Custom Labels for Shopping Campaigns: Segment, Bid, and Win

Custom labels are one of the most powerful—and underutilized—features in product feed management. These five flexible fields (custom_label_0 through custom_label_4) let you add any information you want to your products, enabling sophisticated campaign segmentation that isn't possible with standard attributes.

Want to bid differently on high-margin versus low-margin products? Custom labels make it possible. Need to identify seasonal items for promotion during peak periods? Custom labels handle that. Looking to exclude slow-moving inventory from campaigns? Custom labels again.

This guide covers everything you need to know about using custom labels to improve your shopping campaign performance.

What Are Custom Labels?

Definition

Custom labels are five optional attributes (custom_label_0, custom_label_1, custom_label_2, custom_label_3, custom_label_4) that you can add to your product feed. Each can contain any text value up to 100 characters.

Key Characteristics

• Flexible: You define what each label means
• Not visible to shoppers: Used only for campaign management
• Enables segmentation: Create product groups based on any criteria
• Five available: You can use all five simultaneously

How They're Used

Custom labels enable you to:

• Create product groups in shopping campaigns
• Set different bids for different product segments
• Include or exclude products from specific campaigns
• Generate reports by product segment
• Apply automated rules based on product characteristics

Strategic Custom Label Categories

Margin-Based Labels

Why Margin Matters

Not all sales are equally profitable. A $100 sale on a 50% margin product is worth $50 in gross profit. A $100 sale on a 10% margin product is worth $10. Your bidding should reflect this.

Implementation

Label products by margin tier:

• high_margin: Products with margins above 40%
• medium_margin: Products with margins 20-40%
• low_margin: Products with margins below 20%

Campaign Strategy

• Bid more aggressively on high-margin products
• Set lower target ROAS for high-margin items (can afford lower return)
• Potentially exclude very low margin items from paid campaigns

Performance-Based Labels

Why Performance Matters

Historical data shows which products convert well and which don't. Use this data to inform bidding.

Implementation

Segment by historical performance:

• best_seller: Top 10% by revenue or conversion rate
• good_performer: Above-average performance
• average: Middle of the pack
• underperformer: Below-average conversion rate
• new: Not enough data yet

Campaign Strategy

• Increase bids on best sellers—they've proven they convert
• Test new products with moderate bids
• Reduce bids or exclude chronic underperformers

Seasonality Labels

Why Seasonality Matters

Demand for many products fluctuates throughout the year. Adjust your strategy accordingly.

Implementation

• holiday: Christmas, Thanksgiving, etc.
• summer: Summer-specific products
• winter: Cold-weather items
• back_to_school: School-related products
• evergreen: Year-round demand

Campaign Strategy

• Increase bids on seasonal items during their peak
• Reduce or pause seasonal items in off-season
• Create seasonal campaigns for easy budget control

Price Point Labels

Why Price Points Matter

Bidding strategies may differ for luxury versus budget products. High-ticket items may justify higher CPCs.

Implementation

• premium: High-priced items ($500+)
• mid_range: Moderate prices ($100-500)
• budget: Lower-priced items (under $100)
• impulse: Very low price, impulse purchases

Campaign Strategy

• Higher CPCs may be acceptable for premium items
• Budget items may need lower CPCs to maintain profitability
• Different messaging strategies by price segment

Inventory Status Labels

Why Inventory Matters

Stock levels should influence advertising decisions.

Implementation

• overstocked: Too much inventory, push harder
• normal: Healthy stock levels
• low_stock: Limited inventory, reduce promotion
• clearance: End of life, need to move

Campaign Strategy

• Increase bids on overstocked items to move inventory
• Reduce bids on low-stock items to preserve inventory
• Create clearance campaigns for end-of-life products

Promotional Labels

Implementation

• on_sale: Currently discounted
• new_arrival: Recently added
• featured: Marketing focus
• limited_edition: Special releases

Campaign Strategy

• Create sale-specific campaigns during promotions
• Push new arrivals with dedicated campaigns
• Feature products in broader marketing efforts

Custom Label Implementation

Planning Your Label Strategy

Step 1: Identify Your Needs

Consider your business goals and campaign strategies:

• What product characteristics should influence bidding?
• How do you want to segment reporting?
• What automated rules would be useful?

Step 2: Prioritize Labels

You have five labels. Prioritize based on impact:

1. custom_label_0: Most important segmentation (often margin or performance)
2. custom_label_1: Second priority (often seasonality)
3. custom_label_2: Third priority
4. custom_label_3: Fourth priority
5. custom_label_4: Fifth priority

Step 3: Define Values

For each label, define the possible values and criteria for assignment:

• Keep values simple and consistent
• Use lowercase_with_underscores for clarity
• Document what each value means

Adding Labels to Your Feed

Manual Assignment

For small catalogs, manually assign labels:

• Add custom_label columns to your spreadsheet
• Enter values for each product
• Update as needed

Rule-Based Assignment

For larger catalogs, create rules to assign labels automatically:

Example margin rule:

IF margin > 40% THEN custom_label_0 = "high_margin"
IF margin BETWEEN 20% AND 40% THEN custom_label_0 = "medium_margin"
IF margin < 20% THEN custom_label_0 = "low_margin"

Example category rule:

IF category CONTAINS "swimwear" THEN custom_label_1 = "summer"
IF category CONTAINS "jacket" OR "coat" THEN custom_label_1 = "winter"

Data Integration

Pull label values from business systems:

• Margin data from ERP or accounting
• Performance data from analytics
• Inventory data from warehouse management
• Promotional status from marketing calendar

Supplemental Feeds for Labels

Custom labels are ideal for supplemental feeds because:

• Labels change more frequently than core product data
• Can be managed separately from primary feed
• Easy to update from external data sources

Supplemental Feed Structure

Simple two-column format:

id,custom_label_0
SKU-001,high_margin
SKU-002,medium_margin
SKU-003,low_margin

Using Custom Labels in Campaigns

Google Ads Product Groups

Creating Label-Based Product Groups

1. In your Shopping campaign, go to Product Groups
2. Subdivide by Custom Label
3. Choose the label number (0-4)
4. Select the values you want to group

Campaign Structure Options

Option 1: Single Campaign, Multiple Ad Groups

• One ad group per label value
• Different bids per ad group
• Shared budget across all

Option 2: Separate Campaigns by Label

• Campaign for high-margin products
• Campaign for medium-margin products
• Campaign for low-margin products
• Independent budgets and settings

Bid Adjustments

Set different bids based on custom labels:

• high_margin: Base bid $1.00
• medium_margin: Base bid $0.60
• low_margin: Base bid $0.30

Performance Max Asset Groups

In Performance Max campaigns:

• Create asset groups based on custom labels
• Different creative assets per segment
• Let Google optimize within segments

Meta Product Sets

In Meta Commerce Manager:

1. Go to Catalog > Sets
2. Create new product set
3. Add filter for custom label
4. Use product set in ad campaigns

Advanced Custom Label Strategies

Combining Multiple Labels

Use multiple labels together for sophisticated segmentation:

Example: High-margin + Best seller = maximum bid

Example: Low-margin + Underperformer = exclude from campaigns

Implementation

• Create combined product groups in campaigns
• Use AND logic to narrow targeting
• Build matrix of bid adjustments

Dynamic Label Updates

Update labels based on real-time data:

Inventory-Based Updates

• Stock drops below threshold: Change to "low_stock"
• Stock replenished: Change back to "normal"
• Excess inventory: Change to "overstocked"

Performance-Based Updates

• Product becomes best seller: Update label
• Conversion rate drops: Downgrade label
• New products mature: Update from "new" to performance tier

Testing with Custom Labels

Use labels for A/B testing:

Title Testing

• Label half of products as "test_title_a"
• Label other half as "test_title_b"
• Apply different titles via supplemental feed
• Compare performance

Bid Strategy Testing

• Segment similar products with different labels
• Apply different bid strategies to each
• Measure results

Reporting with Custom Labels

Performance Analysis

Use labels to analyze performance by segment:

• Which margin tier performs best?
• How do seasonal products perform vs. evergreen?
• What's the ROI by price point?

Building Reports

Google Ads

1. Go to Reports
2. Create custom report
3. Add Shopping dimension for custom labels
4. View metrics by label value

Google Analytics

• Import custom label data via data import
• Create custom dimensions for labels
• Build reports segmented by label

Common Custom Label Mistakes

Too Many Values

Problem: Creating dozens of values per label makes campaign management unwieldy.

Solution: Limit to 5-10 values per label. Group similar items together.

Inconsistent Naming

Problem: "High Margin," "high_margin," and "HighMargin" are treated as different values.

Solution: Standardize naming conventions. Use lowercase with underscores.

Static Labels

Problem: Labels set once and never updated become stale.

Solution: Automate label updates based on current data.

Unused Labels

Problem: Adding labels but not using them in campaigns.

Solution: Only add labels you'll actively use for segmentation or reporting.

Over-Segmentation

Problem: Creating too many small segments that don't have enough data for optimization.

Solution: Ensure each segment has sufficient volume for statistical significance.

Custom Label Maintenance

Regular Reviews

• Weekly: Check labels are populating correctly
• Monthly: Review label performance and adjust strategies
• Quarterly: Evaluate if label categories still make sense

Documentation

Maintain documentation of:

• What each label represents
• What values are used and their meaning
• How labels are assigned (rules or manual)
• Who owns label management

Automation

Automate where possible:

• Label assignment based on rules
• Updates based on data changes
• Alerts when label distribution changes significantly

Conclusion

Custom labels transform your product feed from a static data source into a dynamic tool for campaign optimization. By segmenting products based on margin, performance, seasonality, and other business-relevant criteria, you can bid smarter, allocate budget better, and improve overall campaign performance.

Start with one or two high-impact label categories—margin and performance are usually the best starting points. Build your infrastructure for label management, then expand to additional categories as you see results.

GetFeeder makes custom label management easy with rule-based assignment, data integration, and automated updates. Our platform helps you maintain accurate, actionable labels across your entire catalog.