August 2026 Google Ads Update – Demand Gen VTC Bidding Changes

Granular analysis and first look

Google is updating view-through conversion (VTC) optimization for Demand Gen campaigns, with changes affecting bidding, campaign defaults, inventory and billing. For advertisers using Demand Gen as part of their PPC management strategy, these updates make it especially important to understand which conversions Google is optimizing toward.

The biggest changes are that VTC bidding will become video-only, new Demand Gen campaigns will have VTC optimization enabled by default, and Display inventory will gain support with CPM billing for video assets.

What Is Changing With Demand Gen VTC Optimization?

Google outlined three primary changes to how VTC optimization will work in Demand Gen campaigns.

1. VTC Bidding Will Apply to Video Assets Only

Currently, VTC optimization can apply to both image and video assets on supported Demand Gen inventory.

Under the new behavior, only video assets will be eligible for VTC optimization.

For campaigns containing both image and video assets, view-through conversions associated with image ads can still appear in secondary conversion reporting. However, those image VTCs will no longer:

• Be used for bidding
• Appear in the primary “Conversions” column
• Influence VTC optimization

For advertisers, this creates a clearer distinction between how Google evaluates image and video creative within the same Demand Gen campaign.

2. VTC Optimization Will Be On by Default

Google is also changing the default setting for new Demand Gen campaigns.

Today, advertisers must opt in to VTC optimization. Once the update rolls out, new Demand Gen campaigns will have VTC optimization enabled by default.

Advertisers who do not want Google bidding toward view-through conversions will need to manually turn the setting off.

Existing campaigns that are currently opted out will remain opted out unless an advertiser chooses to enable the feature.

Why This Matters for Advertisers

Default settings can have a meaningful impact on campaign performance and reporting, particularly when teams create campaigns quickly or rely on standardized workflows.

Advertisers who primarily judge success using click-based or backend conversion data should pay close attention to this setting during campaign creation. Google notes that VTC optimization can create reporting differences when impression-based conversions are included in Google Ads but are not reflected the same way in third-party measurement systems.

3. Display Inventory Is Expanding With CPM Billing

VTC optimization currently supports YouTube and Discover Feed inventory. Google says the new setup will expand support to:

• YouTube
• Discover Feed
• Display

Along with that expansion, video assets serving on Display will move from cost-per-click (CPC) billing to cost-per-thousand-impressions (CPM) billing.

Importantly, Google says this Display billing change will apply to video assets regardless of whether an advertiser has opted into VTC optimization.

What the CPM Change Could Mean

The billing change more closely connects video advertising costs with exposure rather than clicks.

For PPC advertisers, that means campaign analysis may need to go beyond familiar CPC benchmarks. When video ads on Display are billed on impressions, advertisers should evaluate metrics such as reach, impression volume, view-through performance, conversion quality and overall CPA or ROAS together rather than judging performance primarily by clicks.

This is especially important when comparing historical performance before and after the billing transition.

Why Google Is Making the Change

According to Google, the goal is to better align billing with the type of conversion being optimized.

A view-through conversion occurs when someone sees an ad, does not interact with it, and later completes a conversion. Google’s current documentation describes VTC optimization as a way to incorporate these impression-based signals directly into Demand Gen bidding.

Because these conversions begin with an ad impression rather than a click, CPM billing for Display video inventory more closely matches the behavior Google is attempting to optimize.

What Advertisers Should Review

Google says no action is required for the transition itself, but advertisers should still review how VTCs fit into their measurement strategy.

Before or during rollout, consider checking:

• VTC optimization settings: Determine whether impression-based conversions align with your campaign objectives.
• Conversion reporting: Understand which conversions appear in primary versus secondary reporting columns.
• Measurement platforms: Compare Google Ads reporting with analytics, CRM or third-party attribution systems.
• Creative mix: Monitor image and video performance separately because image VTCs will no longer influence bidding.
• Display video costs: Prepare for CPM-based billing rather than CPC billing on Display video inventory.
• Historical benchmarks: Account for changes in optimization and billing when evaluating performance over time.

Key Takeaways

• Demand Gen VTC optimization will become video-only.
• Image VTCs may still be reported, but they will no longer be biddable or included in the primary “Conversions” column.
• New Demand Gen campaigns will have VTC optimization enabled by default.
• Existing campaigns that are opted out will remain opted out unless VTC optimization is manually enabled.
• VTC support will expand to Display in addition to YouTube and Discover Feed.
• Display video assets will move from CPC to CPM billing, regardless of whether VTC optimization is enabled.
• Advertisers should review reporting and measurement practices before comparing results across the transition.

Google’s Demand Gen changes continue a broader shift toward impression-based measurement and video-focused optimization.

The most important consideration for advertisers is not simply whether view-through conversions increase reported performance, but whether those conversions align with the business outcomes used to evaluate campaign success. Reviewing VTC settings, conversion quality and measurement differences now can help advertisers interpret Demand Gen performance more accurately as the new bidding and billing behavior rolls out.