Google is clarifying its Smart Bidding update after advertisers questioned how budget-limited campaigns will behave beginning August 17.
The original announcement around Smart Bidding changes was June 22. The update essentially changes how Target CPA and Target ROAS campaigns behave when they’re limited by budget.
Today, many budget-limited campaigns outperform their bidding targets. Smart Bidding often enters only the auctions most likely to convert efficiently, producing stronger-than-expected CPA or ROAS.
Google says that wasn’t the intended behavior.
Instead, Smart Bidding will optimize more closely toward the Target CPA or Target ROAS advertisers actually set. Campaigns that currently outperform those targets may move closer to them after the update.
The announcement immediately raised questions across the PPC industry. Advertisers wanted to know why Google would reduce efficiency in campaigns that were already exceeding expectations.
Google’s follow-up comments answer many of those questions. They also explain why the company believes the change will make campaign scaling more predictable.
What’s Changing On August 17?
The update affects campaigns using Target CPA or Target ROAS that are limited by budget.
Historically, those campaigns often outperformed their bidding targets. A campaign with a $50 Target CPA, for example, might consistently generate conversions at $35.
Beginning August 17, Google will optimize those campaigns more closely toward the Target CPA or Target ROAS advertisers set. The company says this should create more predictable performance when advertisers adjust campaign budgets.
Google also clarified several points after announcing the update:
- Budgets will not automatically increase
- Google won’t automatically change Target CPA or Target ROAS settings
- Advertisers who want to maintain current performance may need to lower their bidding targets before the rollout
- Google is rolling out account notifications and a Bid Target Adjustment Tool to identify affected campaigns
Those clarifications addressed some of the initial confusion. They also sparked a broader discussion about how the update could affect campaign performance in practice.
The Biggest Concern: Is Google Becoming Less Efficient?
One question surfaced repeatedly as advertisers discussed the update: Is Google making Smart Bidding less efficient?
Kirk Williams summed up that concern in a LinkedIn post.
He wrote:
…How and why will the system stop trying to be as efficient as possible… Does that mean smart bidding when limited by budget will no longer be trying to find better auctions?… So does that mean they’re building the system to literally choose to be dumber when limited by budget?
Williams questioned why Google would move campaigns closer to their stated targets if Smart Bidding could already deliver stronger performance.
Mike Ryan offered one of the most detailed explanations in the comments.
Ryan argued that Google isn’t making…
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