How Custom Labels for Google Shopping Can Improve Organization and Profitability

How do I create a custom label in Google Shopping?

Think of your custom labels like tags that you add to certain products in your shopping feed (keep in mind that you’ll add custom label attributes to your products in Merchant Center).

Learn More: Optimizing Titles and Descriptions on Google Shopping Feed

You can have up to five custom labels in your product data feed, numbered 0 through 4.

First, you’ll need to assign a specific definition for each of the five custom labels and specify the possible values for each. Each of the five custom labels can only have one value per product. Use these custom labels consistently across all products in your Merchant Center account. So for example, let’s say our custom labels are defined as follows:

• 0 – Price Point
• 1 – Margin
• 2 – Sale
• 3 – Best Sellers
• 4 – Seasonality

Next, define your values for each of these labels based on your products and your business. You can set multiple options for each label and choose which one to apply for each product in your feed.

• 0 – Price Point – $0-50, $51-100, $101-150, $150+
• 1 – Margin – HighMargin, LowMargin
• 2 – Sale – Sale
• 3 – Best Sellers – TopSelling, PoorPerformer
• 4 – Seasonality – Winter, Spring, Summer, Fall

Then you’ll need to assign appropriate values to each product in your product data. See below for an example from Google. 

Finally, you’ll need to apply custom labels to your products in Merchant Center. Think of this as tagging each of your products with the appropriate custom label. 

Learn More: What You Need to Know About Google Merchant Center

How do I use a custom label in my Google Shopping campaign?

As I mentioned, custom labels give you the ability to create filters in your shopping campaigns. Using these filters make it really easy to look at your data in different ways. Here are some examples of the data you may want to look at while utilizing custom labels:

Product Price

A great example that we use for DermWarehouse is custom labels by product price. We like to segment our campaigns so we can bid differently based on the price of the product. We wouldn’t want to bid the same amount for a $20 as we would for a $200 product. 

Utilizing our price custom label allows us to segment our campaigns into different pricing buckets, so we can easily adjust our bids based on their price point. When we’re using Google’s automated bidding instead of manual bidding, we’ll set up different shopping campaigns for each price bucket so that we can set a different max CPC depending on the price.

Seasonality

The products we sell on DermWarehouse aren’t seasonal, but many businesses do offer seasonal products. Maybe you sell holiday items or back to school items. Using a custom label to segment your products by season will allow you to adjust your bids for anything you sell that’s specific to a certain season. 

If you’re selling holiday decorations, for example, custom labels will allow you to lower (or pause) your Christmas items while you’re focusing on July 4th. 

Profitability

If you have different profit margins for different products, this is another great way to segment. Maybe you have 20% margins on some products but 70% margins on others. You’ll want to bid higher on the products with 70% margins and bid down on the products with 20% margins. 

Performance

If you can segment products into groups based on what sells really well and what doesn’t, you can double down on those products that are hot and decrease your bids on those that aren’t.

Custom labels vs. product groups

In Google Shopping, you can create product groups within your campaigns that function the same way as custom labels. They allow you to sort your campaigns, making it easier to make decisions based on certain data points. 

The difference between custom labels and product groups is that with product groups, you’re limited to certain data points, such as Item ID, Brand, Category and Product Type. Custom labels, on the other hand, are just that – more custom – so you can sort your products by any tags and data points that you’d like.

Learn More: Google Shopping Product Type – The Rundown

In Closing

• Think of custom labels like tags that you assign to your products in Merchant Center that help you keep your Google shopping campaigns organized.
• Custom labels can include data points such as price, best sellers, seasonal products, profit margins and more. 
• You can have up to five custom labels in your product data feed, numbered 0 through 4.
• Custom labels are more comprehensive and customizable than product groups for Google shopping, but they essentially operate the same way.

Learn More about Google Shopping on our blog!