Optimising OTTO advertising: campaign type, bids and search terms

Your Sponsored Product Ads are running, and now the question is what to adjust. On OTTO there are three levers: which campaign type advertises an item, how high your bid per click is and which search terms your ads appear for. This guide shows how the two campaign types work together, how to judge a bid and what to do with individual search terms.

How much advertising an item can carry at all is worked out step by step in the guide to OTTO advertising costs. We reuse its result here: an item selling for EUR 59.50 gross brings a contribution margin of EUR 10.96 per order after returns, before advertising is deducted. Its limit is a ROAS of 5.43.

Two campaign types: automatic and with keywords

OTTO has two ways of advertising an item. In the automatic campaign, OTTO uses your product data to decide where the ad fits. In the keyword campaign (keyword targeting, “manual” in the API) you decide which searches it should appear for.

OTTO recommends combining both types and names as an advantage of the automatic campaign that it delivers new keyword ideas. That gives a simple division of labour: the automatic campaign runs broadly across all placements. The keyword campaign gets the search terms that demonstrably sell, each with its own bid. According to OTTO, ads with keywords achieved a 120% higher ROAS and a 50% higher click-through rate than automatic campaigns in the beta test. That is OTTO's result from the test, not a promise for your item.

Exact, Phrase, Broad

For each keyword you choose one of three match types. OTTO's public documentation does not describe in detail how broadly it interprets them. The names follow the usual logic:

• Exact: the ad appears for exactly this search term. Narrow and easy to plan.
• Phrase: the search contains the phrase, for example “klappstuhl holz” (wooden folding chair) also for “klappstuhl holz 2er set”.
• Broad: the ad also appears for related searches. Broad, useful for finding new terms.

Because nothing can be excluded in keyword campaigns, you steer there through the match type. If a broad keyword brings too many unsuitable searches, you book the good ones as Exact and lower the bid of the broad keyword or remove it. OTTO does not describe which keyword it serves when both match a search. Check in the search term report whether the search then lands on the Exact keyword.

Bids: lower, hold or raise

Your bid is the maximum you pay for a click. OTTO currently requires at least EUR 0.20. What you actually pay depends on the competition in the category. Whether a bid fits is not decided by the cost per click alone, but by what a click earns you.

The calculation is short: conversion rate times contribution margin before advertising gives the highest cost per click an item can carry. If every 25th click leads to a purchase, that is 4% × EUR 10.96 = EUR 0.44 per click. Above that, every sale through the ad costs you money. The break-even ROAS as a second limit is explained in the glossary under ROAS and break-even ROAS.

Example: two keywords, one item

The same item (EUR 59.50 gross, EUR 10.96 contribution margin before advertising, limit ROAS 5.43) runs with two keywords. The figures are an invented example for one month:

• Keyword A is clearly above the limit with a ROAS of 7.93, and you pay EUR 0.30 with EUR 0.44 of headroom. Raising the bid carefully is worth it here if the ad does not appear often enough yet.
• Keyword B costs contribution margin: ROAS 3.78 below 5.43, cost per click EUR 0.42 above the affordable EUR 0.29. Lower the bid below that limit, or remove the keyword if it still does not sell.

The keyword report suits this comparison well: OTTO only attributes purchases of the advertised item there, the same level as your contribution margin per item. Other reports count purchases of other items in the campaign or of the same brand, depending on the level, and therefore look better. Why that does not work for the bid is shown in the advertising costs guide in the section on attribution levels.

When a figure is enough to decide

A few clicks are not a verdict yet. At a conversion rate of 3.5% you expect about one order after 30 clicks. Zero orders is still chance at that point. After 100 clicks you would expect three to four; if it stays at zero, that is a signal.

Then there is time. OTTO attributes revenue to a day for several weeks after the click; we see this in the daily retrieval. A ROAS for the last two to three weeks is therefore still provisional and tends to be too low. Judge a change on full weeks that lie at least two to three weeks back, and do not change the same bid again in between. Otherwise you will not know what had an effect.

What OTTO offers itself

In the SPA forecast report, OTTO rates the current position of your products with a traffic-light system and gives bid recommendations. With intelligent bidding, OTTO adjusts bids automatically and spreads the budget across the items with the best prospects. Both aim at position, visibility and ROAS. OTTO does not know your purchase prices and shipping costs and therefore not your contribution margin per item; so you set the limit alongside them yourself.

Analysing search terms

A keyword is what you bid on. A search term is what the customer actually typed. With Broad and Phrase, one keyword triggers many different search terms, and that is exactly where the money you can save or gain is.

For keyword campaigns, OTTO provides the actual search term per keyword, the match type, clicks, costs and attributed revenue, for at most 90 days. For automatic campaigns, the interface provides no search terms. As a source of ideas, OTTO names an automated keyword report: it shows which search terms customers have used to find your products so far. Three actions follow from this:

1. Adopt: a search term brings orders and is above your limit. Book it in the keyword campaign as its own Exact keyword with its own bid.
2. Exclude: a search term does not fit your item. In the automatic campaign you exclude it as a negative keyword; there are no figures per search term there, so you decide by fit. If a search term in the keyword campaign brings no order after enough clicks, you narrow the triggering keyword or lower its bid, because nothing can be excluded there.
3. Find new terms: OTTO names the shop search suggestions, the category filters and the search term analysis. What customers are suggested in the search bar is also what they search for.

Important for context: search terms only exist for the part of your advertising that runs through keywords. If the keyword campaign covers only a fifth of your ad costs, the search terms say nothing about the other four fifths.

OTTO advertising in profitkonsole

profitkonsole for OTTO retrieves your SPA data daily via the OTTO Marketing API and puts it next to your other costs:

• Campaigns and ad groups with ROAS (revenue at brand level) and TACOS, with filters such as “ROAS below 2”. You do not compare this ROAS with the break-even ROAS of a single item.
• “Search terms” tab: ad costs, impressions, clicks and cost per click per search term, keyword, match type and campaign. Above the table you see which part of your ad costs the search terms cover.
• Ad costs per order: every order carries the SPA costs incurred on the order day for exactly its items. That way you see the contribution margin per item after advertising.
• AI assistant: through the MCP server you query your campaigns and search terms in Claude or ChatGPT.

profitkonsole does not change anything in your campaigns. It shows you costs and clicks per search term and the contribution margin per item after advertising; you make the change in OTTO Partner Connect. That way every change stays your decision.