Google allows you to create up to five custom labels in your product feed, from 0 to 4. For each product, each of those labels can only have one value. Good practice is to use them consistently using the same five labels across your Merchant Center account.
Your custom labels might look like the following example. Each label has a specific definition, supported by a range of possible values.
Let’s say for example you sell camping and outdoor equipment. Whole ranges of products will sell better in summer, and others during the winter months. With this in mind you can add season-specific labels to your products to increase bids when they’re in-season and reduce the bids when there’s less demand.
This is particularly important for retailers with both low-price and high-ticket items. To maintain a high ROAS, your maximum CPC for lower priced items needs to be much lower than that of the higher cost items.
Although Google does not allow you to segment your products by price, custom labels will allow you to manage your bids by a generic price range. For example, you would be able to allocate a maximum CPC of 50¢ to all your products under $50, whilst products $51-100 are allocated a maximum CPC of $1.
You may find setting out your bids more straightforward by segregating your products by performance. This way you can focus more budget on best-selling products, and save on less frequently purchased items.
Similar to segmenting by price point, you use this label to separate products based on the profit margin. While you may sell two different items for the same price, they might have considerably different profit margins.
In order to bid more accurately, you may find it helps to separate your high-margin products from your low-margin products.
It’s also possible to divide up your inventory by their promotional status, assigning a ‘clearance’ value for items on sale. This allows you to focus your marketing strategy on items you’re possibly looking to sell fast to make space for new stock.
Most retailers are selling products that come with a range of variants, such as color and size for those in the fashion industry. Adding the stock availability into a custom label will allow you to analyze and bid more precisely, to help ensure that you sell all product variants – not just the most popular ones.
This is further significant when considering the effect of stock availability: you can read the results of our research on stock availability and its effect on consumer purchase behavior.
For example, you might want to define custom label 0 as “margin”, custom label 1 as “season”, custom label 2 as “selling rate”, and so on.
The values for “season” would be “Spring”, “Summer”, “Autumn”, and “Winter”, whereas suitable values for “margin” would be “LowMargin” and “HighMargin”.
It may be a bit time consuming, but by applying your new custom labels to your product range you will be able to review and adjust your bidding strategy for items in different product groups. The end product will look something like this:
Understanding how your products vary according to these attributes will enable you to create custom labels to more clearly organize your product range before feeding it into Google Shopping.
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