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.
1- Google Analytics Metrics
2- Sales & stock
3- Price
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.
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)