Custom Labels for Google Shopping: Ideas That Improve Shopping Ads

What custom labels are

Your product feed tells Google what you sell through attributes, the named fields in the feed such as title, price, brand and category. It doesn’t say which products make you money, which ones sell every day, or which ones you need to clear before spring. Google Shopping custom labels fill that gap.

There are five of them, custom_label_0 to custom_label_4. You decide what each one means and which values it holds. Google says you can use them to group products for reporting and bidding in Performance Max, Shopping and Demand Gen campaigns (Merchant Center Help). The values are for you only. They won’t be shown to customers.

Here is why that matters. Without labels, you can only split campaigns by things in the feed, such as brand or category. A $20 phone case with a high margin and a $20 cable with a thin one look the same to Google. With a margin label, you can put them in different product groups and treat them differently. The labels don’t change your ads. They change how much control you have.

The rules: limits and format

Google’s custom label page sets these limits:

• Five labels per product, numbered 0 to 4. All are optional. A product can use only label 0, or labels 0, 2 and 4.
• One value per label per product. A product is either “best seller” or “low seller” in its selling-rate label, never both.
• 1 to 100 characters per value. Google recommends ASCII characters only.
• Values aren’t case sensitive. “Summer” and “summer” count as the same value.
• Up to 1,000 unique values per label across your whole account, and 5,000 across all five.

The last rule is the one that bites. If a label goes over 1,000 unique values, Google ignores the extra values for reporting and bidding, and treats those products as if the label wasn’t set. Nothing breaks loudly. Products just fall into the wrong group. To fix it, reduce the number of values and resubmit your product data.

In a feed file, a label is just another column. In XML it looks like <g:custom_label_0>summer</g:custom_label_0>.

One more limit: labels work for Performance Max, Shopping and Demand Gen only. For Display ads with dynamic remarketing, Google points you to the ads_labels and ads_grouping attributes instead.

Custom label ideas

A good label answers one question: “Would I spend differently on these products?” If the answer is no, the label only adds work. Google’s own example plan uses season, selling rate, price range, margin and release year (Merchant Center Help). Here is what each one is good for, plus two more.

Profit margin

Two products with the same price can earn very different profit. A margin label, for example high margin, medium margin and low margin, lets you set a higher return target, or a smaller budget, on low-margin items. You need cost prices for this, which your feed doesn’t contain but your store admin or accounting software does.

Best sellers and slow sellers

A selling-rate label splits the catalog by how well products sell, for example best seller and low seller. Use your own sales data, such as units sold in the last 90 days. Recalculate it on a schedule, because a best seller in December may not be one in March.

Price range

Price bands like 0-25, 25-50, 50-100 and 100+ help when cheap and expensive products need different cost-per-click levels. Decide where the edges go: in this guide, and in our label builder, each band includes its lower number, so a $25 product is in 25-50. Keep the bands wide. A label holding exact prices would soon pass 1,000 values.

Season

Values such as winter, summer or all-year let you push seasonal products in season and hold back spend outside it, without pausing products one by one.

Sale and clearance

A label like on sale or clearance lets you give discounted stock its own budget, or keep it apart so a clearance push doesn’t change the targets of your full-price products.

New arrivals or release year

New products have no sales history yet, so they are hard to judge inside a group of proven sellers. Google’s example uses release year. A simpler new and core split lets you watch new products as a group and give them their own budget if you want them seen. Remove the new value after a few weeks.

Hero products

Some stores have a handful of products they always want visible: the item in the TV spot, the product the brand is known for. A hero label lets you give them their own campaign or asset group.

Whatever you pick, use short, lowercase values and write them down. “best seller”, “best-seller” and “bestseller” mean the same to a person but are three different values to Google, and a team will drift between them.

Plan your five labels

Before you add a single value, decide what each label means. Google’s advice is to choose your own definition for each of the five labels (Merchant Center Help). The definition isn’t entered anywhere in Merchant Center or Google Ads, so keep it in a shared document.

A plan for a typical online store might look like this:

Label	Meaning	Values
custom_label_0	Price range	0-25, 25-50, 50-100, 100+
custom_label_1	Margin	high margin, medium margin, low margin
custom_label_2	Selling rate	best seller, low seller
custom_label_3	Promotion	on sale, clearance, full price
custom_label_4	Season	winter, summer, all-year

Two rules keep the plan useful. Keep one meaning per label for every product, so custom_label_1 is always margin, never margin for some products and season for others. And keep the number of values small. Each extra value is another product group to manage.

Three ways to add custom labels

### 1. In your main product feed

If you build the feed yourself, add the label columns to it. Shopify’s product CSV already has columns named Google Shopping / Custom Label 0 to 4. Shopify notes that an app may use these columns to sync products to Merchant Center, and that its own Google & YouTube channel doesn’t use them (Shopify Help). The product feed converter for Shopify carries those columns into a Merchant Center feed along with prices, variants and stock.

This works well for labels that rarely change, such as season or hero products. It is clumsy for labels that change often, like best sellers, because you would rebuild the whole feed each time.

2. With a supplemental data source

A supplemental data source is a small extra file that adds or updates attributes of products already in your primary feed. It can’t add or remove products, and it can’t be used on its own (Create a product data source). That makes it ideal for labels: your main feed stays untouched, and you replace the label file whenever sales or margins change.

The file only needs an id column and one column per label. In this example the columns are separated by tabs, not spaces:

id	custom_label_0	custom_label_1
12345-R	50-100	high margin

The id must match the id in your primary data source exactly. Google warns that IDs differing only by capitals can be confused, so never use case to tell products apart (ID attribute). The supplemental feed builder for Google Merchant Center creates this file from a product list: it sets price bands, margin bands and best sellers from your columns and keeps every label within Google’s 100-character and 1,000-value limits.

To add it in Merchant Center:

1. Turn on the Advanced data source management add-on under Settings › Add-ons. Without it, the supplemental tab is hidden.
2. Go to Settings › Data sources › Supplemental sources › Add supplemental product data.
3. Choose a file, a Google Sheets template or the API.
4. Enter the file name, then the data source label (feed label) and language. Both must match your primary data source.
5. Select the primary data source it should update, and create the data source.

A Google Sheet is handy when someone on the team updates labels by hand. A file on a schedule suits labels you recalculate every week.

3. With attribute rules

If the label can be worked out from data already in your feed, a rule can do it. Google suggests using rules to assign custom labels automatically from values you already submit, and its example price bands are 0-5, 5-10, 10-20 and 20+ (Merchant Center Help). You set rules up per attribute, and they stay as drafts until you click Apply changes (attribute rules).

Rules can’t see what isn’t in the feed, though. Margin and sales rank come from your own systems, so those labels need a supplemental source.

Using labels in Shopping and Performance Max

Google says new or edited labels can take 24 to 48 hours to appear in Google Ads (Google Ads Help). Wait before you build groups on them.

Standard Shopping campaigns

In a Shopping campaign, click + next to a product group, such as All products, and choose Custom labels in the Subdivide by list. Tick the values you want and continue to set bids (Manage product groups). You can subdivide up to 7 levels deep, and an ad group can hold up to 5,000 product groups. You can set a bid on each group that isn’t subdivided further, or exclude it.

Google also notes that changes in your data source aren’t applied to product groups automatically. If you add a new value, say clearance, you have to add it to your product groups yourself.

Performance Max

In Performance Max, labels work through listing groups inside each asset group. Go to Asset groups › Listing groups, click the pencil next to All products, choose Custom labels under Subdivide by, tick the values and save (Manage listing groups).

There are no bids per listing group. Google sets bids from the campaign’s goal. So the useful moves are different: include or exclude label groups, put each label group in its own asset group, or split campaigns by label so that, for example, high-margin products get their own budget and target. Google allows up to 1,000 listing groups per asset group, but warns that a very large number isn’t a best practice.

Mistakes that break custom labels

• Too many values. Product IDs, exact prices or SKU names in a label quickly pass 1,000 unique values. The extra values are then ignored for bidding and reporting.
• IDs that don’t match. If the supplemental file uses a different id, extra spaces or a different feed label, the labels join to nothing. Compare a few ids with your primary feed before you upload.
• Labels that change meaning. If custom_label_2 is margin in one file and season in the next, every report and product group built on it is wrong.
• Stale labels. A best-seller label that was set once and never updated sends budget to last season’s winners. Put the recalculation on a calendar.
• New values missing from product groups. In Shopping campaigns, new label values don’t appear in your product groups by themselves. Check the groups after each label change.
• Judging too early. Labels need up to 48 hours to reach Google Ads, and any campaign change needs time before the data means anything.

Start with one or two labels you would actually act on, usually margin and selling rate. Add more only when you have a plan for them. If your main feed still has errors, fix those first with the guide to common Merchant Center feed errors: a label on a disapproved product does nothing.