Digital Marketing

Increase your product listing ads performance with custom labels

May 8, 2022
7 min

What is custom label

The most important budget optimization tool in product listing ads is segmenting your products in the most correct way. By grouping your products, you can easily manage your budget across products and channels. Thus, you can create value with a wasted marketing budget. This is possible by using custom labels in the product feed.

The first and the most important is having a proper and well-designed feed. In addition to that, Custom labels are another helper for your segmentation process.

Custom label is an attribute that enables you to have more detailed sub-categories, different attributes that are not available in product listing ads, and any information that is tailored by your preferences.

Custom label examples

1- Google Analytics Metrics

  • By combining your Google Analytics data with your product feed, you can use any metric available in Google Analytics to segment your products. For example, you can exclude products getting high traffic, but zero conversion. Thus, you can eliminate the wasted budget.

2- Sales & stock

  • By combining your Google Analytics and stock data with your product feed, you can prioritize or deprioritize different kinds of products, such as the low amount of stock, high amount of stock, low inventory turnover (stock/quantity sold), high inventory turnover, etc.

3- Price

  • By using the price and sale price attribute of your product feed and combining them with the historical data, you can prioritize high discounted (vs previous month) products to increase sales, or you can exclude very low price range products to increase ads profitability

You can also use sub-categories, season, campaign information, profit margin, ROAS or any other metric or information that is important for your business. Custom labels are designed to serve your business objectives - you can drive profit or sales, you can eliminate wasted budget or you can drive product awareness and get new users by utilizing custom labels.

It is important to remember that you can only have 5  different custom labels and 1.000 unique values. That’s why you should do your custom label segmentation after defining your business objectives and analyzing your data across different platforms like Google analytics, feed, and ads platform.

Let’s say you’re a fashion e-retailer

You might want to sell your products according to season. In that case, you can use custom labels to specify your products considering spring, fall, winter, and summer (Custom_label_0). Also, you know some of your winter clothes don't sell like bikinis in summer so you can also use custom labels to define the selling rate (Custom_label_1). After you analyze your products, you see that vintage clothes in your feed have a better impression, now it means that time to add custom labels (Custom_label_2). After you check your products’ ROAS (Return on Ad Spend), some of them are better than others, you can also use this point to label your products and focus on the ones which have better ROAS results (Custom_label_3). As a final label, you might want to focus on the profit margin of your products to balance your profitability. (Custom_label_4)

Custom_label_0 : Season (winter, fall, summer, spring)

Custom_label_1 : Selling Rate (best seller, lowseller)

Custom_label_2 : Release Year (vintage, new)

Custom_label_3 : ROAS ( 3 < ROAS, 8 < ROAS, 13 < ROAS)

Custom_label_4 : Margin (High marging, low margin)

Benefits of custom labeling

  • Custom labeling enables you to have better insights that help you to analyze your different product groups. With these insights, you can improve campaign performance by reprioritizing your products.
  • Based on your labels, you are able to recover your bidding which helps you to have better budget optimization. Also, it enables you to push your best sellers and top products with more budget and in return, you start to have more profit from your products.
  • With insights and budget optimization, you can save your place in the market. Labels make you competitive and you can use some custom labels as your competitors’ prices. You can have a better price range for your customers which makes you the leader of the market.
  • Labels create a space for running an experiment. This means that you can use different labels and collections with different bids, and features. With this ability, you can have more control over your product listing ads.
  • Custom labels also enable you to define the “unwanted” product. By thinking in reverse, you can point out products that have higher CPC, do not have good ROI, or conversion rates. By removing them from your feed, you can create value from the wasted budget.

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