Does Your Etsy Strategy Include Etsy Ads? When to Use Them, and When to Not

Let’s talk about Etsy ads, baby! In this episode, we’re giving you an Etsy ads crash course. Listen in as we uncover when it’s the right time to get started with ads, what a reasonable starting ad-spend budget might look like, and how to determine if your ad strategy is working. And if you’re intimidated by ad-related jargon, don’t worry, we’re also covering common terms and metrics that you need to know!  

Let’s be friends! Find us on Instagram @bizbirthdaybash.

Grab your FREE Training — 4 Essentials You Need to Turn Your Biz into a Profit Party.

Before you get Started 

Before you get started with Etsy Ads, you should know that they are not a magic switch to getting sales. Ads can ENHANCE what you’re already doing. However, if your current listings are sub-par and you’re not selling, ads are not going to help; you’ll just be spending money. Of course, ads can look different for everyone, and what makes a successful ad campaign will depend on what your goals are. Obviously, the most common goal is to make money, but other factors can come into play too!

Terms to know

Click-through rate: The ratio between views and clicks

Conversion rate: The ratio between visits and completed orders

Cost per click (CPC): With the cost per click advertising model, you pay based on how many people click on your ad. To calculate your CPC for an advertised listing through Etsy Ads, divide your budget spent for the listing by the number of clicks the listing received.

Return on Advertising Spend (ROAS): For every $1 you’ve spent on advertising, how many dollars in revenue are generated? To calculate your ROAS on the listing or campaign level, divide your revenue generated by your advertising budget spent.

How to get Started with Etsy Ads

Pick a budget and stick with it for 30 days. Choose an amount that you would feel comfortable completely ‘losing.’ 

I think $10 a day is a good starting point for an experiment, might need to make it more if you have a ton of listings.

How do I decide which Etsy listings to Promote?

Step 1: Advertise ALL listings for 30 days, and track it. Note that you are only charged when someone clicks on your ad.

Step 2: Start fine-tuning from there. Focus on the listings that are having high conversions and/or focus on seasonal items. Start advertising seasonal items 2 months before the start of the season. 

Bonus: Promote NEW items to give it an extra boost! Etsy’s algorithm favors views and orders in their organic search so this just helps give it a jump start. 

How Much Should I Spend on Etsy Ads?

it does limit you initially but it gives you more budget as you add in money. I think the max you can spend at first is $50. 

Honestly, I say you should spend as much as you can IF you are making your money back. Again, everything is slow so take time to test over 30 days and monitor your ad spend daily. There’s a threshold where let’s say your spend is at $250, and you’re only hitting around the $200 mark every day. At that point, I would bring it down to $200 because Etsy is going to try to spend that extra money on “weird” keywords that might not necessarily be the best fit for your product. So they’re trying to squeeze it in searches that might not be as relevant.

How do I Know if my Ad Strategy is Working? 

To determine if your Etsy ad strategy is working, you need to calculate your Return on advertising spends AKA your ROAS. 

Note that, Etsy says a good benchmark for a successful ROAS is 2.8%. 

If you have larger profit margins, your ROAS will be higher, so definitely focus on the higher profit items. 

While I can sell a TON of cards with ads, by the time I pay for clicks, my ROAS goes down, BUT I used this as another strategy to get sales up for overall shop growth because Etsy takes things like that into consideration for shop health, which can be a great long-term goal.

How do I Make the Ads Work?

First, understand that Etsy ads only ENHANCE the current results you’re getting on the platform.  If you’re not making organic sales already, you’re not ready to start incorporating ads into your marketing strategy. 

Before you get started with ads, you need to optimize your Etsy shop to be sure that you can maximize your dollars spent on ads. 

Here are some Etsy Basics:

1. SEO is key

• tools for checking Etsy keywords: marmalead, erank, keywordtooldominator, keysearch.co

• using Etsy search to find keywords

  2. It’s important to complete every description field Etsy gives you for a listing 

  3. High-quality images are essential 

Troubleshooting Your Etsy Strategy

If views are low: Revisit tags and titles to make sure you’re appearing in relevant searches.

If clicks are low: Make sure that your images are awesome and your price point is competitive.

If sales are low: If you’re getting lots of views and clicks, but no sales, make sure you’re giving the shopper enough information so they feel confident buying from you.