Google changes default local inventory Ads settings

Google has officially announced a significant update to how Local Inventory Ads (LIA) are managed within Standard Shopping campaigns. Starting August 31, 2026, LIA will be enabled by default for all campaigns linked to Merchant Center accounts that have the Local Inventory Ads add-on active.

For digital marketing teams managing medium-to-large retail brands with distinct online and offline sales strategies, this update requires immediate attention to prevent budget misallocation.

Key Changes and the new filtering system

To streamline campaign management and eliminate redundant settings, Google is completely deprecating the legacy “Local products” setting under Other settings. Instead, local inventory management will be centralized under the Inventory filter.

The updated system will allow advertisers to segment and control their inventory using two distinct parameters:

• Channel = Local — to drive foot traffic and sales to brick-and-mortar locations.
• Channel = Online — to focus exclusively on e-commerce transactions.

This shift aims to simplify campaign architecture and eliminate overlapping controls within the Google Ads interface.

Why this matters for enterprise and mid-market retailers

The automated activation of Local Inventory Ads can drastically alter campaign performance and budget distribution if left unmanaged.

For businesses that run separate budgets, distinct KPIs, and isolated attribution models for online and in-store channels, ignoring this update will merge these traffic sources. Consequently, budgets allocated purely for e-commerce could be directed toward local inventory promotion, complicating accurate ROI/ROAS measurement for both channels.

Action plan for marketing departments

To maintain strategic alignment and prevent unintended budget shifts, marketing teams should complete the following steps before the deadline:

1. Audit Active Campaigns: Review all active Standard Shopping campaigns connected to Merchant Center accounts where the Local Inventory Ads feature is enabled.
2. Apply Inventory Filters: For campaigns requiring strict budget separation between online and offline channels, manually configure the Inventory filter to specify Channel = Local or Channel = Online.
3. Adjust Performance Attribution: If you choose to leverage the consolidated default setup, ensure your tracking and attribution models are updated to properly value offline conversions and store visits.

With the update scheduled for August 31, 2026, brands have a critical window to audit their accounts, train teams on the new filtering mechanism, and prevent performance disruption ahead of the peak autumn and holiday sales seasons.

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