Complete Guide to Google Shopping Ad Extensions, Annotations & Labels for 2023

Complete Guide to Google Shopping Ad Extensions, Annotations & Labels for 2023
Ramesh Karki | December 12, 2022

Google Shopping Ad extensions, annotations & labels are additional contents displayed on Google Shopping ads, apart from the title, price, image & store name, which help your ads stand out in the auction, while enticing shoppers to click on your product ads over your competition. Special offers, reviews & ratings, local inventory ads, sales annotations, price drop annotations, shipping labels, and return policies are additional pieces of information that can be enabled for your Google Shopping Ads.

The following article consists of a complete guide to using these ad contents. You will learn about what these extensions are, who should use them, how to set them up, and bonus content including the impact of each of these extensions on ad impressions & position.

Let us begin!

What are Google Shopping Ad Extensions?

Google Merchant Promotions, reviews & ratings, and local inventory labels are Google Shopping Ad Extensions that are enabled from Google Merchant Programs. They are important components in the Google Ad Ranking algorithm. These shopping ad extensions improve your Google Quality Score simply because they make your ads stand out in the auction and can boost click-through rates (CTRs).

Google Merchant Promotions

The Google Shopping Merchant promotions ad extensions allow advertisers to include “special offers” on their product ads. If you are already offering discounts, gifts, or free shipping in your online store, then you can set up these promotions in the Google Merchant Center which enables this extension in your Google Shopping Ads. This feature is currently available in Australia, France, Germany, India, UK, Canada, and the United States.

Special Offers Extension

How to enable the Google Merchant Promotion:

To enable this ad extension, first, you should enable the “free promotions program” through the following process: Google Merchant Center > Growth > Manage Programs. Once enabled, the ‘Promotions’ module is made available in the merchant center’s main menu. You can then manually create promotions, or you can create promotions by sending promotion feeds as well. You can set up a promotion for all the products at once or on specific products as needed.


  • Must provide a value in monetary form or gift equal to the monetary value
  • The monetary value cannot be less than 5% of the product price
  • Title bait is strictly prohibited, and you cannot trick or mislead Google shoppers
  • Must be accessible to all Google shoppers and must not impose offers on a certain group of shoppers
  • Must use a valid redemption code for Google Shopping special offers or promotions unless it is free shipping

Also, note that Google reviews your promotional setup and verifies it on your website before approving.
Check Google documentation on promotion setup.

Google Local Inventory Ads:

Google Local Inventory Ads allows retailers with brick & mortar stores to reach both local and nearby customers. They provide retailers an opportunity to showcase real-time local inventory ad information such as ‘In-Store’ and ‘Pick-Up Today’ alongside their product ads. The feature allows local stores the opportunity to leverage their proximity to shoppers to increase traffic and sales.

Retailers who have brick & mortar stores in Argentina, Australia, Austria, Belgium, Brazil, Canada, Czech Republic, Denmark, Finland, France, Germany, India, Indonesia, Israel, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, Taiwan, the UK, the US, and UAE can enable this extension.

Local inventory Ads

How to set up local inventory ads:

To enable this ad extension, firstly you should enable the Free local product listings program in Google Merchant Center > Growth > Manage Programs. Click start and provide the necessary business information asked by google.

The second step is to set up a local inventory feed. It is similar to your primary product feed, only difference is that you need to add a Store Code, Product ID, Quantity, and Price. Besides those required features, you can also send Sale Price, Sales Price Effective Date, Availability, and Pick-up Method. It is highly recommended that you send your inventory feeds daily.

The third step then is to send the inventory verification request which also can be done from the Manage program > Free local product listings > Settings. Google will take around 7 days to verify your setup and activate the extension for you.

The final step is to enable the local product setting in your shopping ads campaign. You can find this in your shopping ads campaign > settings > local products.


  • You must have a physical store at the address that is listed on your ads.
  • You must be a local brick-and-mortar business.
  • The customer must be allowed to physically visit, view, and purchase any products at the location.
  • Your physical store must not have policies such as membership or store member to purchase any kind of product. If you have such policies, you are ineligible for Local Inventory Ads
  • You are not allowed to use the Customer Personal Identifiable Information for your use.

Check google documentation on local inventory ads setup.

Product Ratings and Reviews Extensions

This shopping ad extension lets you display aggregated product reviews from across the web and presents a “star rating” based on a five-star scale below your ads. To get google shopping annotations “product ratings”, the specific product must have at least 3 reviews to form an overall rating. These ratings can be used from your website or external review sites. The numbers next to the stars show the number of reviews for the product. Product ratings define the reviews for a specific product you are selling.

Product Review and Ratings

How to enable Review & Rating Extensions?

To enable this ad extension, first, you should enable the Product Rating program in Google Merchant Center > Growth > Manage Programs. Google will then present the Product Ratings Interest Form to apply for the program. Once you are approved you can set up and submit review feeds to enable this extension. Go through this link for more detail on the product review feed.


  • The retailers must have at least 50 reviews on all their products
  • Must share all the reviews and submit them to Google at least once a month.
  • The submitted lists must include all reviews including low-star reviews.
  • The content that violates the guidelines must be removed.
  • The Google Shopping feed matches the reviews data to your product feed using multiple factors such as:
    • GTINs (Global Trade Identification Number)
    • Brand
    • MPN (Manufacturer Part Number)
    • Product URLs

GTINs are one of the strongest factors that offer significant help in product matching with reviews data, thus showing product ratings in Google Shopping.

Check google documentation on Product Review Extension setup.

Other Ad Contents: Google Ad Annotations & Labels

Sale Annotation, Price Drop Annotation, shipping labels and return policies are other features on the Ad Contents that communicate what you have to offer and allows you to showcase your product to win more impressions and clicks. These are additional ad contents that can be enabled in Google Shopping ads.

Sale Price Annotations

Sale Price annotation in ads implies the advertised product is in Sale in the advertiser’s store. It is primarily denoted on the ad by a strikethrough on the regular price and the new price next to it.

sale price annotation

How to activate Sale Price Annotations?

The “Sale” will be visible in the product listing ads if your product is deemed eligible by Google. In order to be eligible, you have to have the following columns in your product feed submission: base price (non-sale price), ‘sale_price’, and ‘sale_price_effective_date’. The sale price effective date attribute is your way of telling Google when the sale starts and ends.


  • The base price and sale price must be clearly visible.
  • Your product must charge the original price or base price for a period of 30 days (does not need to be consecutive) in the past 200 days.
  • The base price must always be valid and must be higher than the sale price.
  • You cannot offer a sale discount of less than 5% or more than 90%.

Price Drop Annotation

“Price Drop” annotation is one of the Google Shopping special offers extensions that can attract shoppers with monetary incentives. It is a bit different than the ‘Sale’ feature in that this feature says how much the price dropped in the form of a percentage or it shows what the price used to be below the current price which can be very influential.

Price Drop - Google Shopping Ad Extensions & Annotations

How to add Price Drop annotation?

Like the ‘sale’ annotation, Google automatically determines whether to show the ‘price drop’ annotation if the price of that product drops considerably below its 90-day average price. There is no guarantee that the ‘price drop’ annotation will show even if it has a qualifying drop in price. This annotation is usually displayed on product ads with a price drop of 20% or more.

Shipping Labels

Google Shopping ads generally show “Shipping Labels” on the bottom of a product listing, as shown in the figure below. These labels highlight the shipping detail on your ads.

Shipping Label annotation - Google Shopping Ad Extensions

How to set up Shipping Labels in Google Shopping ads?

To enable this feature, you need to go to the Shipping and Returns in the Tools section of the navigation menu on the Google Merchant Center and set up your shipping settings to identify products that ship free (Free of charge or product price meets the minimum limit) or fast (must provide both handling and transit time).


  • The shipping label may vary in the form of “Oversized”, “Perishable”, or “Free Shipping”. You must provide the right one for your product.
  • You must assign attributes such as ‘Shipping Label’ and ‘Transit Time’ to your google product feed fields.
  • Every user who clicks on your google shopping product ads must be able to see every piece of shipping information.

Return Policy

Another subset of information that shows up on Google Shopping ads is the return policy, as shown in the figure below.

Return Policy - Google Shopping Ad Extensions

How to add return policies in Shopping Ads?

The google shopping annotations “return policy” associated with any products should be specified using “Return Policy Label” attributes. The first return policy will be your default return policy unless you create other return policy labels. You can also create a unique return policy label for a product or group of products.

To enable this feature, you log in to the Merchant Center > click Shipping and returns > Return policies > Add Policy. Here you can select a recommended policy or create custom policies as well as add additional details like how many days customers have to complete the returns and what kind of products it is applied to (old or new).


  • You should provide information about return policies when you submit your product data to show up on the shopping ads.
  • You are always required to provide clear and prominent return information.
  • You need to create return policies in your Merchant Center account
  • You must assign attributes such as ‘Lifetime Returns’ to your google product feed fields.

Impact of Google Shopping Ad Extensions and Annotations on Ad Impression & Position

The best thing an advertiser can do to set themselves up to get the maximum benefit on Google is to have their product information and feeds optimized for Google to apply as many features that are possible and suitable on an ad. Conveying promotions, sales, shipping expectations, and review & ratings, etc. in all the ways it is allowed to be used will set you up for increased impressions, clicks, higher ad rank, and overall better ad performance.

The graph below shows the use of ad extensions and annotation across the five categories. It shows that some features are used more often than others, like the reviews and ratings and shipping labels are used much more frequently in comparison to the LIA and Price drop extensions.

Google Shopping Ad Extension Usage across categories

As we all know, all advertisers are competing for the most coveted real estate on Google Shopping which is the ‘above the fold’ ad auction. So, we analyzed what percentage of these ad extensions and annotations were found on the ‘above-the-fold’ ads. As shown on the graph below the usage of all the extensions has gone significantly higher. The Food and Beverage category looks to be utilizing these extensions at the highest rates on their ‘above-the-fold’ ads among the 5 categories.

Google Shopping Ad Extensions Above the fold

Use of Google Shopping Ad Extensions Impact on Ad Ranks

Here is a snapshot of the ad extension and annotation usage on the top 5 ranked ads across the 5 categories. A glance at these graphs and we can see that there is a declining trend in the usage of ad extensions and annotation as we move away from the top spots.

Use of Google shopping ad extensions impact on ad rank


The Google Shopping Ad Extensions, Annotations, and Labels mentioned above will improve your google shopping ads rank if used properly. The ad details outlined provide insights into ad gaps that advertisers can act on to increase your expected click-through rate (CTR). Retailers are suggested to focus on these google shopping ad extension features to improve quality score and ad rank without increasing ad spends. In addition to improving quality scores and ad rank, insights on annotations and extensions can help advertisers understand when there is an influx of new sales, price drops, or promotions on Google Shopping. These insights can especially be useful in competitive categories, during seasonal periods, and catching the latest trends.

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