Most Google Shopping advertisers treat their catalog like a flat list. Same bid logic, same campaign structure, product after product. It’s the path of least resistance — and it’s quietly costing them.

But the truth is a product generating 8x return on ad spend (ROAS) shouldn’t share a budget with one generating 0.8x. Segmenting by performance and bidding accordingly is one of the oldest levers in shopping campaign management. And it works.

The catch in such cases has always been execution. For large catalogs, manual segmentation is genuinely painful. Google Ads scripts solve it — in theory. In practice, if you don’t write code, you’re dependent on scripts you didn’t build, can’t debug, and are afraid to touch.

Optmyzr’s Smart Product Labeler exists for exactly this situation.

Product segmentation made easy with Optmyzr’s Smart Product Labeler

What is the Smart Product Labeler?

The Smart Product Labeler tool lets you build a strategy to easily label products based on performance metrics or feed attributes, creating a supplemental feed with minimal effort.

It also automatically updates labels as performance changes, enabling you to use the performance-based approach for campaigns without exceeding Google Ads limits.

Where to find it in Optmyzr?

Navigate to the ‘Shopping’ section on the left side menu and you can find the Smart Product Labeler under ‘Shopping & P Max Retail.’

You can also try the tool directly here. Here are some easy steps to set it up:

1. Click on “Create a New Strategy” and name your strategy to help you identify it in the future. You can also copy a strategy from another account.

2. Select the Merchant Center account and ensure that it is linked to Optmyzr.

3. This step is optional. If you don’t want to label your entire feed, you can filter down to a specific subset — by brand, product type, or a custom attribute — before any rules run.

You also get the option to add multiple rules. The tool then labels only the products that match all the Product Selection rules and ensures that you only target relevant products.

4. Select the custom label you want to use for categorizing products in this strategy. Before you pick a label, SPL shows you how much of your feed already uses each custom label — so you don’t accidentally overwrite data that’s doing something else.

This makes it easier to choose an appropriate label destination and avoid unintentionally overwriting existing feed data.

5. Choose a date range and define rules using performance metrics like clicks, ROAS, conversion value, etc. You can also use feed attributes and OR conditions to group products under the same label.

6. Assign a custom label value to each performance bucket you create. Add a catch-all bucket to ensure products not matching any rules are still labeled.

7. Preview the supplemental feed to see how labels will be updated for your products. You can also download the full CSV to review all changes before uploading.

8. Use the generated URL to upload the feed as a supplemental data source in the Merchant Center. Follow the in-app instructions to complete the setup.

9. Schedule automatic updates so labels refresh as product performance changes.

Why use this strategy to group products by performance?

Segmenting products into different performance tiers and creating targeted campaigns for each is a tried-and-true strategy. Here’s why:

1. It helps you optimize campaigns based on performance.

As we’ve said in the introduction, different products in an inventory perform at different levels. Some products generate high returns, while others underperform.

When you can see which products are actually earning their spend, you stop spreading budget equally across products that perform very differently.

2. It helps increase ROAS.

By targeting high-performing products with higher bids or budgets, you can improve the chances of increasing their exposure and revenue. On the other hand, lower-performing products can be assigned lower bids to optimize spend. This increases the overall ROAS for the campaign by making sure that budget allocation matches product potential.

3. It allows scalable segmentation.

With the Smart Product Labeler, you can automatically segment products into performance-based buckets such as Heroes, Sidekicks, Villains, Zombies, and Flukes. At scale, manually reviewing every product’s performance and adjusting labels isn’t a strategy — it’s a full-time job you don’t have.

4. It’s flexible across campaign types.

The same rule set works across both Performance Max and Standard Shopping. Your top performers can run in PMax while products that need more hands-on control sit in Standard Shopping — one labeling strategy, two campaign types.

When should you use this strategy?

1. When you’ve got a high product volume

If you’re managing a large inventory of products, manually adjusting bids and campaigns for each product is not feasible. Automating the segmentation of products with the Smart Product Labeler allows you to efficiently handle large volumes of data without sacrificing accuracy.

2. When specific product grouping adds value

If you have products that behave differently (e.g., high-selling products with low margins and low-selling products with high margins), it makes sense to group them into separate campaigns with tailored strategies for each. Segmenting by performance helps to implement this kind of differentiation easily.

3. When you need granular control

This strategy helps you gain more granular control over your shopping campaigns. Dividing products into performance tiers means you can set different bids, budgets, and ad copy for each group — instead of treating a hero product and a zombie the same way.

When should you not use this strategy?

While grouping products by performance can be an effective strategy, it’s not always the best approach in every situation. Here are some scenarios where it may not be ideal:

1. When you lack adequate data

For new accounts or campaigns with insufficient performance data, segmenting products by performance may not be beneficial. The Smart Product Labeler relies on historical performance metrics to create the rules, so it works best when there is enough data to draw meaningful insights.

If you’re a few weeks into a new campaign, hold off. The tool works on historical data — and right now you don’t have enough of it.

2. When you have highly niche product lines

For smaller, niche product lines with few items in the catalog, segmenting by performance may not yield substantial value. If your catalog has five products, segmentation adds complexity without adding insight. Keep it simple with general optimizations.

3. When you don’t want to overcomplicate simple campaigns

If your product catalog is limited in size or you’ve got a straightforward campaign structure, complex segmentation strategies may add unnecessary layers of management. Sometimes, sticking with a simpler approach can be just as effective and easier to manage.

For example, let’s say you have a few brands in your inventory, and each performs differently. In such a case, you can allocate budgets and bids based on their performance rather than treating them equally.

In another instance, for ‘Product Type’, consider someone selling t-shirts, shorts, and denim jeans. If the ROI varies across these categories, creating separate campaigns for each category would simplify management while optimizing performance.

How does Smart Product Labeler make segmentation easier?

1. It helps you set up performance-based rules.

You can create rules based on performance metrics such as impressions, clicks, cost, conversions, conversion value, cost/conv., or ROAS. Products are automatically labeled based on these criteria, which can then be used to segment those products into different performance tiers.

OR conditions make it easier to group products under the same label when they can qualify in multiple ways. For instance, let’s say you want to identify products that are getting visibility in your campaigns.

You could set up a rule where products qualify if they have more than 6 impressions OR more than 6 clicks in the last 14 days. A product only needs to meet one of these conditions, not both,to get labeled as “Products With Impressions or Clicks.”

This is especially useful when there are multiple ways for a product to qualify for the same label.

Instead of creating two separate buckets (one for products with impressions and another for products with clicks), you can consolidate them into a single, meaningful label.

It means fewer labels to juggle and simpler campaign structures overall.

2. It also helps you create feed attribute-based rules.

In addition to performance metrics, feed attributes can also be used for labeling products. For example, you could create labels based on product categories, price points, or brand information.

Choosing the right custom label is just as important as defining the rules themselves.

Before applying labels, Smart Product Labeler shows how extensively each custom label attribute is already being used across your product feed. You’ll be able to see whether a label already contains values and what percentage of products have that attribute populated.

For example, if Custom Label 0 is already populated for most of your products, using it for a new segmentation strategy could overwrite information that’s already being used elsewhere.

This visibility helps you select an appropriate label attribute with confidence, reducing the risk of overwriting valuable feed data and making it easier to manage large or complex product catalogs.

3. It automatically updates your supplemental feed.

Set a schedule once and the tool keeps the supplemental feed current as performance shifts. No manual updates, no maintenance window.

4. It allows for unified campaign management.

The tool allows you to create a unified rule set that can be applied to both Performance Max and Standard Shopping campaigns, making it easier to manage multiple campaign types with consistent strategies.

You can use the Shopping Campaign Management tool to quickly create these campaigns and automatically update them in Google Ads as needed. This ensures that if your campaign structure changes over time, the updates will be applied without manual intervention, saving you time and reducing errors.

5. It helps you apply different labeling strategies to different parts of your catalog.

Before building your labeling rules, you can define exactly which products Smart Product Labeler evaluates.

Instead of applying your strategy to your entire feed, focus on specific subsets.

You do this using rule-based conditions built on product feed attributes.

Setting up product selection is straightforward. Choose a feed attribute (like Brand, Product Type, or any custom attribute), select a condition (such as “is equal to,” “contains,” or “greater than”), and enter your desired value. For example, you could specify that you only want to label products where Brand “is equal to” “OPTMYZR.”

This is especially useful when different parts of your catalog require different optimization strategies.

For example, you may want to apply performance-based labels only to a premium brand, a seasonal product line, or a specific category that is running a promotion.

By defining product selection criteria upfront, you can focus your labeling strategy on only the products that matter for that use case. This keeps performance bucket rules cleaner and eliminates the need to repeatedly add the same filtering or exclusion conditions across multiple buckets.

Save time on product segmentation with the Smart Product Labeler

If you’re looking to streamline your product segmentation and improve your shopping campaign performance, the Smart Product Labeler is a tool worth exploring.

It lets you turn performance data into clean, usable product groups, automatically and at scale.

You set the rules once. After that, the labels stay current and your campaigns stay aligned with how products actually perform — no scripts, no manual updates, no babysitting the feed.

Not an Optmyzr customer yet? Now’s the best time to sign up for a full functionality trial.