Definition
Custom labels are five optional product feed attributes, numbered custom_label_0 through custom_label_4, that a store fills with values of its own choosing so campaigns can be subdivided by something Google does not know. Shoppers never see them. They exist purely so that bidding, budgets and reporting can be organised around facts the business holds, such as margin band, stock cover, seasonality or product age.
A five label scheme for a seasonal catalogue
- custom_label_0
- Margin band: high, medium or low, calculated from cost and price at feed build time
- custom_label_1
- Season: spring_summer, autumn_winter or year_round
- custom_label_2
- Stock cover: overstock, healthy or low, refreshed daily from inventory levels
- custom_label_3
- Performance tier: top_seller, steady or no_sales_90d, recalculated weekly
- custom_label_4
- Price band: under_50, 50_to_150 or over_150
- How it is used
- Listing groups and campaign structure built on the labels, so a low margin overstock item can be bid differently from a high margin best seller
An illustrative scheme. The values are arbitrary text and mean only what the store decides they mean, so the definitions belong in a document the whole team can read rather than in one person's memory.
Why it matters
Custom labels matter because Google's automated bidding optimises toward the goals it is given and has no idea which of your products are worth selling. Two items with identical prices can leave very different amounts behind once cost of goods and shipping weight are counted, and without labels there is no way to tell a campaign that. Labelling by margin lets a store set separate targets for products that can afford aggressive bidding and products that cannot. Labelling by stock cover lets budget follow inventory, pushing overstock and easing off items about to sell out. In Performance Max, where control is limited, the label is one of the few structural levers a store still has.
Where it goes wrong
- Filling labels with information already in the feed, such as brand or product category, which adds no new capability because Google can segment on those fields anyway
- Creating dozens of distinct values, which fragments campaigns into groups too small for bidding to learn from and makes reports harder to read than the raw catalogue
- Setting them once by hand and never refreshing, so stock cover and performance tier describe a catalogue that has moved on and budget follows last quarter's picture
- Changing the meaning of a label without renaming it, which quietly invalidates every comparison against earlier periods and confuses anyone reading old reports
- Assuming a value change takes effect instantly: the campaign structure only responds after the feed is fetched and processed, so daily rules need a feed schedule that supports them
Questions about custom labels
How many custom labels can a product have?
Five, numbered zero to four, with one value in each per product. If you need more dimensions than that, combine them into a single value with a separator you control, such as a margin and season code in the same field, and split it again in your reporting. It is less elegant than more fields but it keeps campaign structure workable.
How does a store populate custom labels automatically?
With rules in whatever builds the feed. Merchant Center feed rules can derive a label from other attributes, and dedicated feed tools can join in external data such as cost of goods or a sales export. Stores with developer support often generate the labels in the feed itself, which allows calculations, such as margin bands, that would be awkward to express as rules.
Do custom labels affect whether products show in Shopping results?
No. They play no part in matching a product to a query and are invisible to shoppers. Their only effect is structural: they let you separate products into campaigns, ad groups or listing groups with different bids, targets and budgets. The performance change comes from the different treatment, not from the label itself.