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Do Etsy Ads (Really) Work? Here Are the Facts

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Advertising your shop is only one of many different strategies that you should adopt as a small business owner on Etsy.com.

Whether that is through a preexisting following that you have on social media, through third-party ad agencies or through Etsy itself, getting the word out about you and your project is crucial to success in your store.

Do Etsy ads really work?

All Etsy Ad success varies per shop. However, it is better for well-established shops to invest in paid advertising than someone who just started less than six months ago. The better you are at SEO product descriptions, the better your search results with Etsy Ads will be.

While many Etsy stores already have hundreds, if not thousands, of devoted fans, the majority of Etsy shops are brand new and will need to build a following over time.

Word of mouth is an incredibly powerful tool in your arsenal, but so is hiring and paying a small fee for advertising to your shop.

How Do Etsy Ads Work?

Before September of 2019, there were different kinds of ways to advertise your shop and listings on Etsy.com: Google Shopping and Etsy Promoted Listings.

Etsy Promoted Listings & Google Shopping were paid on a bidding basis – i.e., you choose how much you’d be willing to pay on a single click of your listing ad.

Etsy Ads operates in the same way, allowing you to promote your listings on both Etsy and Google with a bid of how much you want to pay per click with a max of your budget per day.

An Example of Etsy Ads

Let’s say you sell handmade scarves and are charged up to a max of $.05 cents per click with a maximum daily budget of $10.00.

That means you will pay for a max of 200 clicks a day through Etsy promoted listings – if you get that many clicks.

If only 100 people click on your ad per day, you will only pay $5.00, etc.

Bidding Fluctuates Over Time

Your initial bid for how much a click will cost is shop-wide, where Promoted Listings used to be different per item you chose. Instead, your most popular listings are prioritized by an algorithm that leads customers to click on your shop.

However, one important thing to realize is that Etsy now also uses an algorithm to determine how much you should pay per click to increase revenue.

This does NOT change your daily limit – for example, your daily limit will stay $10.00, but your pay-per-click price may fluctuate from $.05 to any other number that Etsy’s algorithm deems effective.

The more popular you are (or, the more money you spend on Ads), the more likely you are to be seen by customers searching “handmade scarves.”

How Much Does it Cost to Run Etsy Ads?

The great thing about Etsy Ads is that you bid to decide how much you want to pay per ad.

You could pay $.02 cents per click of your ads or $.10 cents per ad! It is entirely up to you and your shop budget.

However, because Etsy Ads is a bidding system, all those shops that sell “handmade scarves” that bid higher than you each click are going to be seen more than you.

If you bid $.02 cents per click, the seller who is paying $.Thirty cents per click will definitely be seen first.

Don’t be discouraged, though! There are other ways to be better seen with Etsy Ads than paying more.

Am I Guaranteed to Make more Money with Etsy Ads?

If you’re looking to invest in Etsy Ads, you probably worry that you’ll pay more for ads than you will see revenue come in from their publicity.

This is definitely a worry for brand new shops that have barely any sales and no online following. If you pay $10 per day and don’t sell any scarves, you may run into some financial troubles and end up owing Etsy money.

Furthermore, shops that have good reviews and a powerful presence in the Etsy community are more likely to make money off of their ad revenue – even if they pay much less.

This all means that making money off of Etsy Ads is no guarantee, and it can take time before you build an audience and loyal following enough to rise above your expenditures.

New Etsy Shops & Ads

So how are you supposed to boost your new Esty shop with Etsy Ads, then? If good reviews and higher bidding prices are what get clicks, how do you stand out?

Well, many Etsy shop owners highly recommend waiting until your Etsy shop has been in operation for six months or so. This allows you to try and grow your following on your own to save yourself some money.

Plus, the listing quality of your goods will increase the more that you sell. This increases the likelihood that Etsy Ads will put your listings toward the top of the list for “handmade scarves” (or whatever you choose to make) for less bidding prices.

IF, however, your shop still has not grown much over six months before you start advertising, it is possible you will take a few losses on bidding for ads each month until your shop picks up.

It is up to you how you want to spend your money, and while ads might help get views to your shop, no revenue is guaranteed.

What Numbers do Sellers Typically See from Running Etsy Ads?

Concrete numbers for how Etsy Ads can help your shop vary per person.

While one seller might invest $1.00 maximum per day, another seller might invest $50.00 per day to try and see results on their site.

This makes it very difficult to narrow down exactly what you would get should you start using Etsy Ads.

Let’s break it down a little though:

A Profit Scenario

For instance, if you give yourself a max of $5.00 per day at $.02 cents per click, you can have a maximum of 250 clicks on your ads per day. That’s 7,000 maximum clicks per 28 days (accounting for 28 days in February).

Now let’s say only 20% of people who search for your product (ex: handmade scarves) click on your ads over the whole month. That would be 140 people, and you’d be charged $2.80 for those clicks.

Remember, you only pay for the clicks you get!

If you make 5 sales out of those 140 people in a whole month on handmade scarves at $10.00 per scarf, you would see a profit on your ad investment of $47.20 for that month before listing fees, transaction fees and other fees that Etsy charges to its shops.

A Loss Scenario

Let’s use the same model that we used in the profit scenario but estimate the calculations of a loss.

Say you have 200 listings, and 500 people clicked on your ads, but you didn’t sell a single product all month.

If that’s the case, you are out the $4.00 for your listing fee (which is $.20 cents per listing) plus the $10.00 for Etsy Ads. That means at the end of the month, and you owe $14.00 to Etsy.com without making any money.

While many people feel that this isn’t that big of a loss, large Etsy shops with thousands of listings or very high Etsy Ads bids do tend to have major losses at the end of a bad month.

Consider your budget and how the numbers will affect you in both situations!

Can You Advertise on Etsy Without Paying?

You can’t advertise on the Etsy site without paying some sort of fee – whether that is through Etsy Ads or by paying to be listed on the “Featured” page.

However, Etsy has a lot of articles, blog posts, and tools to help you market yourself to social media platforms like Facebook, Instagram, Twitter, and more.

These helpful guides are free to access even if you don’t sell on Etsy and give general information and market insights into how to promote yourself on your own.

However, if you want to create revenue from advertisements, those will all have to be paid for.

For more information on ad sales and Etsy Plus, check out our article Does Etsy Plus Help Sales? Here’s What to Expect.

When is it Generally a Good Idea to Test Etsy Ads?

As we mentioned before, Etsy sellers recommend that you wait before starting Etsy Ads right away.

Even though you are paying for exposure, having a lower star-rating, or being brand-new to the site will hurt you in the end. You’re more likely to come up empty each month than boost your sales.

If you already have an online following, you should post to your personal sites first and spread the word. Word of mouth on the internet spreads like wildfire – host days where your fans post pictures using your stuff and then go like their pictures!

Once you have waited a little while after starting your Etsy store – generally after the first six months – you can start to explore the world of Etsy Ads.

This is more effective if you have already made a few sales and have great reviews on those sales before starting ads.

If you don’t want to wait, then go for it! Just don’t expect a major boom. Those are super lucky – and have happened – but may not happen for you. You may have to take a few losses before your shop takes off.

What is Etsy Plus?

Etsy Plus is a paid plan you can get on Etsy.com when you open up your shop.

For $10 a month you can get:

  • Better shop customization and templates
  • Save 50% on a custom web address to send to customers
  • Create an email list of your customers and reach out to them with special sales or updates
  • You can receive 15 listing credits and $5.00 credits in Etsy Ads monthly

You don’t have to use Etsy Plus to start your shop – and can upgrade at any time.

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