Google Ads Defaults Local Inventory Ads for Shopping Campaigns in 2026: Key Changes & Action Items

Google is making Local Inventory Ads the default for eligible Standard Shopping campaigns, a shift that will automatically show in-store product availability to nearby shoppers. The change, announced in mid-July 2026, removes the legacy “Local products” setting and replaces it with an Inventory filter (Channel = Local or Online). Advertisers have until August 31, 2026 to adjust their campaigns or disable the Local Inventory Ads add-on.

This update coincides with several other Google Ads changes: Performance Max product reporting now includes data from all networks, Google has tweaked its bidding algorithms, and smart bidding strategy naming has been updated. Together, these changes require ecommerce advertisers to reassess their omnichannel and online-only budget strategies.

Google Defaults Local Inventory Ads for Shopping Campaigns

The key change is that Google is automatically enabling Local Inventory Ads (LIAs) by default for eligible Standard Shopping campaigns. According to Search Engine Land, Google is removing the legacy “Local products” setting and replacing it with an Inventory filter (Channel = Local or Online) effective August 31, 2026. This means that advertisers who previously opted out of LIAs may now see their products appearing in local inventory ads unless they take action.

Businesses with Merchant Center accounts that have the Local Inventory Ads add-on enabled will be most affected. The change applies to Standard Shopping campaigns, not Performance Max. Google has been sending email notifications to manager accounts, as reported by Common Thread Collective. Advertisers must set Inventory filters or disable the LIA add-on before the deadline to avoid mixed online/local spend.

Here’s a summary of the changes:

Aspect	Before July 2026	After August 31, 2026
Default setting	Local products toggle optional	LIA enabled by default for eligible campaigns
Control	Manual toggle in campaign settings	Inventory filter (Channel = Local or Online)
Deadlines	N/A	August 31, 2026 to adjust
Affected campaigns	Only those with LIA add-on enabled	All Standard Shopping campaigns with LIA add-on

Google’s support documentation provides details on how to manage the new Inventory filter. For advertisers who want to show only online products, the fix is straightforward: set the Inventory filter to “Channel = Online.” Those who want to show both online and local inventory can leave the default.

The change is significant for retailers with physical stores. LIAs allow shoppers to see real-time in-store availability, driving foot traffic. However, advertisers who previously opted out of LIAs may inadvertently start showing local inventory, potentially cannibalizing online sales if not managed carefully.

Performance Max Product Reporting Expands to All Networks

In a related update, Google has changed how Performance Max campaigns report product performance. Previously, Performance Max product reporting only included data from Shopping placements. Now, as reported by Search Engine Roundtable, product reporting incorporates data from all networks, including YouTube, Display, Discovery, Gmail, and more.

This change provides advertisers with a more comprehensive view of how individual products perform across Google’s entire ecosystem. Google’s official blog confirms the update. Advertisers can now see product-level metrics (impressions, clicks, conversions) across all channels, helping them allocate budget more effectively.

The reporting update is particularly valuable for ecommerce brands using Performance Max to drive omnichannel sales. Previously, product data was fragmented, making it difficult to attribute conversions to specific channels. The new unified reporting should improve transparency, though some advertisers remain cautious about the “black box” nature of Performance Max. Google’s developer documentation provides API access for advanced users.

Google Ads Bidding Changes: What Advertisers Need to Know

Alongside the LIA and reporting changes, Google has made a subtle but important update to its bidding algorithms. According to Practical Ecommerce, the change affects how Smart Bidding targets are applied, particularly for Target CPA and Target ROAS strategies. The exact nature of the change is still being analyzed by the advertising community, but early reports suggest that Google may be adjusting how it weights conversion data and attribution windows.

This follows a broader trend of Google shifting more control to automation. In June 2026, Google announced changes to Smart Bidding strategy naming, as covered by PPC News Feed. Bidding strategies like “Target CPA” and “Target ROAS” now have more descriptive names to clarify their behavior. Advertisers should review their existing bid strategies to ensure they align with the new naming conventions.

Additionally, Google updated its terms of service in July 2026 to clarify advertiser responsibility for automated campaigns. As per Zato Marketing, the new terms emphasize that advertisers remain responsible for the outcomes of automated features, even if they rely on Google’s AI. This is a critical reminder for brands using Smart Bidding or Performance Max.

Smart Bidding Strategy Naming Updates

Google has renamed several Smart Bidding strategies to make their functions clearer. The changes, effective June 2026, include:

• “Target CPA” is now “Maximize Conversions with Target CPA”
• “Target ROAS” is now “Maximize Conversion Value with Target ROAS”
• “Maximize Clicks” and “Maximize Conversions” remain unchanged but now include additional settings.

According to PPC News Feed, the rename aims to reduce confusion and better communicate that these strategies still prioritize maximizing volume within a target. Advertisers should update their documentation and internal training accordingly.

Practical Implications for Ecommerce Brands

For ecommerce brands, the combination of these updates means action is required before August 31, 2026. Here are the key takeaways:

1. Audit your Shopping campaigns: Identify which Standard Shopping campaigns are eligible for Local Inventory Ads. Check if the LIA add-on is enabled in your Merchant Center account. If you don’t want to show local inventory, set the Inventory filter to “Channel = Online” before the deadline.

2. Monitor Performance Max reporting: With product reporting now covering all networks, take advantage of the new data to optimize product-level bids and creative. Google’s YouTube video provides a walkthrough of the new reporting interface.

3. Review bidding strategies: The subtle bidding change may affect your campaigns’ performance. Monitor metrics like CPA and ROAS closely over the next few weeks. If you see unexpected fluctuations, consider pausing and revisiting your bid strategy targets.

4. Understand automation responsibility: With the updated terms of service, ensure your team understands that automated features still require oversight. Document your campaign settings and maintain control over budgets and targeting.

5. Stay informed: Google continues to iterate on its advertising platform. Follow sources like Search Engine Land and Common Thread Collective for the latest updates.

In summary, Google is pushing forward with automation and local integration. The default Local Inventory Ads change is the most impactful for retailers with physical stores, while the Performance Max reporting and bidding updates affect all ecommerce advertisers. Acting before the August 31 deadline will ensure you maintain control over your ad spend and strategy.