inMarketing & Promotion
Are Etsy ads worth it? How much does it cost? How much should I spend on it to test?
If you have asked these questions before, you are not alone.
I’ve done some investigation and testing for my own Etsy shop. Let’s go through what I’ve learned about this paid advertising. Later in this guide is real-life data of my 2-month experiment using Etsy ads.
Let’s dive right in.
Etsy ads (or promoted listing as previously called) are one of the most direct ways to promote your Etsy shop.
There are two categories of Etsy ads: Onsite and offsite.
In this section we will go through the costs, customisations and placement of them.
Etsy onsite ads show up primarily among the organic search results on Etsy.com. Do a simple search on Etsy and you will see some of the listings have the word (Ads by xxx). Those are the paid advertising.
Also they show up on the category page and market pages on Etsy as well.
Offsite ads, on the other hand, are listing ads promoted outside of Etsy. Etsy promotes product listings on popular platforms like Google, Facebook, Instagram, Buzzfeed, etc.
Onsite ads can be controlled under ‘Marketing’ and ‘Etsy Ads’ in your Etsy dashboard. There are only a few things you can control. You can turn it on and off, change your budget and choose which listings you’d like to promote. It is not mandatory and can be start and stop at any time.
Unlike onsite ads, you have less control over Etsy offsite ads. You are not able to change the listings to promote or the budget. You can opt out if you make less than US$10,000 a year.
For Etsy sellers who make over US$10,000 over the last year, you can't opt out of Etsy offsite ads.
You can adjust which countries’ shoppers can see your ads. Your ads will only be shown to shoppers in countries that you ship to. Go to ‘shipping profiles’ under ‘settings’ on your dashboard to add/remove countries.
You pay for an onsite Etsy ad when shoppers click on your Etsy listing ads (Cost per click). It is not charged based on views or sales. Some outdated articles on the internet would say that you can bid on price of the click. However, that is not the case now after Etsy changed the ads system.
On average, most sellers pay around US$0.2-0.5 per click for an Etsy ad.
Unlike onsite promoted listings, you only need to pay for offsite ads when shopper buys your product after clicking.
For every successful Etsy offsite ad, meaning that the shopper clicks the ad and makes a purchase, Etsy charges a fee of 12-15%. 12% ad fee for sellers who makes over US$10,000 on Etsy for the last 12 months, and 15% ad fee for the rest of the sellers. This ad fee is on top of the original transaction fee, listing fee and Etsy Payment fee.
Now that you are more informed about Etsy ads, you probably know the answer is that - It depends.
Generally speaking, shops selling higher price items ($30+) will have a better chance of success. That is because ads on Etsy are charged the same way no matter what the item price is. For a low price item, like a digital download that costs $5, the ad fee becomes a bigger percentage of the cost.
Established shops also have a better chance of succeeding because of their higher conversion rate. It means that they need fewer clicks before a shopper place an order, which makes the ad fee lower and more affordable.
It’s also worth trying Etsy ad for items that uses keywords that are competitive and difficult to rank. Those listings may be difficult to rank organically. It may be a good idea to pay for ads so that the listings show up higher in the Etsy search results.
For newer shops, it may be worth it pay for ads as an investment to gain visibility and some positive reviews on Etsy quickly.
So, Etsy ads are not for everyone. The most important thing is to test it for your own shop.
Here is an experiment of my shop running Etsy ads (onsite ads) for 2 months. I’ve learned a few things from this experiment.
Let’s go through the data and break it down.
On average I spent about $3 per day. The total spent was $182.72 in 60 days. I made $192.23 of sales during this period because of ads. It wasn’t profitable after taking various costs into account like transaction fee, listing fee and Etsy Payment fee.
It averages about 12 clicks per day. So each click works out to be about $0.25. As the number of clicks are consistent, it is safe to say that I hit the $3 budget cap every day.
The conversion rate during this period was 4.78% for the 32 orders generated, which is about the average of my shop.
There are some reasons why Etsy ads may not be right for my shop. The biggest one is that my listings already rank well on organic search. Most of them are on page one of relevant keywords. That means they are already showing up without the ads, which makes the promoted listings not as effective.
Also, compared to physical products that sell about $50-100, my items are lower-priced digital downloads priced at $10 or less. The advertising costs is proportionally too high, which eats into my profit margin.
For a case like this, it’s more productive to put effort in improving my existing listings and creating new listings based on the demand.
It works relatively quickly. In my experience, the ads show up within a few hours, and it only takes a few days to max out my ad budget and the number of clicks to stabilise (given that you are not spending a crazy amount).
For most shops, I would recommend a budget of $3-10 per day for a week so that you have enough data and statistics to know which of your listings work and which don’t.
Alternatively, you can set a low budget of $1. But Etsy would take longer to optimise the clicks and you won’t have a good amount of statistics until after a month.
In the beginning, it’s a good idea to advertise most of your shops listings. If you need to choose only a handful of products to promote, I would recommend going to your ‘listings’ page and choose the make the most amount of sales compare to other listings with similar amount of views or visits.
Finding those listings will give you the best chance of success in Etsy ads.
After testing those listings in Etsy ads, you can stop promoting the ones that don’t get any sales especially if they use up a large amount of your ad budget. You should be left with the listings that sells and the listings that don’t get promoted much. Also add in new products in the mix so you can test them out as well.
You should continue this selection process every week or two weeks in order to maximise the profitability of ads.
To cancel Etsy onsite ads, go to ‘Etsy ads’ under ‘marketing’, then click other options to turn off ads.
For offsite ads, you can only turn it off if you make less than $10,000 a year in sales. Go to ‘settings’ and ‘offsite ads’, and click ‘stop promoting my products’.
One of the main reasons why Etsy ads are not converting is that the listing is not optimised. I've written some actionable strategies in this free conversion rate optimisation guide.
Also, if you'd like to take your whole Etsy business to the next level, check out my full course "Step-By-Step Guide To Profitable Etsy Ads" on GYC Etsy Academy.