Google Turns On Local Inventory Ads by Default: What Every Shopping Advertiser Needs to Know

Google is about to flip a switch that quietly changes how millions of Shopping campaigns behave. On July 20, 2026, Google confirmed on its Ads Developer Blog that starting August 31, 2026, Local Inventory Ads (LIA) will be enabled by default for every Shopping campaign — and advertisers will no longer be able to turn them off through the Google Ads API. The change was first reported to affected advertisers by email on July 16 and became official four days later.

For merchants with physical stores, this is largely good news that saves setup steps. For pure e-commerce sellers who deliberately kept online and in-store inventory separate, it is a forced default that can reshuffle where budget goes. This guide breaks down exactly what changes on August 31, who is affected, and the concrete steps to keep control of your spend.

What is changing on August 31, 2026?

Today, "Local products" is an optional setting inside a Shopping campaign that you can switch on or off. After August 31, that toggle disappears and the behavior is forced on. In Google's own words, the update "aligns Shopping campaigns with Performance Max for Retail, where Local Inventory Ads are already enabled by default." Concretely, three things happen at once:

• The "Local products" setting is removed from the Other settings section of Shopping campaigns.
• The enable_local field is ignored across Google Ads API v25.1 and later — whatever value you submit, Google treats it as true.
• Local inventory eligibility becomes automatic for any campaign whose linked Merchant Center account has local product data.

If you do not run physical stores and have no local product feed, the practical impact is minimal — there is nothing local to serve. The advertisers who need to act are those who have local inventory data but chose to keep local and online buying separate.

What are Local Inventory Ads, exactly?

Local Inventory Ads show products from a merchant's physical store to nearby shoppers searching on Google. When someone searches for an item you stock in a store close to them, LIA can surface an "in store" or "pickup today" listing that drives foot traffic and local-intent clicks. It is the bridge between online demand and offline inventory — and for retailers with real stores, it is one of the highest-intent placements Google offers.

The catch is that LIA draws from the same campaign budget as your online Shopping ads. If both channels run under one budget, spend flows to wherever Google's bidding sees the best return, which is exactly why some advertisers used to keep them apart.

Who is affected — and who isn't

Advertiser type	Impact of the default-on change
Pure online retailer, no stores	Effectively none — no local feed means no local ads to serve.
Omnichannel retailer already running LIA	None — you are already opted in; the toggle simply disappears.
Retailer with stores who kept LIA off	Highest impact — local ads switch on automatically and share your Shopping budget unless you re-scope it.
Agencies managing many accounts via API	Must update integrations; the enable_local field can no longer disable local, so tooling that relied on it will silently no-op.

How to keep online and local budgets separate

Since you can no longer flatly disable LIA, control now happens at the channel level rather than the on/off level. Google points advertisers to two supported paths:

1. Set a listing scope by channel. Use CampaignCriterionService to add a listing scope with product_channel set to ONLINE. That restricts the campaign to online inventory even with LIA "enabled."
2. Filter inventory in the campaign settings. In the Google Ads UI, update the Inventory filter to use Channel = Local or Channel = Online so you can run separate campaigns — and separate budgets — for each surface.

The takeaway for anyone who cares about budget hygiene: don't rely on the old toggle. Rebuild the separation using channel filters before August 31, or accept that a single budget will feed both online and local placements. Rising ad costs make that discipline matter — if your CPCs already feel heavier, our breakdown of why Google Ads costs are rising in 2026 covers how automated campaign types widen the auction and quietly reprice traffic.

What agencies and developers should do now

The most disruptive part of this change is on the API side. Any script, bid-management platform or in-house tool that sets enable_local = false to keep campaigns online-only will stop working the moment the field is ignored. Left unchecked, those campaigns will start serving local ads without anyone flipping a switch.

Before August 31, audit your integrations for three things: any code that reads or writes enable_local, any reporting that assumes campaigns are online-only, and any budget pacing logic that could be thrown off by new local traffic. Replace disable logic with channel-scoped listing groups, then verify in a test account that spend stays on the intended surface. This is the same class of maintenance work that keeps automated advertising healthy — clean data and explicit scopes beat implicit defaults.

Why Google is doing this

The stated reason is consistency: Performance Max for Retail already enables LIA by default, and Google wants Shopping campaigns to behave the same way. The strategic reason is bigger. Google has spent 2026 pushing local and omnichannel commerce hard — from AI Overviews surfacing local results to richer shopping experiences inside AI surfaces. Making LIA the default expands the pool of ads eligible for high-intent, "buy near me" moments, which is exactly where offline retail meets online search. If you are thinking beyond paid placements, it is worth understanding how the same buying journey is shifting into AI — our guide to getting your products into AI shopping covers how ChatGPT and Perplexity now recommend products directly in chat.

For merchants, the direction of travel is clear: local visibility is no longer a niche add-on you opt into, it is becoming the baseline. Whether you manage this in-house or lean on outside help — see our look at when to hire a white-label PPC agency — the accounts that adapt their campaign structure will spend more efficiently than the ones that let the default decide for them.

The takeaway

Starting August 31, 2026, Local Inventory Ads become default-on for every Shopping campaign, the "Local products" toggle disappears, and the enable_local API field stops working as an off switch. If you run physical stores, this mostly removes friction. If you deliberately separated online and local inventory, act before the deadline: rebuild the separation with channel-scoped listing groups or inventory filters, and audit any API tooling that relied on disabling local. The advertisers who treat this as a structural change — not a surprise on their September report — will keep their budgets pointed exactly where they want them.