Google Shopping Campaigns Now Default to Local Inventory Ads: What Ecommerce Brands Must Do Before August 31

Starting in July 2026, Google is changing how Shopping campaigns handle inventory by default. The platform is removing the "Local products" toggle from campaign settings and turning on Local Inventory Ads by default for any account linked to a Merchant Center with the LIA add-on enabled. For advertisers who have not reviewed this setting recently, the deadline to take action is August 31, 2026. After that date, the change becomes automatic and the old toggle disappears entirely.

What Are Local Inventory Ads and Why Does This Change Matter?

Local Inventory Ads are a Google Shopping format that surfaces product listings with real-time in-store availability. When a shopper clicks one of these ads, they see inventory data from a nearby physical location and have the option to pick up the product in store. For omnichannel retailers, LIAs are a powerful format that drives foot traffic while capturing high-intent search demand.

For online-only brands, however, LIAs are irrelevant at best and budget-draining at worst. The core issue with this default change is that Shopping campaigns will now serve both online and local inventory from the same budget unless you take action first. If an online-only brand has the LIA add-on active in Merchant Center without realizing it, their campaigns could begin routing spend toward local inventory signals after August 31, fragmenting performance and creating attribution blind spots.

"For online-only brands, the real risk is invisible spend. A default setting change can quietly redirect budget before you notice the performance drop."

Which Advertisers Are Affected by This Update?

This change affects Google Ads manager accounts running Shopping campaigns that are linked to a Merchant Center account with the Local Inventory Ads add-on enabled. Google communicated the update via email to affected advertisers, and it was first reported publicly on July 16, 2026.

If your Merchant Center account does not have the LIA add-on enabled, your campaigns are not affected by this specific change. But if you are managing a portfolio of brands or operating multiple Merchant Center accounts at scale, it is worth verifying each account individually before the deadline rather than assuming you are in the clear.

What Online-Only Brands Should Do Before August 31

If your business sells exclusively through online channels, this is a good moment to audit your Merchant Center setup. Navigate to your Merchant Center account, go to Growth > Manage programs, and look for the Local Inventory Ads program. If it shows as inactive, no action is required for this specific change.

If the LIA add-on is enabled and you did not intend for it to be, you should either disable the program or update your Shopping campaign inventory filter settings before the deadline. Leaving the add-on active without an inventory filter means your campaigns could begin serving ads for local inventory after August 31, even if you have no physical store presence. This is a budget misdirection risk that is completely avoidable with one configuration update.

What Omnichannel Brands Must Do to Keep Budgets Separated

For brands with both digital and physical retail presence, this change surfaces a genuinely useful capability. LIAs have historically been a strong driver of in-store foot traffic for retail-heavy categories. But running online and local inventory through a single shared campaign budget often leads to optimization conflicts. Algorithms built to maximize online conversions may not serve local inventory efficiently, and vice versa.

If your goal is to manage online and in-store performance separately with distinct budgets and optimization targets, you need to act before August 31. In your Shopping campaign settings, navigate to the Inventory filter section and set the Channel to either "Online" or "Local" depending on what that specific campaign is meant to serve. Campaigns without this filter will automatically serve both channel types once the default change takes effect.

Running separate campaigns with clean channel filters allows for more precise budget allocation, cleaner performance data, and better learning signals for your bidding strategy. It is not a one-time fix. It is the campaign structure that should have been in place all along if you are running both channels at meaningful scale.

"Omnichannel brands that want to budget separately for in-store and online performance have a clear window before August 31 to get their campaign structure right. After that, cleanup is harder."

What Happens If You Miss the August 31 Deadline?

Once the deadline passes, Google will automatically apply the LIA-on default to all affected Shopping campaigns. There is no grace period after that point. The "Local products" dropdown will disappear from the interface entirely, and any campaigns without an inventory filter set will begin serving both channel types from a shared budget.

The change is technically reversible post-deadline. You can still set inventory filters after August 31. But by that point, you may have already accumulated a period of mixed-intent spend that distorts your performance data, inflates your cost per acquisition, and requires cleanup. Acting before the deadline is significantly less work than diagnosing degraded performance after the fact.

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