Etsy Ads & Promoted Listings – #1 Guide in 2021

Etsy ads (Etsy Promoted Listings) can be a great way to take your Etsy business to the next level by reaching new customers and increasing sales.  However, taking the step to start an advertising campaign to promote your Etsy shop might be sound intimidating. But it doesn’t have to be!

We have comprised the most valuable information and created this guide to help shop owners navigate everything that has to do with Etsy Ads (Etsy promoted listings). By the end of the guide, you will know how to formulate an advertising strategy, how to determine if Etsy Ads are right for your shop and, numerous other tips that will help bring success to your store.

What are Etsy Ads?

Etsy Ads is a tool that the Etsy marketplace offers to shop owners to help them expand their reach. Etsy promoted listings are a form of paid advertisements so sellers can increase the visibility of their products in designated search results on Etsy. Overall, they are used to boost sellers listing exposure within the marketplace search engine.  

How do Etsy ads work?

As there are thousands of sellers using Etsy Ads, it is not guaranteed that promoted listings will reach the top of search results as soon as the campaign is turned on. Unfortunately for sellers, the Etsy algorithm is a much more complicated mechanism than that. Your promoted listings and all Etsy ads go through an auction system. Many search engines operate like this because the amount of “ad space” available on the platform (in this case Etsy) is much lower than the demand for ad space, additionally, some keywords are more “in demand” than others.  The auctions are used for listing to compete against each other for the paid advertising space.

Two factors are used in the bidding which, affect your Etsy promoted listing’s performance during the ad auction.

These two factors are the listing quality and the bid amount. 

Listing Quality 

The listing quality refers to how likely a buyer is to click on a listing. Etsy determines a listing’s likeliness on its quality score. The quality score is determined by an array of factors such as the number of tags, strong listing titles, shop history, and customer reviews. 

The Bid Amount

The second factor that Etsy takes into consideration for ad auctions is the bid amount. Etsy uses an automated bidding system where sellers can bid on their listing placement. A bid refers to the amount a seller will pay of one click on a listing. However, the seller does not decide on the bid price. The automated system decides this based on various factors. 

The following are two factors that play a part in determining your bid amount and therefore, your listing placement. These factors are the likelihood of sales and relevance to the shopper’s search. 

Likelihood of Sales

The likelihood of sales is a factor when determining the bid amount because it guarantees that bid amounts will reflect the value of being in that ad placement. It rightfully reflects the value by using various factors to estimate a shopper’s position and their chances of making a purchase.  

In other words, if a shopper is estimated to have a higher likelihood of buying a product, the bid price will be of higher value. 

Shopper’s Search Relevance

Etsy also takes your listing’s title or tags into consideration when deciding on a bid amount. They do this by matching them to shoppers’ search terms. Therefore, your Search Engine Optimization (SEO) strategy does influence your bid price. An Etsy shop owner needs to use relevant words and filters, so your product has a chance to land in potential buyer’s searches. 

How are Etsy Ads placed?

Etsy Ads are placed in search result spots after the auction determines listing eligibility. Etsy ads can be placed on-site, or they can also be offsite. Onsite Etsy Ads means that your listing has won the bid for a space on the Etsy marketplace. Offsite Etsy Ads means your product may also gain a spot to be advertised on other search engines like google. 

The order and placement of your listing are determined by similar eligibility requirements in the initial auction. Overall, Etsy will push out the listing based on the bid amount, the relevance of keywords, and the likeliness the ad will be clicked. 

How Much Do Etsy Ads Cost?

Sellers do not need to worry about the instability of the bid price costing your shop a lot of Ad money. This is because when starting an Etsy ad campaign, you will set a daily budget. Therefore, Etsy Ads can cost as much as your shop can budget. However, Etsy does have a minimum and maximum budget spend. A seller’s daily budget must fall between $1 USD and $ 25 USD. 

Etsy has stated that the higher the amount you budget for the bid, the more competitive your listing will be. However, The Etsy bidding algorithm will not spend more than what you are willing. Fortunately, the seller will only pay for the ad bids if a potential buyer clicks on the ad.

Etsy Ads Tips & Strategy

If your Etsy ads aren’t getting clicks and you want to get more, this section is for you! Here are some tips for your Etsy ads:

SEO Strategy is Strong

A strong SEO strategy increases the visibility of your listings by optimizing the listing using keywords. Keywords are words that a potential customer would use to search for products like your offerings. Overall, it helps increase the visibility of your products to your customer’s searchers. 

Your listing will have a better chance at getting a competitive placement in the Etsy Ads if you have a strong SEO strategy. Therefore, to have a better chance at performing, you need to have optimized listings. You can learn about Etsy SEO here

Product Strategy

Be tactful when choosing which listings to promote. It may be best to make a budget that involves promoting all your listings. Or, you can be selective and just choose items that are best-sellers or represent your store well. Determine what is best to help your listings get a competitive placement and reach more potential customers. 

Advertising Budget

Etsy recommends that shop owners set a daily budget of at least $3/day to give your listing the best chance to be competitive. This budget will be enough to provide you with a good amount of clicks and hopefully a high conversion rate. 

If you are new to Etsy ads, spending more than you think will also give insight into which listings are performing the best. This insight will therefore help you hone your advertising strategy going forward. 

All in all, the more you make your budget, the more visits you will receive and the better chance you have at growing your sales.

How Much to Spend on Etsy Ads?

If you are looking into investing in advertising your shop, your goal is to probably grow your business and increase revenue. How much each seller spends on Etsy ads is a personal decision dependent on your budget and inventory size. 

Etsy recommends that customers should promote all their active listings in the beginning and let their campaign run for at least 30 days. They recommend this because it allows the algorithm to gather relevant data on your shop to help rank your listings in the auction. 

Promoting all active listing is the reason why inventory size matters in determining how much you should be spending on Etsy Ads. If you have a lot of listings, you will naturally have to have a higher budget, especially in the beginning. 

After letting your ads promote all your listening’s for a sufficient period, you can re-strategize your ad budget. If your budget is limited, it is best to invest in your best-selling listings. As you know these products are already popular, it may be the best way to use your budget.

However, keep in mind that if you bid higher for your ad clicks, the better off your ad placement will most likely be. So, if you want to determine which ad spend hits the sweet spot in terms of return, look at your Return on Ad Spend (ROAS). This metric helps sellers visualize how many dollars they earn for each dollar spent. Overall, the ROAS metric helps the seller determine the effective budget amount and listing selections.

Your budget for Etsy Ads should take into account the Offsite Etsy Ads fees. When Etsy uses off-site ads to promote your shop on other platforms, they pay for this cost upfront. However, when the off-site ads bring you sales, Etsy charges an additional fee that ranges 12-15% of the revenue you receive from the sale. 

Are Etsy Ads Worth It?

Etsy ads can be worth it; however, it is a learning curve. Once some shoppers find a strategy that works for them, they see immense growth in their business. However, you may have to go through a trial-and-error process to determine if Etsy Ads is worth it for your shop. The best way to determine if Etsy Ads is worth it is to measure the ROAS.  However, campaigns can sometimes take a few months before you’ll fully know the return. There are several other ways to increase traffic to your etsy shop.  

How to get sales on etsy without ads

Etsy SEO

Other ways besides Etsy promoted listings have brought shop owners success. The best way to gain traction without paying for Etsy ads is by building a strong SEO strategy. An SEO strategy is a free tool that will optimize and push out your listings to potential customers. Therefore, if you find that your ROAS isn’t strong, you can certainly opt out of Etsy ads and rely on a strong SEO strategy. 

Keep in mind that using Etsy ads and having a great SEO strategy are not exclusive of each other. You can use both strategies to boost your chances of higher conversion rates.

Targeted Offers & Coupons

Etsy has a free marketing tool that shop owners can utilize to capture sales. You have to opt-in and set up this tool to send shoppers who have either favourited or added your listing to their cart. Etsy will automatically send them your discount code in their email. 

Another free marketing tool that Etsy offer is sales and coupon code creation. Shops can hold a sale for the public or they can create a coupon code and send it to potential customers directly. All of these tools are great ways to boost traffic and sales to your shop.

Social Media

Another way you can see growth in your Etsy shop if the Etsy Ads are not yielding results is to maximize your reach on social media. Using popular platforms such as Facebook or Instagram can help you reach potential customers for free. These sites have millions of daily users and offer paid advertising options. Therefore, you can build up your shop’s social media presence and try to use your advertising budget on those platforms instead of Etsy Ads.

Blogging

You can also build a blog or website where you offer valuable information content. Your website will be written on topics that potential customers would care about and, it has to be related to your store offerings. The content will drive organic traffic to your store as you can link your Etsy shop throughout the blog or website.

Consider crosslisting to other marketplaces

Crosslisting is a good way to increase the reach of your products. You can upload your listings on other marketplaces like Depop and Poshmark automatically with a crosslisting tool like Crosslister by SellerAider.

How To Opt Out of Etsy Ads?

If you are not seeing the benefits of Etsy ad’s for your shop, you can easily opt-out of Etsy ads by ending the campaign. However, this will only stop your listing from competing for on-site space. 

How To Opt Out of Etsy Offsite Ads?

When it comes to opting out of off-site promotions, it is slightly more difficult. 

All sellers are automatically enrolled in the off-site Etsy promoted listings but, opting out is only an option for certain sellers. Etsy splits the criteria into two categories based on revenue to determine who can opt-out. 

Sellers that have earned over $10,000 USD in a 365-day period are required to participate. However, you have the option of opting out if your shop has made less than $10,000 USD in a 365-day period. If you chose to opt-out, be mindful that opting out takes 3 business days and, there will still be fees on sales made with off-site ads within 30 days.