Custom Labels: The Secret Weapon Hiding in Your Merchant Center Feed
When running Google Shopping or Performance Max campaigns, you have countless ways to segment, optimize, and scale your product advertising. But one of the most powerful and often underutilized tools in your Merchant Center feed is the custom label.
If you’re not using custom labels, you might be missing out on a level of control that can significantly improve campaign efficiency and profitability. Here’s why they matter and how they can improve your campaigns to become more strategic and higher-performing.
What Are Custom Labels?
Custom labels are optional attributes (numbered 0–4) that you can assign to your products in the Merchant Center product feed. Unlike required attributes like title or price, custom labels are entirely flexible. You decide what goes in them based on your business goals, reporting needs or any other organizational method that makes you happy.
These labels are not public and will not be seen outside of Merchant Center and Google Ads; they’re purely for structuring campaigns, adjusting bids, and analyzing performance in Google Ads.
The beauty of custom labels is that you can use the same label setup across Google Shopping and Performance Max campaigns, but apply them differently.
Why Custom Labels Matter in Google Shopping
Google Shopping campaigns rely heavily on your product feed. Without strong organization, all products can end up in one catch-all campaign, making it difficult to allocate budget or adjust bids strategically. Even worse, you may end up with product overlap across several campaigns which will muddy the performance data and your ability to analyze and optimize.
Custom labels solve this problem by letting you:
- Segment products for bidding
Example: Increase bids on high-margin products, reduce bids on clearance items.
- Prioritize seasonal items
Example: Boost holiday-specific products during November and December without rebuilding your whole campaign.
- Control spend more efficiently
Example: Put best-selling SKUs in a separate campaign with more aggressive bidding while keeping slower sellers in a low-spend campaign.
- Test and optimize faster
Example: Compare performance between “New Arrivals” vs. “Evergreen” products to inform future buying and merchandising.
Why Custom Labels Are Even More Important in Performance Max
Performance Max campaigns are built for automation, but that automation still needs smart inputs. Because PMax blends Shopping, Search, Display, YouTube, and more into a single campaign, it’s easy for budgets to be distributed unevenly or for important products to get buried.
Custom labels help you guide Google’s automation by:
- Structuring Asset Groups
Group products by profitability, seasonality, or inventory status so ad creative and targeting are more tailored.
- Feeding better signals
Google’s algorithm works better when it knows which products deserve higher exposure.
- Refining budget allocation
You can set separate campaigns or asset groups for high-value vs. low-value products, preventing wasted spend.
Best Practices for Using Custom Labels
- Keep labels consistent
Use clear, standardized naming so reporting stays clean.
- Use all five slots wisely
You only get labels 0–4, so prioritize the attributes most critical to your business goals.
- Think beyond marketing
Work with your merchandising and finance teams to identify product attributes that impact profitability.
- Review and refresh regularly
Update labels for seasonality, inventory changes, and new launches.
Example: Custom Label Strategy for an eCommerce Store
Custom Label
Theme
Example Values
Purpose
The Bottom Line
Custom labels are like a secret organizational layer in your product feed. They don’t just make your Google Shopping and Performance Max campaigns easier to manage, they make them smarter, more strategic, and more profitable. By keeping your label framework consistent, you can also streamline reporting, improve optimization speed, and ensure your budget is always pushing your most valuable products.
If you’re serious about scaling eCommerce campaigns, invest the time in building a thoughtful custom label strategy. A little extra work in your feed today could unlock significantly better ROI tomorrow.
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