How Google's upcoming Smart Bidding update will impact your dealership’s campaigns on Google Ads.

The mechanics of the August 17 automated bidding shift.

Currently, if you run a Google Ads campaign that has been labeled as ‘limited by budget’, the system often outperforms your set target. For example, if you set a target acquisition cost of $100 for appointments but your daily budget is tight, Google naturally restricts its bidding to the highest-intent shoppers. As a result, you might routinely see an actual cost per acquisition of $60.

Beginning August 17th, Google will stop factoring in your budget constraints. Instead, the algorithm will treat your target metric as the exact performance level it needs to hit. If your target is set to $100, Google will actively bid higher and more aggressively to spend up to that $100 threshold, even if your daily budget limits the campaign.

Why Google is introducing these paid search changes.

Google states that this update aims to bring predictable scaling to your account. Previously, if a dealer increased the budget on a high-performing but budget-constrained campaign, performance metrics would often fluctuate wildly because the algorithm had to abandon its hyper-selective bidding strategy.

By forcing the system to stick strictly to your stated target regardless of budget size, Google aims to make scaling your daily budgets smoother. This predictability is helpful but if your campaigns aren’t prepared for this change, your efficiency may be negatively impacted.

Three immediate steps to safeguard your automated bidding strategy.

Leaving your Google Ads Paid Search targets on autopilot past the middle of August will likely cause an immediate increase in your real-world acquisition costs. Use this checklist to protect your digital marketing performance.

1. Audit your budget-constrained campaigns: Pull a report of all active search, shopping and Performance Max campaigns that display a limited by budget status. Consider consolidating if needed.
2. Review real-world performance against account targets: Compare your actual cost per acquisition and return on ad spend over the last 30 days against the formal targets typed into the campaign settings.
3. Align your targets with historical reality: If a campaign consistently outperforms its target, adjust the target to mirror reality. Change a loose $100 target to $60 to force Google to keep buying ads at your current efficient baseline.

Are you unsure how these automated bidding updates will impact your current dealership accounts? Contact our paid search team today for a comprehensive campaign audit.