Why Your Google Ads CPCs Went Up After August (And Why the Fix Is Not More Budget)

If your Google Ads cost per click went up in late August and has stayed up, the cause may not be anything you did. Google changed how its bidding works in August, and that change may have contributed.

On 17 August 2026, Google rolled out a change to Target CPA and Target ROAS bidding for campaigns that are limited by budget. The rollout finished on 27 August. Google did not change your settings. It changed what those settings mean.

This article explains what changed, how to tell if your account was affected, and what to do about it. The short version: the fix Google recommends first does not cost you a penny more.

Many small accounts run the same setup. A fixed daily budget, plus a Smart Bidding target such as “£40 per lead” (Target CPA) or “400% return on ad spend” (Target ROAS). The budget runs out most days, so Google shows the status “Limited by budget”.

Before August, that setup had a quiet benefit. When the budget capped a campaign, Smart Bidding tended to bid cautiously. It went for the cheaper auctions and often beat the target you set. Your target said £40 per lead. You were getting £32.

Smarter Ecommerce, a Google Ads technology company, looked at this in its own data. In the three months before the change, more than half of the budget-limited Target ROAS campaigns beat their target. Only 30% of campaigns without a budget limit did the same.

From 17 August, Google says budget-limited campaigns now “optimize more consistently toward their set target”. In plain English, if you said £40 a lead, Google now aims for £40 a lead, even when it used to find you £32.

Your spend should not change much, because the budget still caps it. Before the rollout, Google's Ads Liaison, Ginny Marvin, said the change “won't result in campaign spend changes”.

What can change is what you get for the same spend. Google says the update may affect campaigns that were beating their targets. The figures below are not Google's. Smarter Ecommerce's figures since 17 August, for budget-limited Target ROAS campaigns in its data:

• Median cost per click up 15.8%, from €0.38 to €0.44.
• Median impression share down from 40% to 31%.
• Over the same period, CPCs on campaigns without a budget limit fell 13%.

These are ecommerce campaigns in one company's dataset, in euros. Your account will not match them exactly. But the direction is the useful part: same money, dearer clicks, fewer of them.

In your account, the symptoms look like this:

• CPCs up from late August, with no change to keywords, ads or budget.
• Search impression share down.
• Cost per lead or ROAS drifting from “better than target” to “roughly on target”.
• Fewer conversions for the same monthly spend.

If that list sounds familiar, the rest of this article is for you. If your costs have been creeping up for longer than a month, the causes are usually wider. See why your cost per lead keeps rising.

Check three things. It takes about 10 minutes.

1. Bid strategy. The change applies to Target CPA and Target ROAS on Search, Shopping, Performance Max, Demand Gen and Travel campaigns, and to Target CPC on Demand Gen. Maximise Clicks and manual CPC are not in scope.
2. Budget status. Look for “Limited by budget” in the campaign's Status column. No budget limit usually means little or no impact.
3. Before and after. Compare the four weeks before 17 August with the four weeks after 27 August. Look at CPC, impression share, conversions and cost per conversion (or ROAS). Exclude any weeks where you changed budgets or targets yourself.

If a campaign ticks all three boxes, and it was beating its target before August, it is the kind this change hits hardest.

The numbers below are made up to show the mechanics. They are not from a real client.

A home services business spends £3,000 a month on one Search campaign, limited by budget. Its Target CPA is £40. Through June and July it actually paid about £32 per lead, so roughly 94 leads a month.

After the update, Google steers the campaign towards the £40 target it was given. Spend stays at £3,000. At £40 a lead that is 75 leads. Nothing is broken, and nothing in the account was changed. The business gets about 19 fewer leads a month for the same money.

The target of £40 was never the goal. It was a guardrail somebody set once and forgot. In this example, the £32 was the real performance, and the update can erode it.

1. Set your targets to what you actually achieved

This is Google's own first recommendation. Its help page is clear: “Google does not automatically adjust your bidding targets or budgets.” It tells advertisers to update targets “to match recent performance averages”, using the Target Adjustment Tool.

In the example above, that means moving Target CPA from £40 towards £32. For Target ROAS, it means raising the target towards the return you were really getting.

This costs nothing. It tells Google the truth about the efficiency you expect. Two cautions:

• Give it time before you judge. Google says Smart Bidding reacts to large and small target changes in real time. It recommends waiting one to two conversion cycles before you evaluate the result. A conversion cycle is the usual time from click to sale or lead, so for some businesses that is days and for others it is weeks.
• Use clean data. Base the new target on a period without promotions, tracking faults or budget changes. If you are not sure your conversion tracking counts real sales and real leads, fix that first. A target built on bad data only makes the bad data more precise. See platform ROAS vs incremental ROAS.

2. Accept a little less reach where the economics say so

Lower impression share is not a problem in itself. If the extra auctions only paid off because the old system bid cautiously, some of that reach was never worth full price. Losing it can be the right outcome.

The question to ask is not “how do I get my impression share back?” but “what would the next lead or sale cost, and is it worth it?”

3. Raise budget only where the margin supports it

With no budget limit, a campaign is not affected by this change. So more budget is a real fix. It is also the only fix that increases what you pay Google.

Before you raise a budget, check that the extra spend would buy extra customers at a profit, and not just more of the conversions you were already getting. Our guide to auditing paid media waste before a budget increase covers how. Be careful with advice that goes straight to “spend more”. It may be right for some accounts. It is never the only option, and a Google rep's recommendation is not a neutral one.

If your spend has been rising without a clear return, these are the signs Google Ads is wasting money.

Smart Bidding bids towards the targets you give it. Whatever targets are in your account in October are the targets it will chase through Black Friday and December, when auctions are most expensive.

If your targets still reflect a guess made a year ago, the August change means peak-season bidding will aim for that guess. Setting targets now, based on what the account actually delivers, is the cheapest Q4 preparation there is.

This is the kind of work we do in paid media efficiency: finding where the same budget can buy more, before anyone asks for more budget.

• Google Ads Help: update to target-based bidding for budget-limited campaigns
• Google Ads Help: Smart Bidding FAQ (target changes and conversion cycles)
• Smarter Ecommerce: Google ends its bid suppression era (CPC and impression share data)
• Search Engine Journal: Google clarifies Smart Bidding update after advertiser concerns