campaign beat its target by about 20%.
- Non-limited campaigns that overachieved did so by a median of only about 5%.
And then the after picture, as weekly medians of how far campaigns ran above target: roughly 11% in the week of August 17, roughly 6% the week of August 24, and roughly zero by August 31. After that, about half of the budget-limited campaigns sat on target, a quarter above and a quarter below. Mike Ryan, smec's Head of Ecommerce Insights, called those post-change splits "still kind of preliminary," which is fair.
The funny part is the podcast itself. Ryan had told people before the rollout that August 17 was "not a cliff." On the October 20 smec episode, looking at his own charts, he conceded the data showed it was, in fact, a cliff (with an expletive attached). Credit to him for saying it out loud.
One caveat before going further, since I'd rather flag it than bury it: smec didn't disclose sample size, markets, or how it defines "limited by budget" or "on target" for this analysis. PPC Land notes that too. So treat the medians as directionally strong, but probably not as a benchmark you quote to your CFO to two decimal places.
The budget cap was a bid cap in disguise
Think of the old setup like a taxi with a broken meter that always undercharged you. You told the driver "get me there for under $30," the meter kept stopping at $24, and you assumed you were a great negotiator. August 17 fixed the meter.
Mechanically, when a campaign couldn't spend its full budget at the bids Smart Bidding wanted, it seems to have ended up bidding more conservatively than the target strictly required. The result was ROAS above target. Most advertisers read that as "my campaign is crushing it," when really the budget was acting as a hidden efficiency lever. Now Google is willing to bid up toward the target to spend the money, and the efficiency you used to get for free gets converted into volume (or just into higher CPCs).
That CPC part is where it stings. smec says CPCs rose on budget-limited campaigns and fell slightly on non-limited ones. In the one account they walked through, a UK kitchen and homeware retailer, weekly average CPC went from about 17p to about 27p in the week of the change. Ryan put the jump at around 44%; PPC Land points out the rounded numbers actually imply about 59%. Either way, that's a lot of extra money per click for the same budget.
The same retailer's ROAS used to swing all over the place, up to around 35 and often near 20. After the change, it raised its target to about 13, and actual ROAS tracked that target pretty closely. Christian Scharmüller, smec's Chief Client Officer, summed it up on the episode: "Predictable performance. This is predictable performance." Which is what Google promised. Whether predictable at 13 beats spiky at 20 is a question only your margin sheet can answer.
Your target used to be a wish. Now Google treats it as an instruction.
Where advertisers seem to be overcorrecting
What I find more interesting than the cliff itself is the reaction. Scharmüller wrote on LinkedIn that "the market reacted irrationally by being far too aggressive with its new ROAS targets." Translated: lots of advertisers saw efficiency drop, panicked, and jacked their targets way up to drag ROAS back to where it used to be. And then volume disappeared.
There's anecdotal support for that in a r/PPC thread PPC Land covered in early October. The original poster ran Shopping at a 300% tROAS while actually delivering 3,000% to 4,000% (their numbers, unverified), and said sales dropped "significantly" after August 17. One commenter said they'd raised a target to 600% and their best campaign was now at 2.2x. One Reddit thread is not a study. But it rhymes with what smec is describing.
I think part of the problem is that nobody really knew what their "real" target should have been, because the budget cap had been flattering the numbers for years. If you've been reading platform ROAS as gospel, our piece on why every platform says your ROAS is great is worth a look before you reset anything.
Anyway, this isn't entirely new behavior from Google. Smart Bidding has always spent toward whatever you let it. It just used to have a governor on it that most people didn't know was there, and now it doesn't.
A target reset before Black Friday traffic hits
You can do this part this afternoon. It should take about 30 to 45 minutes for an account with a few dozen campaigns.
- Filter for the affected campaigns. Target ROAS or Target CPA, status "Limited by budget." Everything else, according to Google, shouldn't have changed behavior.
- Pull two windows side by side. June 1 to August 16, and September 1 to today. Compare actual ROAS to target in each. If the pre-change gap was 20% or more (the smec median), your old target was mostly decorative.
- Set the target from your margin, not from your memory. Work out break-even ROAS (roughly 1 divided by contribution margin) and set the target at a level that's actually profitable. Don't just paste in what the campaign "used to do." That number included the cushion.
- Move in steps, not leaps. Google PM Tal Akabas said on Google's Ads Decoded podcast that changing a target or budget on an established campaign doesn't trigger a learning period. Even so, Google's own guidance is to judge results after one to two conversion cycles. So step the target, wait a cycle, check volume, step again.
- Watch CPC as the early warning. If weekly average CPC is up more than 30% since mid-August and ROAS is sitting right on target, the campaign is probably buying the same customers at a higher price. That's usually the signal to either raise budget (if marginal ROAS still clears your floor) or accept a slightly lower target to keep volume.
On the tROAS vs tCPA question, which comes up a lot right now: if your order values vary widely, our older guide on how order-value spread decides Target ROAS vs Target CPA still holds up. Some people are also just switching to Maximize Conversion Value without a target. Google warns that ROAS will fluctuate as budgets change if you do that, and honestly that's the trade you're signing up for.
What smec can't tell us yet (and what I'd bet on)
Ryan's own read was that it may be "bitter medicine and maybe needed for the auction health," and on the bigger revenue question: "Only Google knows." He's probably right on both counts. Google gets more spend at stated targets, advertisers get predictability, and the people who lose are the ones who never knew their target was fiction.
My prediction: by the end of Q1 2027, the share of budget-limited campaigns sitting below target (about a quarter in smec's current data) shrinks to under 15%, mostly because the over-aggressive targets set in August and September get walked back after a disappointing Black Friday. If that happens, the August "efficiency crisis" will look a lot more like a target-setting problem in hindsight.
I'm not sure there's a clean villain here. Google changed a rule, but it was a rule most of us were benefiting from without understanding it. The fix is mostly boring: know your break-even number, set it on purpose, and stop expecting the budget cap to do your bidding for you.
