Are Etsy ads worth it?
If you’ve ever asked this question, you’ve come to the right place.
There are many ways to promote your Etsy shop, but Etsy ads are proven effective for increasing profit if you do it right.
I created this guide to discuss everything you need to know about Etsy ads. I’ll give you valuable information to help you decide whether Etsy ads are for you and how to maximize them.
Are Etsy Ads Worth It?
Etsy ads can be worth it if you sell expensive items with high profit margins.
How do you determine your profit margins? Track the revenue from each item you’ve sold in a specific period and subtract all the costs involved in selling each item, including how much you spent making each item. The result would be your net profit.
You should also include these Etsy seller fees in your calculation.
Etsy listing fees
Transaction fees (includes currency conversion fees if you use Etsy Payments and list your items in a currency different from your payment account currency)
Payment processing fees (using Etsy Payments)
Subscription fees (if you subscribe to Etsy Plus)
Etsy marketing fees (on-site and off-site ads)
Note: Etsy ad fees are different for each seller. I will discuss advertising costs on Etsy in detail later, so keep reading.
If your calculations show that you have high margins, running Etsy ads (whether on-site or off-site advertising) can be worth it. High margins generally mean you have more money to spend, which means you have the budget to run ads on your listings.
On the other hand, if you sell inexpensive items with low margins, you likely have less disposable money to spend on Etsy ads which may lead to increased sales.
If you sell inexpensive items, you could spend $1 to $2 daily on Etsy ads and make only the same amount back. Thus, it wouldn’t be worth it.
Meanwhile, some sellers consider Etsy ads worth it because of the data they provide, especially to those running ads for the first time.
Let’s say you’ve never run ads on Etsy before, and you run ads on all your listings for at least 30 days to test the outcome. You’ll receive a treasure trove of ads data after those 30 days, whether or not the ads resulted in a positive ROAS (Return On Ad Spend).
With the data you get from your test, you can determine whether to run ads on more or fewer listings or stop running ads altogether.
The Types of Etsy Ads
As an Etsy seller, you can run two types of ads. I will discuss both.
Onsite ads promote your shop and listings on the Etsy website and mobile app.
Etsy also displays your listings prominently on shoppers’ search results. The platform displays your listings based on search quality and listing relevance—among other factors.
You can tell a listing is an ad by the “Ad by [ShopName]” tag at the bottom.
Etsy sellers pay for onsite ads to reach shoppers already browsing on Etsy.
Source: Etsy Seller Handbook
Offsite ads are listing ads on third-party platforms. Etsy takes a listing and promotes it on the marketplace’s official off-site ad channels.
Google Display network
Etsy’s Publishing Partners (Buzzfeed, Better Homes and Gardens, Lyst, etc.)
Are Etsy offsite ads worth it? There are some things to consider.
Offsite ads are fantastic for reaching people outside Etsy’s ecosystem. However, people may ignore your ad if they don’t shop on Etsy.
How Do Etsy Ads Work?
Before I can teach you how to advertise on Etsy, you must understand the Etsy Ads system.
Advertising on Etsy works via a bidding system.
You participate in ad auctions with other sellers, and your listings compete against other listings for the paid advertising space on Etsy search results.
Etsy uses what the company calls a sealed bid generalized second-price auction system.
Under this system, Etsy places bids for ad space on your behalf. The bids Etsy places are based on the daily budget you set.
The cost and placement of bids will vary according to several factors, including:
Ad auction prices can increase if more participants (your competitors) are in the auction.
Listing QualityThis factor refers to optimizing your listing, including the title, description, tags, the quality and number of listing photos, and even listing videos.A low-quality listing can result in higher auction prices, meaning you must optimize your listings to lower the cost of your ads.
This factor refers to the relevance of your listing to the users’ search queries. If you’re targeting a specific keyword in your listing and a shopper searches for that keyword, there’s a high likelihood that your ad for that particular listing will show up in the shopper’s search results.
Likelihood of Views or Sales
This factor refers to the likelihood that shoppers will see your ads in search results and the likelihood they will purchase from those ads.
Unfortunately, Etsy doesn’t explain how the platform calculates this metric and factors it into auction prices.
Ad Ranking Factors
Etsy will display your listings as ads on the website and mobile app according to four factors similar to those I discussed above.
Your maximum daily budget
Likelihood of views or sales.
How Do Offsite Ads Work?
If you’re about to run ads on Etsy for the first time, you don’t have to do anything to participate in offsite ads. Etsy automatically promotes all your listings on the platform’s official offsite ad channels.
Etsy sends all your listing info (titles, descriptions, photos, keywords, etc.) to their partner sites and advertises listings according to which ones perform best on each site.
Etsy has advertising experts working with partner sites to ensure the sites show only the most relevant listings to each user or search query.
Can you opt out of offsite ads? It depends.
Etsy automatically enrolls all sellers in offsite ads. You can choose to accept or decline participation based on the following conditions.
If your shop made over $10,000 in the last 365 days, Etsy will require you to participate in offsite ads for your shop’s entire lifetime on the marketplace. Etsy will give you discounted advertising fees.
If your shop made less than $10,000 in the last 365 days, you can opt out of offsite ads.
Etsy says they look at each seller’s sales monthly and will require any seller who has made over $10,000 in 365 days to participate in offsite ads.
Advertising Charges or Fees
Etsy doesn’t charge you for every instance your ad appears on search results.
Under the bidding system, the marketplace charges you on a cost-per-click (CPC) basis.
I will discuss CPC in more detail later, but here’s the gist: Etsy will only charge you each time someone clicks on your ad. However, Etsy won’t charge you more than your daily budget.
For example, your daily maximum budget is $2, and you have one ad with a CPC of $0.20. If this ad gets ten clicks in one day, Etsy will no longer show that ad on search results.
How Much Do Etsy Ads Cost?
“How much are Etsy ads?” is something you must determine if you plan on running ads on this popular marketplace.
The costs of onsite and offsite ads differ, and you must consider each one.
Cost of Onsite Ads
Enter: cost per click.
Cost per click (CPC) is a necessary term to know when running any online ad campaign.
Cost per click measures the amount you spend every time a customer clicks on your ad. It determines how much profit you get on your Etsy advertising campaign.
Generally speaking, Etsy charges anywhere between $0.20 to $0.50 per ad click. The cost isn’t too bad when you compare it to other platforms.
Here’s how Etsy advertising costs compare to paid advertising on other platforms.
Google – $2 to $4
Facebook – $0.42 to $3.89
Instagram – $0.40 to $0.70
TikTok – $1 or less (depends on the campaign)
Running ads for your Etsy store can be economical if you play your cards right. How much your Etsy ads cost will also depend on the following:
How compelling are your ads
The volume of your target keywords
Consumer and shopper behaviors over time
External factors you can’t control
Cost of Offsite Ads
Unlike onsite ads, offsite ads don’t have a cost-per-click calculation.
Offsite advertising costs depend on your Etsy revenue in the last 365 days.
If your shop made less than $10,000 in the last 365 days, Etsy will charge you a 15% fee for any order from an offsite ad.
If your shop made $10,000 or over, Etsy will charge you a 12% discounted fee.
How does Etsy know which orders come from offsite ads?
Etsy will attribute an order to an offsite ad if the buyer clicks one of your offsite ads promoting a listing and visits your shop within 30 days to purchase the item on the listing
Reminders for Offsite Ads
The offsite advertising fee is based on the amount you made from the sale before applying the advertising fee.
The maximum offsite advertising fee is $100, regardless of the total amount you make for an order from an offsite ad.
If your shop currency isn’t in US dollars, Etsy will convert your order amounts to US dollars using the exchange rates at the time the platform processed the sale.
Etsy reviews sales figures monthly to determine the appropriate rates for each seller.
Etsy will only charge you an offsite advertising fee if the shopper clicks on the offsite ad and purchases from your shop within 30 days. If the shopper only clicks but doesn’t purchase, Etsy won’t charge you.
When Should You Advertise Etsy Listings?
The value of Etsy-promoted listings depends on how you use them.
Here are ideal instances for running Etsy advertising campaigns.
1- When You’re Building a Marketing Funnel
Are Etsy-promoted listings worth it for marketing funnels? Yes, they can be great tools for marketing funnel development.
It’s understandable to want immediate sales. However, you must cultivate your market before urging them to buy.
You must guide people through the four phases of their customer journey:
This stage is when potential buyers learn about your Etsy shop or brand. Shoppers might not buy immediately, but they will have you in mind.
When running Etsy advertising campaigns, choose “reach new buyers” or “bring more traffic to my shop” as your goal when setting up your Etsy ads.
Try getting them to sign up for your newsletter by adding an opt-in link to your Etsy store. You can put an easy-to-remember link on your Etsy shop banner or in your description.
People already have a bias toward your shop at this stage. Potential buyers will likely check your store and look at your products often.
This stage is where you start making sales from your Etsy ads.
This phase is every Etsy seller’s dream.
You can get repeat sales from customers loyal to your brand or Etsy shop.
Consider using Etsy ads to build credibility if you’re still trying to develop your brand. Promoted listings can be an excellent long-term investment if you prioritize the customer journey.
2- When You Have a Favorable ROAS
Return on ad spend (ROAS) is another term you should know. This metric is the profit you earn from running ad campaigns for your listings on Etsy.
Your ROAS is the ratio of total revenue earned from your ads and your advertising budget.
For example, a 4.2 ROAS means you get $4.20 back for every ad dollar spent.
The Etsy ads system measures your profit from promoted listings. You can quickly determine how much Etsy ads cost and whether they work to your advantage. Make changes or stop advertising when a listing starts losing money. It’s not worth paying for ads that don’t have positive ROAS.
The goal of advertising should always be to get more sales. Your ROAS should always be positive.
Measure your ROAS as often as possible. There’s no magic number to ROAS, but a high number should always be the goal. You should ideally make at least $2 for every ad dollar spent.
3- When You Have Disposable Ad Budget
Etsy sellers should never spend money they don’t have. Don’t be tempted to pour money into ads when you don’t have the budget. Avoid paying for ads when you can’t afford them.
Learn how to taper your risks and be more prudent about spending your money.
When you’ve made a decent profit, pour some money into ads. Feel free to increase your daily budget once you see the effectiveness of your ads.
How To Set Up Etsy Ads
Setting up Etsy ads is straightforward. Here’s how.
1- Sign in to your Etsy seller account.
2- Choose Shop Manager.
3- Click Marketing.
4- Click Etsy Ads.
5- Set your daily budget or the maximum amount you want to spend on ads for your entire shop daily.
Etsy lets you choose from three default budget amounts.
6- If none of these amounts fit your preferred budget, click Choose a different amount.
7- On the box under Choose a different amount, you can enter your preferred amount (between $1 and $25) as your daily budget.
8- Click the Start advertising button.
How To Change Your Daily Ad Budget
Here’s how to change your Etsy ad daily budget.
To change your daily budget:
1- Sign in to your Etsy seller account.
2- Choose Shop Manager.
3- Click Marketing.
4- Click Etsy Ads.
5- Choose Manage your budget.
6- Enter your new preferred daily budget.
7- Click the Save changes button.
Minimum and Maximum Daily Budget Amounts
The minimum daily budget you can set is $1.00, but you can change this amount at any time.
If it’s your first ad campaign, the maximum daily budget that Etsy allows is $25. All sellers running ads for the first time have the same allowable maximum.
According to Etsy, the platform recalculates a seller’s maximum daily budget weekly if the seller is an Etsy Payments user and monthly if the seller isn’t.
When recalculating your maximum budget, Etsy considers various factors, including your average ad spending and payment history.
Etsy will only increase your maximum allowable budget if you consistently spend it in full daily.
How To Set Up Etsy Ads for Specific Listings
When you run an Etsy Ads campaign for the first time, Etsy advertises all your listings by default. However, you can edit which listings to advertise.
Here’s how to choose the listings you want to run ads on.
1- Sign in to your Etsy seller account.
2- Choose Shop Manager.
3- Click Marketing.
4- Click Etsy Ads.
5- Scroll down and click the Manage advertised listings tab.
6- Look for the listings you want to start or stop running ads on. You can manually search through all your listings or filter them.
7- Toggle the slider under Ad on/off to add or remove the listing from your campaign. A check symbol (✓) in the slider means the ad for the listing is on, while an X mark in the slider means the ad for the listing is off.
You can also add or remove the ads for multiple listings in your campaign simultaneously.
To add or remove multiple listings simultaneously, tick the boxes to the left side of all listings you want to add or remove.
Go to the Turn listings dropdown and set it to On to add the selected listings to your campaign and Off to remove them.
Click the Update button to the right of the Turn listings dropdown.
Note: You can add or remove listings from your campaign at any time.
How To Set Which Countries Can See Your Ads
Etsy will only show your ads to the countries where you ship your products.
Here’s how to add or remove countries you ship to if you use shipping profiles.
Sign in to your Etsy seller account.
Choose Shop Manager.
Choose Shipping settings from the list.
Click Shipping profiles
Click Edit (the pencil icon) on the shipping profile you want to update.
Find the Where I’ll ship section and click the Edit button to the right.
Etsy arranges all countries according to these seven regions.
Australia, New Zealand, and Oceania
Latin America and the Caribbean
North Africa and the Middle East
Find the country you want to add or remove by clicking on the appropriate region’s dropdown button (the icon that looks like a triangle pointing up).
For example, if you want to add or remove Japan from your profile, click on the dropdown for Asia Pacific.
Click Save Profile when you’re satisfied with the list of countries in the profile.
4 Tips To Optimize Your Etsy Ads
Here are four tips to maximize your daily ad budget.
1- Try Organic Marketing.
There’s beauty in getting sales without paying for a listing ad. Try getting some organic sales before running an ad.
You can try these organic marketing ideas.
Perform Etsy SEO on Your Product Listings
Optimizing your shop for Etsy SEO can increase your visibility on organic search results.
Etsy changed its algorithm in May 2022. Optimizing for Etsy SEO can take time and effort, especially if you’re not well-versed in SEO.
The important thing is to do keyword research and find relevant keywords to increase your visibility on Etsy search results. Using keyword research tools can help you.
Use Etsy SEO tools like Etsyhunt or EverBee to conduct keyword research and improve your visibility and ranking on Etsy.
Etsyhunt offers more than just keyword research. Its Product Research feature can help you find the best and most profitable products for your niche, and the Shop Analyzer can provide valuable insights into Etsy’s most successful stores.
The best thing about Etsyhunt is its low cost, making it ideal for Etsy beginners. Etsyhunt’s free plan is free forever but has limited daily searches. The tool’s paid monthly plans start for as low as $3.99 monthly.
Like Etsyhunt, EverBee helps with product and keyword research.
This tool also has a Tag Analyzer feature that provides insights into the tags you use in your listings and your competitors’ tags.
EverBee is another affordable Etsy seller tool. Its Hobby plan is free forever, and paid plans start for as low as $7.99 monthly.
Promote Your Products on Social Media
Post organic content to showcase your products on platforms like Facebook, Pinterest, Instagram, and other social media platforms.
Create a Blog Page
People like reading online content. Creating a blog page is an excellent way to appear on Google results.
Start a Newsletter
A newsletter allows you to communicate with leads and existing customers through email. You can inform subscribers about new products, upcoming sales, and other promotions.
Don’t stop promoting your shop using your most effective organic strategy, especially when you get significant organic sales.
The path to Etsy success is combining organic marketing strategies with onsite and offsite ads.
2- Put More Ads on Your Best-Selling Listings.
Maximize your daily budget by being as deliberate as possible with your ad placement. Measure the sales and ROAS of each ad and increase resources for those with the best results.
Visit your shop manager often and take note of your ad budget. Keep them on a spreadsheet or anywhere you can measure and record your performance.
When you run ads on Etsy, some will naturally perform better than others. You can boost ad sales by spending more on higher-performing ads.
The maximum daily budget for Etsy ads is $25. You can transfer the daily budget from low or non-performing ads to high-performing ones.
3- Promote New Listings Frequently.
Freshness matters when running ads. Etsy ads decay over time as more people see them. As such, shop owners like you should always advertise new listings.
4- Optimize Your Image and Title.
When running onsite ads, give advertised listings a facelift by changing the images or titles.
A high return on your ad spend depends on how well you optimize your promoted listing’s image and title. Ensure your listing attracts people to visit your shop.
If an ad isn’t working, you might get better results by creating a more enticing graphic or title. Encourage shopper clicks by adding keywords like “great deal!” or “free shipping” on your title or image.
Stop promoting ads you’ve tried to optimize several times but still haven’t seen results. A part of any advertising strategy is knowing when to stop running specific Etsy ads.
Frequently Asked Questions (FAQs)
What Is the Best Etsy Ad Strategy?
Choosing listings with the highest conversion rates is an optimal Etsy ad strategy.
Etsy wants to show visitors products they are likely to view and purchase. Thus, Etsy’s algorithm considers a listing’s conversion rate to determine its position in search results.
Maximize your ads by promoting your highest-converting listings.
Check your orders and look for the listings with the highest sales. Calculate the conversion rates of a listing by dividing its total number of sales by its total number of visits for a specific period, then multiply the answer by 100 to get a percentage result.
[Total sales ÷ Total visits for a specific period (ex., 30 days)] x 100 = Conversion rate
You have a listing with 10 successful sales and 200 visits in 30 days. The conversion rate of this listing is 5%.
10 sales ÷ 200 visits = .05 x 100 = 5% conversion rate
Start your strategy by running ads on ten of your highest-converting listings. Adjust accordingly once you see results, whether positive or negative.
The time it takes to see results on Etsy ads depends on various factors, but I recommend waiting approximately one to two weeks.
Is It Better To Advertise All Listings on Etsy?
Etsy recommends that sellers run ads on all their listings for at least 30 days if it’s their first time running ads to give Etsy Ads sufficient time to collect data.
However, each seller is different, and this strategy may not work for everyone, especially those who just opened their Etsy business and have a limited ad budget.
Some sellers on Etsy have found success without running ads. You can consider running ads on all your listings if:
You’ve earned money selling on Etsy without running ads but now want to try it.
You are an established seller with the budget to run ads on hundreds, if not thousands, of listings.
Running ads on all your listings wouldn’t be wise or cost-effective if you don’t have a limited budget for Etsy ads.
What Is the Best Etsy Ad Budget? How Much Should I Spend on Etsy Ads?
No “best” ad budget applies to all Etsy shops.
Etsy recommends a minimum daily ad budget of $3 to $5 and running ads on all listings for at least 30 days if it’s your first time.
However, this budget may not apply or be realistic for all Etsy sellers, especially beginners with limited resources.
The ideal ad budget depends on how much you are willing to spend since not every seller on Etsy has thousands or even hundreds of dollars to spend on ads monthly.
If you’re a new seller with little money, you can start with a minimum daily budget of $1 to $2 for 30 days. Adjust your budget and strategy according to the results after thirty days.
What Etsy Ads Stats Should I Check?
Etsy has a specific guide discussing how to review ad performance, including the significance of each metric.
To help you avoid getting overwhelmed with too much information, here are all the crucial details on Etsy advertising stats you must know.
Etsy counts one ad view for each instance your listing appears as an ad on the marketplace.
The number of ad views provides a clear idea of how many Etsy shoppers saw your ads when searching for similar products. A high number of ad views naturally means many shoppers saw your listings.
If you see a high number of ad views but only a few clicks, it means you may need to tweak your listings and improve certain elements.
Note: Etsy doesn’t charge sellers per ad view, so don’t worry about views adding to your Etsy ad cost.
An ad click is when a shopper clicks on one of your on-site Etsy ads to view your listing.
The number of clicks shows you how many people interact with your ad.
Views vs. Clicks
An ad view is each instance your listing appears as an ad in search results. Meanwhile, an ad click is each instance a shopper clicks on your ad after seeing it in search results.
This metric measures the rate at which shoppers or potential customers click your ads after seeing them in search results.
Click rate is the percentage of shoppers who see your ads in search and click them.
For example, if you have one ad with 200 views and ten clicks, the ad’s click rate would be 5%.
(10 clicks ÷ 200 views) x 100 = 5% click rate
A high click rate means more people interact with your ads after seeing them in search results. Meanwhile, a lower click rate means you might need to update or optimize your Etsy listings.
Orders from ads
An order is when a shopper orders your product after clicking its corresponding ad.
When a shopper clicks an ad and purchases the product within 30 days, it counts as an order from the ad.
A high order rate means a well-optimized and well-performing ad. If an ad has a low order rate, consider updating the listing or removing the ad for it altogether.
Revenue from ads
Revenue from ads measures how many sales you got from shoppers who clicked on your ads and purchased the listed products.
When a shopper clicks an ad and purchases the listed product within 30 days, it counts as revenue from the ad.
Knowing which ads have the highest revenue helps you determine how to promote your Etsy shop. To maximize your ad spending, you can run ads only on listings with the highest revenue from ads.
This metric shows your spending on Etsy ads (advertising spend) in 30 days.You can also view the total Etsy advertising cost for each ad.
Etsy charges you each time a shopper clicks on one of your ads to view your listing, but each click won’t cost the same.
Several factors affect an ad’s cost-per-click (CPC), including listing quality and competition.
If your CPC is too high, consider improving the quality of your listings by optimizing your listing title and description, uploading higher-quality images, and adding videos to your Etsy listings.
Return On Ad Spend (ROAS)
ROAS refers to the profitability of your ads.
This metric measures your ad revenue against the advertising fee or ad cost. How much revenue do your ads generate for each $1 you spend?
A high ROAS indicates your ad is profitable. According to Etsy, the marketplace’s average ROAS is 2.8%. Your ads are performing well if your ROAS is near the Etsy average. If your ROAS is much higher, your ads are doing extremely well.
What Are Some Etsy Promoted Listings Tips?
Do promoted listings work on Etsy? It depends on your strategies.
Here are some tips to maximize your ads.
Promote your best-selling listings.
Determine which of your listings have the highest conversion rates and run ads on them. You can start with about ten listings and work your way up once you see results.
Optimize your listings.
Listing quality can affect your ads’ cost-per-click (CPC) since Etsy sets a higher CPC for low-quality listings.
Improve the quality of your listings and lower your CPC (thereby lowering your ad spending) by optimizing the titles and descriptions of your Etsy listings, adding relevant tags, including more relevant and higher-resolution images, and adding videos.
Do more of what works.
Wait a few weeks (up to 30 days) to see the results of your ads and adjust as necessary. Keep running ads on the listings that perform, and consider turning off those that don’t.
Keeping an ad running even when it isn’t performing well only wastes time and money.
Do Etsy Ads Increase Sales?
Yes. Running Etsy ads can result in more sales, but it’s not as simple as it seems. You can’t just run Etsy ads and expect your sales to skyrocket in one, two, three, or four weeks.
Running ads doesn’t guarantee increased sales and higher profits.
Your revenue and profit margins from Etsy ads depend on many factors, including listing quality, advertising budget, competition in your niche, and seasonality (if you sell seasonal products).
How Do I Turn Off Etsy Ads?
Here’s how to stop Etsy ads (on-site ads)
Sign in to your Etsy seller account.
Visit your Etsy Shop Manager.
Head over to the Marketing tab.
Choose Etsy Ads.
Click the Pause your ads tab under Show more orders.
Click Turn off ads.
How Do I Turn Off Etsy Off-Site Ads?
Here’s how to stop Etsy off-site ads.
Sign in to your Etsy seller account.
Go to Shop Manager
Click Offsite Ads.
Choose Stop promoting my products
Click the Stop promoting my products button to confirm.
What Is Etsy Plus?
You may have seen the name Etsy Plus at one point.
Etsy Plus is a premium service that provides you with various perks. With Etsy Plus, you can get the following:
Advertising credits for 15 listings worth $5
Access to custom web address discounts
Advanced customization on your shop’s profile design
Discounts and perks from Etsy.
You can subscribe to Etsy Plus costs $10 monthly, and have the money taken out of your Etsy Payments account.
The Bottom Line
I hope my guide made determining whether Etsy ads are worth it for your shop easier.
If you want to run an advertising campaign on Etsy, implement the strategies I mentioned to maximize your ad budget.
However, remember that ads don’t guarantee profit. To be successful, you must also learn different ways to make money on Etsy.