A Google Ads algorithm change across five campaign types now pushes overperforming campaigns toward their exact target cost instead of staying below it. Here's what that means for your budget.
Google updated how Target CPA and Target ROAS behave in budget-limited campaigns across five major campaign types: Search, Shopping, Performance Max, Demand Gen, and Travel. The shift changes the algorithm's behavior when a campaign is outperforming its target.
Before this update, when a campaign beat its Target CPA, meaning it was acquiring customers for less than you set, Google's algorithm would hold back spending to keep costs below target. It was a natural brake on campaigns that were working too well.
Now, Google pushes overperforming campaigns toward the exact target. If you set a Target CPA of $50, but the campaign is acquiring customers for
Your best-performing campaigns, the ones crushing their targets, will now spend more. That sounds like good news until the math hits: higher spend per customer, even at your target CPA, means less profit margin per sale unless your customer lifetime value justifies it.
This is Google's way of maximizing revenue per campaign, not your profit. The targets are now ceilings the algorithm actively tries to hit, not guardrails it tries to stay under. Account for that in your planning.
How WebKing runs this
We watch Google's paid-search updates and reset campaign targets when the algorithm changes behavior. When your top performers start spending closer to their maximum target, we review whether that target still fits your profit margin, and we either adjust it down or shift budget to campaigns with lower acquisition costs.
Google changed how Target CPA and Target ROAS work in five campaign types (Search, Shopping, Performance Max, Demand Gen, and Travel). Campaigns that were beating their targets are now pushed toward the exact target instead of staying below it, so your algorithm is spending more to hit that number.
No, only budget-limited campaigns in these five types: Search, Shopping, Performance Max, Demand Gen, and Travel. If you run other campaign types, they're unaffected.
That depends on your profit margin. If your current target is higher than what you can profitably pay per customer, yes, lower it. The algorithm will then try to hit that new, lower number instead.
It could, because the algorithm now pushes overperforming campaigns to spend more to hit their target instead of holding back. Monitor your daily spend and adjust targets or budgets if costs climb beyond what you planned.
Sources
The Lab is original analysis by WebKing. We summarize and interpret developments from the sources above for industrial, commercial, and small business owners. Figures are reported as published by their sources.
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