Understanding custom labels: The basics
Using custom labels allows you to segment your products based on criteria of your choosing. We’ll go through the basics and then specific examples and when to use them later on. With Google text ads you can bid on specific keywords, but that’s not possible with Shopping ads. That’s why elements like negative keywords and custom labels are some of your biggest assets when it comes to controlling your ad spend.
New to Google Shopping? Read this first.
Product feeds can come in multiple formats and forms like XML, CSV, TXT, etc. They contain all the information and data about your items and are then used to give that information to Google in an organized way.
Here’s a product feed example in a Google spreadsheet:
Sometimes, understanding how feed attributes and fields work is not really straightforward. Therefore, for the purpose of this guide, let's think of a product feed as a simple spreadsheet showing the list of products you have in your catalog.
Rows show the list of products and columns show the products' attributes like product ID, Title, Description, Price, Availability and so on. Let's assume you would place the ID attribute in the first column of the sheet, column A. Then you could place the title in column B, the description in column C and so on.
In Google Shopping, some columns (also called attributes, fields or product data) are mandatory, while others are optional. (Click here for more details about mandatory and optional attributes).
What are custom labels?
Google Shopping enables you to create product groups. You can base them on the following attributes:
- Custom labels
- product Type
- Item ID
- Channel exclusivity
If you would rather break down your product groups by another attribute, custom labels offer you the opportunity to create groups of products based on conditions you set yourself.
Custom labels are not a required attribute for your product feed to be approved. But they do hold the key to unlocking product segmentation for your campaigns.
You can add up to 5 custom labels to your product feed, starting with 0 and going to 4. Below is an example of how you label then and possible definitions and values you could use:
Thanks to custom labels, it is possible to segment your products to allow for greater freedom in bidding.
Adding these values for every individual product allows you to segment the biddings on your listings within your Shopping campaigns.
While the other feed attributes are tied to a specific product and always have to be the same as shown on the advertiser's website, custom labels can be anything and potentially change any time you want.
In fact, their values aren’t shown anywhere else other than in your Google Ads account.
To recap, you can use custom labels in your product data feed to:
- Segment your products
- Have more control over bidding
- Stay competitive
- Run experiments
- Highlight sales
- ...and more! (Side note: custom labels can also play a role in other campaigns - for example, to filter products included in TrueView for Shopping Video Campaigns)
We’ll take a closer look at each of these further in the article.
How to create custom labels
Let’s start with some of the ways you can add custom labels to your product feed.
Use static value with DataFeedWatch
By mapping this rule you can extrapolate a word from any product attribute and populate a custom label column with that same word. In the example below, the rule looks up all products where the word 'shirt' appears in the title (or description) and populates a custom label column with the same word. This way you can aggregate all shirts into one product group in Google Ads.
For seasons or other attributes for which you do not have a separate field:
For Margin based on price:
For Top Sellers. You can label individual products as a top seller by mapping it from the product ID:
Or, if you have a list of top sellers, you can also just upload them to DataFeedWatch and use 'is in list':
If you’re not using a feed management tool, you can use a supplemental feed to create them in your product feed.
The easiest way to set them up is to create a new Google Spreadsheet. Then you can use the first column for the product ID and the following columns for the label you want to use. After that you can upload it to Google Merchant Center.
What you can use custom labels for in practice
Now that you understand what custom labels are and how to create them, let’s see how you can make use of them in your Shopping campaigns. We already mentioned that custom labels allow you to have greater control over where your ad spend goes. But what are the specific uses?
Some other benefits are that you can make wide changes quickly, like excluding certain seasonal items.
Arguably the biggest use of custom labels is segmenting your Shopping campaign for optimization. We’ll go through the 6 most common uses but, as you’ll see at the end, you can use them for really anything you’d like.
Sales, clearance, and promos
Let’s say you’re wanting to keep up with your competitors and know that your sale prices will set you above the rest and result in an increase of sales. In that case, you can segment those items and bid higher on them so that more shoppers see them.
You could do the same thing for clearance items you want to get rid of quickly, or as a gateway for shoppers to find more items in your shop. Combined with a good shipping deal and you’ve got yourself a sale.
Do your high end items lead to more clicks? Or maybe your low-medium priced items are what brings the most traffic from your product ads. If you are seeing a strong correlation in this area, you can set up a price point based custom label to segment and bid on those items accordingly.
Profitable vs. Unprofitable
Wasting ad budget on items that aren’t making you sales is a bummer for any merchant. Combat this by dividing your products between the ones that make you a profit and the ones that don’t.
There are bound to be products in your catalog that perform better than your other. You can put these products into a group so you can increase the bid on them. Just make sure that these items aren’t costing you more to advertise than they make you in profit.
It will also be worth it to take a look at these products and see if there’s any differences from your other products that could be causing them to perform better. Make a list and save it for A/B testing (more on that later).
Easy example: spending your ad budget on bathing suits in the middle of December may not be the best investment (if you’re in the Northern Hemisphere, of course). If you have a lot of seasonal items like this, you’re going to want to segment them so that you can easily exclude them or lower your budget when it’s not likely to be a big seller for you. It's important to note that seasonality factor can be applied to eCommerce sectors beyond apparel. For instance, if you're selling vitamins you may notice a spike in interest in Vitamin D during the cold months - perhaps it's worth making your bids more competitive for that product group when winter's around the corner.
Shoppers LOVE free shipping, or good deals on shipping. If you have different methods of shipping (like free, drop, standard), you can separate them by shipping option and promote them.
...or anything else
You can actually use them for nearly anything you can think of. Some other examples include:
- in-house brands
- ...and more!
A note about bidding
Simply put, if you want your product to be visible more often then you can increase your bid. If you want the opposite, then decrease your bid for that particular segment. As always, keep an eye on your analytics to see how your products are performing to know what’s best to do.
Let’s dive even deeper into some real-life scenarios you might find yourself in.
Bid more aggressively on bestselling and seasonal products
When it comes to large e-commerce websites, chances are only a relatively small fraction of the product catalogue is actually relevant at a given time. For example, for a bookshop, the bulk of sales would be mainly driven by the most trending books of the season.
Given your time is limited and you can't optimize all the thousands of products you have in the feed, it makes sense to prioritize just those books. What you can do then is pulling a report for the bestselling products of the week and putting them into a Google Sheet.
Then you can add a column called, for example, 'segment' and populate it with the value 'Bestsellers'. As long as the product IDs you have entered in the Google Sheet match the ones in your primary feed, you can then upload this sheet as a supplemental feed in the Merchant Center.
At that point, you can use the 'set to' rule to set custom_label_0 in your primary feed to be equal to the 'segment' attribute in your supplemental feed. See below how your supplemental feed might look like:
You will then find the custom label's values in your Google Ads account. From there you will be able to create at least two product groups, one containing all the products with custom_label_0 equals 'Bestsellers' and the other with all the rest of the catalog.
Furthermore, using Google Sheets formulas you can dynamically change the custom labels' values. For example, as soon as a product is not a top seller anymore, the value can automatically change from 'Bestsellers' to 'Low Priority'.
You can also split product segments in different campaigns, rather than just product groups.
This way you can allocate different budgets rather than just bids. This is particularly helpful when you use automated bid strategies like Target ROAS or Maximize Clicks, which don't allow for manual bids.
Be more competitive on high-value/high-margin products
You can use the same strategy (supplemental feeds + custom labels) to segment products based on their strategic value, which can be either about margin or price.
Again, you can either bid more aggressively on valuable products or put them in a separate campaign with a higher budget. You can also create multiple segments based just on the product price.
For example, you can aggregate all products priced under €5, and then between 5 and 15, between 15 and 30 and so on. Even though you are still not sure how to bid on them, segments can still be useful to just see how those products perform as an aggregate.
Based on that, you will be able to set optimal bids down the line.
Be less competitive on products with missing or wrong attributes
Sometimes it can happen that the feed generated by the developers is not 100% accurate. Some products might be missing the description, which is highly recommended but not mandatory.
Or maybe some others just have a default image because the actual one wasn't able to be sourced. Large feeds are full of inaccuracies like those. Although you can use supplemental feeds to fix some of these issues, chances are you won't be able to fix all of them.
Therefore, you want to exclude, or at least set a low bid, on products with missing attributes, as they basically look bad compared to the competitors' ones. You can go to the diagnostic tab in your Google Merchant Center account and download the full list of products with attribute issues.
Then, you can add them to a supplemental feed and create a column which you will use to populate a custom label attribute in your primary feed. This can be done through the aforementioned 'set to' feed rule.
Before you can start using custom labels you have to think about how you want to organize them, of course. Using a table like the one below helps you define the right objectives and values that fit your specific needs.
Based on the examples before this could look like this:
High turnover, Low turnover
High revenue, Low revenue
New, Clearance, Sale
High margin, Low margin
Christmas, Superbowl, Winter
Track performance on a product-group level
Since your products are now segmented, you’ll be able to view reports and metrics at the product group level. In fact, once you have created multiple product groups, you will be able to see their performance at a glance.
Product-level reporting, although available in Google Ads under the 'products' tab, is definitely not a viable option for large e-commerce businesses with huge feeds. Rather, reports at the product group level are much more insightful and easier to read.
Through product-group-level reporting, you are able to test a segment performance against another one
For example, you might want to see how the shipping cost influences the conversion rate. So you would create a product group aggregating all products which are shipped at a X price and another group of products shipped at a Y price.
Then you can compare the performances. How would you be able to segment products this way? Easy, populating a custom label column based on the products' shipping price.
6 Google Shopping experts share their favorite custom label uses
One of my favorite custom labels for Google shopping is <Product name>.
It may sound weird, but in the Google interface you can subdivide products by Brand, Product type, channel, Item ID etc. etc. - but you can’t subdivide by product titles or product name. See screenshot 1.
So here is a simple trick to subdivide by product names (titles) in the Google interface by using custom labels and feed rules.
To be able to do it in the first place, you’ll need to make a tiny tweak in Merchant Center where you set Custom label 0 to be equal to title by using Feed rules. See screenshot 2.
By doing this, we are assigning Custom label 0 a value from the existing feed – in this case product title. After this, you can go to the Google Ads interface and subdivide by Custom label 0 – and just like that you have your product names in the view instead of for example Item ID.
Limitations: Be aware that there is a limitation to custom labels and you can only have 1.000 unique values – so this should work just fine in accounts with less than 1000 products.
Products subdivided by Item ID vs. Products subdivided by Product Title.
Another favorite custom label is price buckets
Price bucket segmentation or grouping is classic and a great way to separate products by price range. This is also useful when there are large variations in product prices.
By grouping by price buckets, you will easily get an overview of which product range products that provide you with the most value for your campaign and company.
For example, a product that costs $150 could be in the price range ‘$50-$150’.
You can define several price buckets. For example:
< $50 $50 - $150 > $150
You can create price bucket custom label directly in Merchant Center by using feed rules or use any other third party feed optimizations tools.
What we normally do, is that we use feed rules where we set a condition if price is greater than ‘XX’$ then set Custom label to “ProductPriceOverXX”
Last but not least we have competitive pricing – custom label
If your pricing on some of your products is competitive then why not take full advantage of it? For some clients, we are using the competitor's price in Custom labels. This way we can see if our client’s products are cheaper or more expensive. By knowing this, we can bid more aggressively on the products that we now know are cheaper than the ones of the competitors – assuming it will perform better ☺.
There are several tools out there which can be used to get the competition prices and display inside the Custom label.
Beginners: A simple way to configure custom labels is to base it on product pricing, while product pricing often is a good indicator for earnings.
When using the custom label for product pricing I usually arrange groups of low, medium and high product prices: 0-500DKK, 501-1.500DKK and 1.501DKK to max price in the feed.
Set campaign priority to low, medium and high and bids in that order.
Experts: Besides arranging your products according to product price, you can use the custom label for creating the optimal ‘3 campaign solution’; Generic, Brand and Model/Product. Set the campaign priority as high, medium and low respectively and bids in reverse order.
Next add all model and brand terms as negatives to the generic and all models/products to the brand campaign. I prefer using a shared budget for all three of the campaigns, while this allows you to bid lowest for the generic, more for brand and the most for model/products.
Using the custom label is also possible for seasonal inventory and if you have more than e.g. 8 products in stock of a product and want them sold, you can automatically place them in a higher priority campaign.
Custom labels are first and foremost about bid differentiation across Shopping campaigns and groups of products.
Identifying key differences in expected product performance lets you adjust your bids accordingly. Below are some of my favorites that can be set up by using DataFeedWatch.
- Sales vs. normal price items: Divide your Shopping campaigns into two tracks to enable higher bids on sale items, as you can expect higher CVR and you may want to clear out stock of sales items first.
- Gross margin brackets: If you have this information avail
- able, you can create custom labels with intervals of either absolute gross margin levels, or as a percentage of revenue. This means that you can divide Shopping campaigns into different CPA targets (if absolute) or ROAS targets (if ratio), depending on the profitability.
- Bestsellers (of the season): Creating a label for your best selling items, possibly also of the current season, is a very powerful strategy to bid up on the products that are most likely to convert right now.
Depending on the industry, you may need to update this quite frequently (e.g. for books). It may not be the PPC specialist who is best informed to know what will be a bestseller in advance, so basing the labels on a “is in list”-rule, means that another person with this information can update it ongoing from a shared spreadsheet.
One of my favorite labels is definitely the “On Sale”-label. We often see that our clients are more price competitive compared to the competitors, when having products on sale, therefore we tend to raise the focus on those products.
Price is also a ranking factor on Google Shopping, and it is important not to miss out on conversions due to, for example, low bids.
Some other of my favorite labels are our season labels, which we use according to the seasons: Black Friday, Christmas Sale, January Sale, High Season/Low Season, etc.
This way, it is much easier to adjust the bids higher and lower according to the season – for example, we want to bid more for swimwear, when we approach the summer compared to what we want to in the middle of winter.
Besides there are always better options in selling in the high season when bidding higher on items that you may not sell that much of normally. You may say that we use Custom Labels to switch between the different seasons in a much easier and efficient way.
Since "Data-driven" is in our DNA, we always work with as much data as possible. During the years we have helped many clients, including some of Denmark's largest companies.
When we work in our clients' Google Ads accounts we never do anything, which is not Data-driven. We do deep analysis of all the data we can find, and we work actively with our clients' data. One of the things we work with is labels in Google Ads campaigns, and custom labels for Google Shopping campaigns.
Two of the labels we love the most, and most often use are "Season" and "Margin". These labels are incredibly helpful, when we work with bidding strategies. If you don't use labels, and just want to start out with one label, then go for "Margin". This is a need to have.
Why are the labels "Season" and "Margin" so useful?
These labels are useful because you can define values such as "Winter", "Spring", "Summer", "Fall" (for Season) or "LowMargin", "HighMargin" (for Margin) to better target your customers with the right products at the right time, and have control over your bids.
If the demand for a product doesn't change during the year, you don't need "Season". If you run Google Ads campaigns try to check out your Dimensions data first. Does demand change during the year? If the answer is "yes", then you should use "Season" for your Google Shopping campaigns.
To understand if a product is "LowMargin", "HighMargin", we work closely with our clients, as they usually have this data. This information is very valuable to us, so we can determine the best bidding strategy, so that we not only get as many conversions as possible, but also achieve the highest profitability for our clients.
Taking an objective look at your campaigns will likely show you that not every sale made through search ads will positively impact your ROAS. Rather than focusing on the number of sales, you can turn your attention to increasing your profit instead.
Custom labels are the perfect vehicle to make this change. Let’s imagine that you are selling shoes.
Medium and expensive shoes make you a profit in this example, but the cheap shoes do not. In fact, you would even lose money on each sale. By segmenting your products into these 3 categories will prevent that from happening.
You can accomplish this in 3 steps:
1. Start with merging your main data feed source with your margin data. You can also calculate it right in your feed if you have the item_cost attribute filled out there.
2. Now you can create a custom label rules and assign them with a specific margain. For example, you can use "margin $20 - $25".
3. Lastly you can begin sub-dividing your campaign based on the rules you've just created.
Final thoughts: Why does all of this actually matter?
Using custom labels is a way to “put your best foot forward” on the SERP. You want to show shoppers products that have the highest chances of converting. This also means you’ll have a better chance of showing up closer to the front of the results.
This also gives the Google machine learning system more signals of who to show your products to. The more accurate information you can give, then better.
Therefore, you want to segment as much as possible even if you are already taking advantage of Google automated bid strategies or universal shopping campaigns.
Download our Guide to Data Feed Optimization eBook to learn more about:
- How to improve the quality of your product feed?
- Different shopping channel business models and which one works best for you?
- What tactics to use to improve the shopping campaign ROI.