How to Use Google Shopping Custom Labels to Segment and Scale Winning Products

For e-commerce managers and store owners, uncovering which products perform best and then maximizing their visibility is crucial for profitability. Google shopping custom labels offer a way to group products by margin, seasonality, or performance tier, enabling you to bid precisely on top sellers. Rather than treating every item the same, segmentation through google shopping custom labels lets Shopify and WooCommerce merchants create targeted Shopping campaigns that align spend with ROI. In this guide, we cover everything from setting up custom labels in Merchant Center to structuring shopping campaigns with these labels, helping you elevate your google shopping management and feed optimization.

Why Google Shopping Custom Labels Matter

Google shopping custom labels act as an internal tag system invisible to shoppers but essential for advanced bidding. By applying custom labels like “HighMargin,” “TopSeller,” or “Holiday2025,” you can:

• Allocate budget toward high-profit items without overspending on slow movers

• Create dedicated ad groups for seasonal promotions or clearance stock

• Test new products at lower bids before scaling

• Streamline feed management by combining with Merchant Center rules

A google shopping management company or any in-house team aiming to maximize ROAS will find that custom labels simplify campaign organization, reduce wasted ad spend, and accelerate decision-making. Whether you’re a beginner exploring google merchant center help center resources or a seasoned Shopify merchant, custom labels become a cornerstone of effective google shopping feed management.

Understanding Custom Labels in Google Merchant Center

In your product feed, Google provides five custom label slots (custom_label_0 through custom_label_4). Each slot accepts up to 100 characters of text your defined values are never displayed to shoppers but can be used in Google Ads product group filters.

Long-tail variation example: If you run a sports apparel store, you might use:

• custom_label_0 = “TopSeller”

• custom_label_1 = “HighMargin”

• custom_label_2 = “NewArrival”

• custom_label_3 = “Spring2025”

• custom_label_4 = “Clearance”

These labels let you slice your feed according to profit margin or seasonality. A google shopping feed management workflow might assign “HighMargin” to products with at least a 40% markup, while “Clearance” tags older inventory. This approach helps you build a shopping campaign that bids higher on items tagged “TopSeller” and lower on “Clearance,” improving overall campaign efficiency.

Setting Up Custom Labels in Your Product Feed

Follow these steps to add google shopping custom labels to your Shopify or WooCommerce feed.

Identify Your Segmentation Criteria

Before modifying your feed, decide how you want to group products:

• Top performers or best-selling SKUs

• Profitability tiers (HighMargin, MediumMargin, LowMargin)

• Product lifecycle stage (NewArrival, Clearance)

• Seasonal campaigns (Spring2025, Holiday2025)

• Testing labels (BetaSKU, TestGroup)

Clear definitions such as setting “HighMargin” for products with at least 30% profit ensure consistency across your feed.

Configure Custom Labels in Shopify

1. Install a Feed Management App: Use Shopify’s native Google Channel or a third-party app like “DataFeedWatch” that supports custom_label fields.

2. Access Feed Template: In your app’s settings, locate the section for custom labels (custom_label_0 through custom_label_4).

3. Assign Values: For each product, input the desired label. For instance, set custom_label_0=TopSeller for your five best-selling SKUs. You can also use Shopify tags or metafields some feed apps let you map metafields directly to custom_label fields.

4. Submit to Merchant Center: After updating, resubmit the feed. Merchant Center will process your custom labels along with all other attributes.

Configure Custom Labels in WooCommerce

1. Install a Feed Plugin: Use “Product Feed PRO for WooCommerce” or “WooCommerce Google Feed Manager” to enable custom_label fields.

2. Map Attributes: In the plugin settings, map your chosen rules. For example:

   • If margin ≥ 30%, assign custom_label_0=HighMargin

   • If SKU starts with “NS,” assign custom_label_2=NewArrival

   • If stock quantity < 5, assign custom_label_4=Clearance

3. Generate and Export Feed: Once labels populate, generate the feed and upload it to Merchant Center.

Verify Custom Labels in Google Merchant Center

1. Review Feed Diagnostics: Go to Merchant Center > Products > Feeds. Check for any custom_label errors or warnings.

2. Inspect Sample Products: Click into a few products to confirm custom_label fields show the correct values.

3. Fix Inconsistencies: If any products lack labels or display unexpected values, adjust feed rules or product data accordingly.

Proper setup ensures your google shopping feed management process is ready for precise segmentation in Google Ads.

Building Campaigns and Ad Groups by Custom Labels

With labels live in Merchant Center, structure your Google Shopping campaigns to leverage them fully.

Segmenting Products in Google Ads

1. Create a Shopping Campaign: In Google Ads, navigate to Campaigns > New Campaign > Shopping. Link to the Merchant Center account containing your labels.

2. Subdivide by Custom Label: Within the Ad group’s “Product Groups” section, click the plus icon to subdivide by “Custom label 0” (and so on). Google will list all custom_label_0 values select each segment to create separate product groups.

3. Adjust Bids by Segment: For products tagged “TopSeller,” assign a higher max CPC bid (e.g., $1.50). For “LowMargin” or “Clearance,” set lower bids (e.g., $0.50).

4. Monitor Performance: After a week, analyze metrics ROAS, click-through rate, and conversion rate for each custom label segment. Increase or decrease bids based on data.

Example: Scaling Winning Products

Imagine you have the following segments:

• custom_label_0 = TopSeller (5 products)

• custom_label_0 = HighMargin (20 products)

• custom_label_0 = Clearance (15 products)

In Google Ads:

• Create separate product groups for “TopSeller,” “HighMargin,” and “Clearance.”

• Assign a bid of $1.50 to the “TopSeller” group, $1.00 to “HighMargin,” and $0.40 to “Clearance.”

Because TopSeller items historically drive the highest ROAS, the larger bid increases their exposure. Meanwhile, listing Clearance items at a low bid prevents budget waste. Over time, if a “HighMargin” SKU jumps in performance, you can relabel it as “TopSeller” and scale spend accordingly. This dynamic approach aligns with best practices for google shopping management by focusing budget on what works.

Best Practices for Google Shopping Custom Label Feed Management

Implement these guidelines to keep your segments clean and actionable:

• Use no more than five labels: Merchant Center allows up to five custom_label_x fields. Reserve each label for a specific purpose margin, lifecycle, seasonality, or testing.

• Maintain consistent naming conventions: Use exact casing and avoid spaces or special characters (e.g., HighMargin rather than “high margin”). Consistency prevents mismatches when filtering in Google Ads.

• Update labels regularly: As products sell through or margins shift, revise custom labels weekly. Seasonal labels like “Holiday2025” should be removed after the holiday ends to avoid outdated segmentation.

• Combine labels with other filters: You can further refine product groups using brand or price filters alongside custom labels. For example, within custom_label_0=HighMargin, create subgroups for price brackets.

• Automate rule-based labeling: If you have hundreds of SKUs, use feed rules or automated scripts to assign labels based on cost, inventory, or product tags. This reduces manual errors and keeps your feed scalable.

A google shopping feed management plan that follows these practices ensures efficient segmentation and more precise bidding.

Measuring Success and Iterating

Tracking performance of each custom label segment is vital for ongoing optimization:

• ROAS by Custom Label: In Google Ads, build a custom report showing revenue and cost per custom label. Labels with low ROAS may need bid adjustments or removal.

• Conversion Rate Comparison: Compare conversion rates across segments e.g., do “HighMargin” products convert at 3.5% versus 2% for “MidMargin”? Use these insights to reassign labels.

• Impression Share Analysis: If “TopSeller” products have low Impression Share, consider increasing bids or budget to capture more traffic.

• Cost per Acquisition (CPA): Products tagged “Clearance” should ideally have a low CPA if your goal is to clear inventory; if not, adjust bids down.

Regularly revisit your google shopping custom labels strategy every two weeks. As product performance shifts new seasonal trends or inventory changes update labels and bids to stay aligned with business goals.

Common Pitfalls and How to Avoid Them

• Over-segmenting the feed: Creating too many narrow labels (e.g., “HighMargin_Red_Small” and “HighMargin_Red_Medium”) can spread budget thin. Focus on broader categories like “HighMargin” or “TopSeller.”

• Missing labels on new products: Any product without a custom label falls into a catch-all group, making it hard to control bids. Always assign a default label (e.g., “Standard”) if no other criteria apply.

• Inconsistent label application: If your feed rules or manual entries are inconsistent, campaign filters may not match. Test a handful of SKUs after each feed update to confirm correct labeling.

• Ignoring seasonality: Forgetting to remove seasonal labels after the period ends can lead to wasted spend on out-of-season items. Schedule reminders to update or delete “Spring2025” or “Holiday2025” tags once the season passes.

Avoiding these mistakes keeps your google shopping management company or in-house team on track for steady growth.

Conclusion

Implementing google shopping custom labels transforms how you manage and scale winning products. By structuring your feed around profitability, seasonality, and performance, you can bid more strategically, reduce wasted spend, and focus budgets on top-performing items. Whether you run a Shopify or WooCommerce store, these labels offer unmatched control over your Google Shopping campaigns.

Start tagging products today, monitor results closely, and continuously refine labels to maintain a competitive edge in the ever-evolving e-commerce landscape.

Contact us at Flomaticx - Your Google Ads Performance Partner!

Frequently Asked Questions

How do I set up Google Shopping custom labels?

To set up custom labels, add columns named custom_label_0 through custom_label_4 in your product feed CSV, XML, or use a feed management app. Assign each product a value such as “HighMargin” or “TopSeller.” Then upload or refresh the feed in Google Merchant Center.

What are best practices for naming custom label values?

Use consistent, case-sensitive names without spaces or special characters. For example, use “HighMargin” rather than “high margin.” Standardizing labels ensures Google Ads filters recognize them correctly.

Can I apply multiple custom labels to a single product?

Yes. Merchant Center allows up to five custom_label slots per product. For instance, you could use custom_label_0=TopSeller and custom_label_1=Holiday2025. Each label serves a different segmentation purpose.

How often should I update custom labels?

Review and update labels at least every two weeks. As products sell out or margins change, relabel SKUs to keep your segments accurate. Remove seasonal labels like “Spring2025” once the season ends to avoid outdated bids.

Will custom labels affect how my products appear to shoppers?

No. Custom labels exist only for internal campaign segmentation and bidding strategies. They are not visible to shoppers on Google Shopping.