Optimizing OTTO Sponsored Product Ads: the process in 6 steps

1. Structure: automatic campaign plus keyword campaign

OTTO itself recommends combining an automatic campaign with a keyword campaign. The automatic one finds search terms you did not have on your list. The keyword campaign scales the winners with their own bids.

Checkpoint: every product group has both campaign types, and the daily budget lasts until the evening. A campaign that runs out at noon is invisible for the rest of the day.

2. Search terms: harvest and block weekly

The search-term report is the most important weekly task. Terms with orders and a ROAS above your target become keywords in the keyword campaign. Terms with many clicks and no order become negative keywords in the automatic campaign. OTTO does not allow negative keywords in keyword campaigns; there you lower the bid instead.

The threshold has to match your conversion rate. Example: at a two percent conversion rate you expect one order per 50 clicks. 50 clicks without an order are a signal, ten clicks without an order are still noise. Block at ten clicks and you block good terms too.

• Winners: orders present, ROAS above target, promote to keyword.
• Burners: clicks above the threshold, no order, add as negative keyword in the automatic campaign.
• Unclear: below the threshold, watch for another week.

3. Bids: calculate from basket value, conversion rate and target ROAS

The maximum bid can be calculated: basket value times conversion rate divided by target ROAS. Example: 60 euro basket, three percent conversion rate, target ROAS 4. That is 60 times 0.03 divided by 4, so 0.45 euro as the ceiling for the click price.

Adjust bids weekly, in steps of ten to fifteen percent, and never all keywords at once by the same rate. Otherwise you cannot tell which change worked.

OTTO offers automatic bid optimization called “Intelligentes Bieten” (intelligent bidding), similar to the Smart Bidding many know from Google Ads. It takes the calculation off your hands but does not show why a bid goes up or down. If you understand the calculation yourself, you notice when the automation runs against your margin target.

4. Returns and margin: ROAS lies without the return rate

Example: a ROAS of 5 sounds good. With a return rate of 40 percent, you are effectively at 3. Subtract cost of goods and the OTTO commission and a showcase campaign quickly becomes a zero-sum game.

Checkpoint: margin per SKU after returns, not just revenue per campaign. Items with a high return rate leave the ads or get a much lower bid, no matter how good the gross ROAS looks.

5. Plan for the data delay

OTTO's reporting interface delivers numbers only up to and including yesterday; the current day is missing. The previous day can still be incomplete as well: in our accounts, impressions sometimes arrived later than clicks and costs. This applies to every tool that uses this interface, Marginly included. Decisions based on yesterday are therefore decisions on incomplete data.

Work with windows of seven or fourteen days. For bids the 14-day window is enough, for negative keywords a longer window is better because single weeks with few clicks are random.

6. The weekly routine

Optimization is not a one-off, it is a fixed routine. Stick to it and an account rarely needs more than an hour per week.

• Daily: check alerts. If a campaign's spend explodes or ROAS drops, react immediately.
• Weekly: harvest and block search terms, adjust bids by the formula, check budgets against utilization.
• Monthly: margin per SKU after returns, take return outliers out of the ads.
• Always: log every change with date, value before and after, otherwise an effect can never be attributed to a cause.