Google Ads Adds Channel Prioritisation & Budget Allocation
Google Ads Adds Channel Prioritisation & Budget Allocation
Google Ads has introduced “channel prioritisation” and “budget allocation”, giving advertisers greater control over how campaign budgets are distributed across Google Search, Search Partners, the Google Display Network and other eligible channels. The update began rolling out progressively from 15 October 2026 and is particularly important for advertisers running Search campaigns with Display Expansion enabled.
For Australian businesses, this represents a practical shift in campaign management. Rather than relying solely on Google’s automated delivery decisions, advertisers can now indicate which channels should receive budget first and apply a best-effort cap to lower-priority inventory.
What is channel prioritisation?
Channel prioritisation enables advertisers to classify eligible channels as either High priority or Low priority.
- High priority: Google AI aims to allocate budget to these channels first, while working within campaign objectives such as Target CPA or Target ROAS.
- Low priority: Google AI considers these channels after high-priority channels, or where doing so can still meet performance targets.
- Default setting: All channels begin as High priority. Advertisers must actively adjust a channel’s setting if they wish to reduce its share of spend.
For Search campaigns, advertisers can prioritise Google Search, Search Partners and the Google Display Network separately. This makes it easier to direct budget toward the channel most likely to deliver high-intent enquiries, leads or sales.
How budget allocation works
Budget allocation works alongside channel prioritisation. It is available only for channels marked as Low priority and allows advertisers to set a percentage of the campaign’s average daily budget.
For example, if a campaign has a $1,000 average daily budget and Display is set to Low priority with a 20% allocation, Google will aim to keep Display spend at or below $200 per day. This is a best-effort control rather than a guaranteed hard cap, so some variation in daily delivery may occur.
A 0% allocation prevents spend on that channel or channel group. This provides advertisers with a more flexible alternative to switching a channel off completely, particularly when testing Search Partners or Display traffic.
Which campaign types are affected?
The new controls apply to several major Google Ads campaign types, although not every feature is available across all campaign types.
- Search campaigns support both channel prioritisation and budget allocation across Google Search, Search Partners and the Google Display Network.
- Shopping campaigns support both controls for Google Search and Search Partners.
- Performance Max campaigns support both controls; however, Google-owned surfaces are grouped together as “Google channels”.
- Demand Gen campaigns support channel prioritisation but do not currently support budget allocation.
In Performance Max and Demand Gen campaigns, Google-owned surfaces such as Search, YouTube, Gmail, Discover and Maps are grouped as “Google channels”. Advertisers cannot prioritise each of these surfaces individually.
Key benefits for advertisers
The update provides advertisers with greater practical control while retaining the advantages of Smart Bidding.
- Direct budget toward proven channels. Businesses can prioritise Google Search where it consistently delivers stronger conversion quality.
- Reduce unwanted Display or partner spend. Advertisers can cap lower-priority channels rather than excluding them altogether.
- Test with reduced risk. A small allocation can be used to assess whether Search Partners or Display generates incremental conversions.
- Maintain automation. Google AI continues to manage bidding and delivery, but within the priorities and limits set by the advertiser.
- Use campaign-level flexibility. Account-level defaults can be overridden at campaign level where required.
For service businesses, retailers and lead-generation companies, this can help align paid media investment with the channels that generate the most valuable enquiries. A well-structured SEM strategy should connect budget decisions to conversion data, not simply traffic volume.
Limitations to understand
While the update improves control, it does not provide unlimited precision.
- Budget allocation is best effort. It is calculated from the campaign’s average daily budget, not actual spend, and is not a guaranteed daily cap.
- Demand Gen does not support budget allocation. Channel prioritisation is available, but advertisers cannot set a budget percentage for Demand Gen channels.
- Performance Max remains less granular. Google-owned channels are grouped together, so advertisers cannot separately prioritise YouTube, Gmail, Discover, Maps or Search within Performance Max.
- Settings must be managed within client accounts. Manager accounts cannot apply these controls on behalf of client accounts.
- API and Google Ads Editor support are not available at launch.
February 2027 update: what advertisers need to know
The most immediate change affects Search campaigns with Display Expansion enabled. From February 2027, these campaigns will automatically migrate to channel prioritisation and budget allocation. The current Display spend-allocation setup will be removed, and advertisers may see spending shift between Google Search, Search Partners and the Google Display Network.
To preserve current behaviour, Google recommends setting the Google Display Network to Low priority with a 50% daily budget allocation. This helps maintain a similar level of Display delivery under the new control system.
There is also an important bidding change: following migration, GDN will no longer serve on Search campaigns using Target Impression Share bidding. Advertisers using this strategy should review their campaign settings before the deadline.
How businesses can prepare
Australian advertisers should not wait until February 2027 to review their accounts.
- Audit Search campaigns using Display Expansion. Identify which campaigns may be affected by the automatic migration.
- Review channel performance. Compare conversions, cost per acquisition, return on ad spend and conversion quality across Google Search, Search Partners and Display.
- Set appropriate account defaults. Use High priority for channels that consistently perform well and Low priority for channels requiring closer control.
- Use campaign-level overrides. Apply different settings to brand, non-brand, lead-generation or ecommerce campaigns where appropriate.
- Test gradually. Begin with conservative allocations, such as 10–20%, before making substantial changes.
- Monitor results after implementation. Review changes in spend distribution, impression share, conversions and cost per conversion.
- Review bidding strategies. Pay particular attention to Target CPA, Target ROAS and Target Impression Share campaigns.
- Businesses requiring support with campaign structure, conversion tracking and paid search performance can explore Planet Media’s SEM services. We also help organisations improve visibility across AI-powered search and local discovery through tailored SEO services.
FAQs
Is budget allocation a hard spending cap?
No. It is a best-effort limit based on your campaign’s average daily budget, not your actual spend. Google aims to stay within the percentage you set, but daily spend on that channel can occasionally go over.
What does a 0% budget allocation do?
It stops spend on that Low priority channel or channel group. It’s a useful way to test Search Partners or Display without switching them off in your settings.
Do I need to act before February 2027?
Not strictly, because eligible Search campaigns will migrate automatically. But if you want to avoid a shift in spend, set the Google Display Network to Low priority with a 50% allocation beforehand, and review any campaigns using Target Impression Share bidding.
Can an agency manage these settings from a manager account?
Not at launch. The controls have to be set within individual client accounts, and API and Google Ads Editor support aren’t available yet.
Where should a small business start?
Compare conversion quality across Search, Search Partners and Display first. Then set underperforming channels to Low priority with a conservative allocation of around 10–20%, and review the results before changing more.
Can I prioritise YouTube or Maps separately in Performance Max?
No. Google-owned surfaces are grouped as “Google channels” in Performance Max and Demand Gen, so they can’t be prioritised individually.
Conclusion
Google Ads’ channel prioritisation and budget allocation features provide advertisers with a more practical way to guide automated campaign delivery. The priority for businesses is to review Search campaigns using Display Expansion before the February 2027 migration, particularly where Display currently contributes a meaningful share of conversions or spend.
