How to Use Custom Labels to Make Your Google Ads Way Smarter
- Michael Chachashvili
- Apr 10
- 5 min read
Online advertising is more competitive than ever. For businesses vying to stand out on Google Shopping, custom labels provide a critical edge. They allow granular categorization and targeting, empowering advertisers to refine their campaigns and maximize ROI.
What Are Google Shopping Custom Labels?
Custom labels in Google Shopping are optional attributes that help you organize and categorize your product data within a Merchant Center feed. Unlike standard Google attributes (such as price, brand, or availability), custom labels offer flexibility, letting advertisers group products in ways that align with unique business goals.
These labels, ranging from custom_label_0 to custom_label_4, help you segment products for priorities like promotions, performance benchmarks, or custom groupings. They aren't visible to end users but are essential for internal campaign structuring and optimization. For more details, Google's official guide on custom labels provides clear insights.
Overview of Custom Label Usage
Custom labels allow marketers to categorize products in ways that align with their strategy. Here are a few applications:
Price Tiers: Group products into categories such as “Under $50,” “$50 to $100,” or “Over $100.”
Seasonality: Use tags like “Winter Collection” or “Holiday Sale” to align campaigns with timely promotions.
Performance-Based Labels: Highlight items like “Top Seller” for aggressive bidding, or “Low Performer” for budget adjustments.
Promotional Categories: Add labels like “50% Off” for products with active discounts.
Profit Margin Prioritization: Use values like “High Margin” or “Low Margin” to focus on profitability.
For example, a store might set custom_label_0 to “Best Sellers,” custom_label_1 to “On Sale,” and custom_label_2 to “High Inventory,” ensuring every product fits into a well-thought-out system.
How Custom Labels Fit Into Product Feeds
Custom labels are integral to a well-optimized product feed. They act as signals within your Merchant Center, helping you fine-tune bidding and segmentation. Instead of merely relying on broad attributes, custom labels let you dive deeper into campaign strategies specific to how your business operates. For guidance on adding these fields, consult this Merchant Center guide about custom labels.
Best Practices for Creating Custom Labels
While tools can help automate the process, a thoughtful strategy is critical to making the most of custom labels. These best practices ensure your product groupings are both actionable and aligned with your marketing goals.
Segmentation Based on Product Performance
Start with the data you already have. Pull sales reports to identify top performers and slow movers. For high-performing items, create specific custom labels (Top_Seller) to adjust bids upward. For under-performing items, tags like Needs_Optimization or Low_Sales can guide strategic pivots. ReProduct can automate this process by dynamically analyzing sales data and automatically assigning "Top Seller" or "Low Sales" labels, ensuring your campaigns are always optimized based on the latest performance trends. Real-Life Application: An electronics retailer, "TechGadgets," noticed that their smart home security systems were consistently their top-selling products. They created the custom label Top_Seller_Security and increased their bids for these products, resulting in a 40% increase in conversion rates and a 20% boost in revenue. Conversely, they labeled slow-moving items like older model tablets as Low_Sales_Clearance and reduced their bids to conserve budget, while still maintaining visibility. ReProduct's AI-powered platform would have proactively identified these trends, automatically adjusting bids to maximize revenue from high-performing security systems while optimizing budget allocation for tablets, ensuring a higher overall ROI.
Using Seasonal and Promotional Labels
Consumer demand shifts frequently, especially during peak shopping seasons like Q4. Custom labels allow you to stay nimble by assigning tags like Holiday_Discounts, Summer_Favorites, or Black_Friday_Deals. When integrated, these labels help you capitalize on timely opportunities, ensuring the right products are prioritized in key periods. For an in-depth guide on maximizing your Merchant Center performance during the crucial fourth quarter, see our article on Optimizing Your Google Merchant Center for Q4 Success. ReProduct automates seasonal campaign management with precise scheduling of label application and bid adjustments. Its AI optimizes bids, budget, and product visibility based on real-time performance and competitor activity, maximizing revenue and profit. Real-Life Application: An apparel brand, "FashionForward," used custom labels to prepare for their Black Friday sale. They labeled all discounted items with BlackFriday_Deals and scheduled their campaign to start on the day of the sale. This allowed them to dynamically adjust their bids throughout the day based on performance, resulting in a 30% increase in Black Friday sales. ReProduct's dynamic optimization engine would have further amplified these results by predicting demand fluctuations and automatically adjusting bids, ad placements, and product visibility in real-time. This would have maximized both sales volume and profit margins, providing FashionForward with a significant competitive edge.
Leveraging Price and Margin Data
Profit margins are everything. If you know which products drive more profit, use labels like High_Margin or Low_Cost to focus your bidding power where it will make the biggest impact. Similarly, price-sensitive products can carry tags like Budget_Friendly or Premium.
For a breakdown on effectively assigning and optimizing these attributes, check out DataFeedWatch’s guide.
Optimizing Google Shopping Campaigns With Custom Labels
Once you've set up custom labels, success depends on proper implementation and ongoing optimization.
Creating Bid Strategies Based on Labels
Custom labels enable tailored bidding strategies. Categorize high-value items under one label (High_Priority) to increase bids, or tag lesser-priority items (Budget) to lower bids and conserve resources. Dynamic strategies can also target time-sensitive opportunities, such as a Clearance label for end-of-season sales. ReProduct automates label-driven bidding with AI, dynamically adjusting bids based on performance predictions and profit margins to maximize ROI. Real-Life Application: A home goods retailer, "HomeEssentials," segmented their products using custom labels High_Margin and Low_Margin. They then created separate campaigns for each segment. For the High_Margin campaign, they increased their bids and ad spend, resulting in a 25% increase in overall profit. For the Low_Margin campaign, they focused on remarketing and promotional offers to drive volume, without sacrificing profitability. ReProduct's intelligent automation would have streamlined this process, dynamically allocating budget and optimizing bids across both campaigns to maximize overall ROI and profitability, freeing up HomeEssentials' marketing team to focus on strategic initiatives.
Tracking and Analyzing Performance
Use Google Ads or analytics tools to assess each label's performance. Break down data by conversion rates, click-through rates, and overall ROI. Refining your strategies based on this insight ensures long-term effectiveness. Resources like Intelligent Reach's explanation delve into monitoring progress effectively.
Tools and Automation for Custom Label Management
High-volume eCommerce businesses often need automation. Tools simplify granular management, freeing up time for strategic decisions.
Feed Management Solutions
Platforms like Feedonomics streamline and automate product feed processes, including custom label setup. Google's feed rules also allow businesses to create rules-based segmentation directly in the Merchant Center, offering an alternative for teams with limited tools.
AI and Dynamic Labeling
AI-based solutions dynamically respond to changes in performance data or trends. These systems, like those mentioned in tools from companies such as ReProduct, assign labels and refine campaigns in real time, optimizing for high-value or seasonal shifts. Machine learning ensures ongoing improvement without manual intervention.
ReProduct stands out with its advanced AI-powered dynamic labeling and campaign optimization capabilities. Unlike basic feed management tools or Google's feed rules, ReProduct automatically adapts to changing market conditions and performance data, ensuring your Google Shopping campaigns are always optimized for peak performance.
Custom labels aren't just a tool - they're a foundation for advanced campaign strategies. They allow advertisers to manage budgets, prioritize high-impact products, and respond to market trends with pinpoint accuracy. Whether you're new to Google Shopping or looking to scale an existing strategy, these labels turn complexity into opportunity. For brands serious about making the most of Google Shopping, leveraging tools like ReProduct or automating feeds is key to sustainable success. Use the strategies outlined here, test rigorously, and unlock the full potential of your campaigns. Ready to unlock the full potential of custom label optimization? Contact ReProduct for a free consultation and discover how our advanced solutions can help you maximize your Google Shopping ROI.
