Google Shopping Custom Labels: How to Use for Strategic Bidding and Segmentation

Custom labels are powerful tools for Google Shopping optimization. Strategic use of custom labels can improve ROI by 20-35% through better segmentation and bidding. This comprehensive guide covers how to use custom labels effectively.

Why Custom Labels Matter

Custom labels enable:

• Strategic Segmentation - Group products by your criteria
• Bid Management - Different bids per segment
• Performance Analysis - Analyze by custom segments
• Budget Allocation - Focus spend strategically
• Optimization - Target optimizations per segment

Understanding Custom Labels

What Are Custom Labels?

Custom labels are custom attributes you add to products:

• Up to 5 custom labels per product
• Use for any segmentation need
• Flexible grouping options
• Strategic organization

Custom Label Types

Custom Label 0-4:

• Five separate label fields
• Use for different purposes
• Combine for complex segmentation
• Flexible structure

Best Practices:

• Label 0: Primary segmentation (e.g., performance)
• Label 1: Secondary (e.g., margin)
• Label 2: Tertiary (e.g., seasonality)
• Label 3-4: Additional needs

Custom Label Strategies

Strategy 1: Performance-Based Labels

Approach: Label products by performance

Structure:

• “High Performer” - High ROAS, low CPA
• “Medium Performer” - Average performance
• “Low Performer” - Low ROAS, high CPA
• “New Product” - Recently added

How to Use:

1. Analyze product performance
2. Assign labels based on metrics
3. Create product groups by label
4. Set different bids per group
5. Update regularly

Benefits:

• Higher bids for winners
• Lower bids for losers
• Better budget allocation
• Improved ROI

Strategy 2: Profitability-Based Labels

Approach: Label products by profit margin

Structure:

• “High Margin” - 40%+ margin
• “Medium Margin” - 20-40% margin
• “Low Margin” - Under 20% margin
• “Loss Leader” - Negative margin

How to Use:

1. Calculate profit margins
2. Assign labels accordingly
3. Create groups by margin
4. Set bids based on profitability
5. Optimize continuously

Benefits:

• Maximizes profitability
• Protects margins
• Better budget use
• Higher ROI

Strategy 3: Seasonality Labels

Approach: Label products by seasonal relevance

Structure:

• “Current Season” - In season now
• “Off Season” - Out of season
• “Year Round” - Always relevant
• “Holiday” - Holiday-specific

How to Use:

1. Identify seasonal patterns
2. Assign seasonal labels
3. Create seasonal groups
4. Adjust bids seasonally
5. Update regularly

Benefits:

• Seasonal optimization
• Better budget allocation
• Improved performance
• Higher ROI during seasons

Strategy 4: Brand Tier Labels

Approach: Label products by brand tier

Structure:

• “Premium Brand” - High-end brands
• “Mid Tier” - Mid-range brands
• “Value Brand” - Budget brands
• “Private Label” - Own brand

How to Use:

1. Categorize brands
2. Assign tier labels
3. Create brand tier groups
4. Set tier-specific bids
5. Monitor performance

Benefits:

• Brand-specific strategies
• Better management
• Easier optimization
• Performance insights

Strategy 5: Inventory Labels

Approach: Label products by inventory status

Structure:

• “High Stock” - Well stocked
• “Low Stock” - Limited inventory
• “Out of Stock” - No inventory
• “Clearance” - Clearing inventory

How to Use:

1. Monitor inventory levels
2. Assign inventory labels
3. Create inventory groups
4. Adjust bids by inventory
5. Update regularly

Benefits:

• Inventory management
• Better budget allocation
• Prevents overselling
• Optimized spend

Advanced Custom Label Strategies

Strategy 1: Multi-Dimensional Labels

Approach: Combine multiple label types

Example:

• Label 0: Performance (High/Medium/Low)
• Label 1: Margin (High/Medium/Low)
• Label 2: Seasonality (Current/Off/Year Round)

Benefits:

• Complex segmentation
• Precise grouping
• Better optimization
• Higher efficiency

Strategy 2: Dynamic Labels

Approach: Automatically update labels based on performance

Process:

1. Set performance thresholds
2. Automatically assign labels
3. Update regularly
4. Adjust bids automatically
5. Monitor results

Benefits:

• Always current
• Saves time
• Better optimization
• Improved performance

Using Custom Labels for Bidding

Bid Strategy by Label

High Performers:

• Increase bids
• Maximize visibility
• Scale winners
• Higher investment

Low Performers:

• Decrease bids
• Reduce spend
• Optimize or pause
• Lower investment

High Margin:

• Higher bids acceptable
• Maximize profitability
• Focus budget
• Better ROI

Low Margin:

• Lower bids needed
• Protect margins
• Careful management
• Efficiency focus

Creating Product Groups by Labels

Process:

1. Create groups by custom label
2. Set different bids per group
3. Monitor group performance
4. Adjust bids accordingly
5. Refine structure

Example Structure:

• High Performer + High Margin
• High Performer + Medium Margin
• Medium Performer + High Margin
• And so on…

Custom Label Best Practices

Label Organization

Consistent Naming:

• Use clear, consistent names
• Document label meanings
• Standardize across catalog
• Easy to understand

Label Hierarchy:

• Primary label for main segmentation
• Secondary for additional needs
• Tertiary for specific purposes
• Logical structure

Label Maintenance

Regular Updates:

• Update based on performance
• Adjust for seasonality
• Reflect inventory changes
• Keep current

Documentation:

• Document label meanings
• Track label assignments
• Note changes
• Maintain records

Common Custom Label Mistakes

Mistake 1: Not Using Labels

Problem: Missing segmentation opportunities Solution: Implement custom labels Impact: 20-30% missed optimization

Mistake 2: Inconsistent Labels

Problem: Confusing segmentation Solution: Standardize labeling Impact: 15-20% management issues

Mistake 3: Not Updating Labels

Problem: Outdated segmentation Solution: Regular label updates Impact: 10-15% performance loss

Mistake 4: Too Many Labels

Problem: Over-complication Solution: Focus on key segments Impact: 10-15% efficiency loss

Measuring Custom Label Performance

Key Metrics

ROAS by Label:

• Revenue per dollar by label
• Compare label performance
• Identify winners

CPA by Label:

• Cost per acquisition by label
• Compare efficiency
• Optimize accordingly

Conversion Rate:

• Conversions per click by label
• Identify high converters
• Optimize low converters

Revenue Share:

• Percentage of revenue per label
• Focus on high revenue labels
• Optimize low revenue labels

Best Practices

1. Start Simple - Begin with key segments
2. Be Consistent - Standardize labeling
3. Update Regularly - Keep labels current
4. Use for Bidding - Different bids per label
5. Monitor Performance - Track by label
6. Document - Maintain label definitions
7. Test - Try different label strategies
8. Iterate - Continuous improvement

Conclusion

Custom labels are powerful tools for Google Shopping optimization. By strategically labeling products, creating groups, and optimizing bids, you can significantly improve your campaign performance and ROI.

Remember that custom label optimization is an ongoing process. Regular updates, performance monitoring, and strategic refinement are essential for maintaining and improving performance.

Automate Custom Label Management with AI Shopping Feeds

Manually assigning and managing custom labels for thousands of products is time-consuming. AI Shopping Feeds can help automate custom label assignment based on product performance and attributes.

How AI Shopping Feeds Helps with Custom Labels

Performance-Based Labels:

• Automatically identifies high performers
• Assigns performance labels
• Updates based on data
• Saves time on manual assignment

Attribute-Based Labels:

• Uses product attributes for labeling
• Creates consistent labels
• Maintains accuracy
• Reduces manual work

Label Organization:

• Consistent label structure
• Standardized naming
• Easy to manage
• Better organization

Time Savings:

• Automated label assignment
• Reduced manual work
• Faster updates
• More time for optimization

Get Started Today

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