What is custom label?
A custom label is a feed field you fill with your own values, used to group products for campaign structure, bidding and reporting rather than to describe the product to shoppers.
Worked example, not a result
Grouping a catalogue by margin instead of by category
Say a store fills its first custom label with a margin band worked out from its own costs. Products with a contribution margin around 53 percent are labelled high, those near 32 percent are labelled medium, and those near 17 percent are labelled low.
That single field changes what the ad account can do. The high band can carry an ambitious budget and a target that allows a lower return, because there is room in the margin. The low band gets a strict target, because those products cannot afford expensive clicks. Without the label, every product shares one target and the account overspends on the thin margin items while underspending on the profitable ones.
The remaining label fields can carry other groupings that matter to the business: seasonality, stock depth, new arrivals, clearance, or whether an item is a first purchase product or a reorder.
The margin bands above are made up for the example.
Why it matters
Custom labels are how a store's own economics reach the ad platform. Advertising systems know what products cost to sell and how often they convert; they do not know what each one earns you. A label carrying margin, stock or seasonality closes that gap.
The result is better allocation on the visitors lever. Budget flows towards products that can carry it, away from products that cannot, and towards items you actually want to sell rather than the ones that happen to attract the most clicks. It also protects order value, because grouping by price band or by bundle status stops cheap items eating a budget meant for the range that builds a bigger basket.
For a store owner it is the difference between managing a catalogue and managing a spreadsheet of individual products. Labels turn thousands of items into a handful of groups with different rules, and those rules are the ones you actually want to argue about.
Common mistakes
- Labelling by category when the feed already carries product type. Duplicating information that exists wastes a field that could carry margin or stock instead.
- Setting labels once and never updating them. Margins, seasons and best sellers change, and a stale label sends budget to last year's priorities.
- Using values that only make sense to one person. Short, consistent values shared with everyone who touches the account keep the structure usable when someone else picks it up.
- Creating so many values that no group has enough data. A handful of meaningful groups beats twenty groups too small for any bidding system to learn from.
Related terms and answers
Your plan is free.
A person reads it. You keep the plan. No logins, no call first.