Etsy Ad Experiment: Did These Sellers Profit?

Table of Contents

1. Introduction
2. Background on Etsy Ads
3. The Experiment: Participants and Budget
4. Goals and Tactics for Running Ads
5. Did We Make a Profit?
6. Gathering Keyword Information
7. Impact on Shop Recognition
8. Effect on Listing Quality Score
9. The Myth of Increasing Organic Sales
10. Tips for Running Etsy Ads
11. Conclusion

Article

Introduction

In this article, we will delve into the realm of Etsy Ads and explore the results of a month-long experiment that involved five Etsy sellers, including myself. We will discuss the changes in Etsy Ads and why they may not be as effective as they once were. Additionally, we will provide insights on what to watch out for and what not to do when utilizing Etsy Ads.

Background on Etsy Ads

For those unfamiliar with Etsy or are new to the platform, Etsy Ads is an advertising feature that allows sellers to promote their products within the Etsy marketplace. In the past, Etsy Ads functioned differently, giving sellers more control over their cost per click and allowing them to determine their advertising budget. However, the current system in place has proven to be less effective for many sellers, including myself.

The Experiment: Participants and Budget

To gain a deeper understanding of the effectiveness of Etsy Ads, I conducted an experiment involving five Etsy sellers. I enlisted four sellers from my Eshop Success Program, all of whom were experienced in running ads and had established shops. Each participant was given a budget of $100 to spend on ads. In addition, I personally set a daily budget of $20 for my shop.

Goals and Tactics for Running Ads

When running an ad campaign, it is crucial to have defined goals and tactics in mind to gauge its success. While there are 14 stated goals for running Etsy Ads, for the purpose of this experiment, we focused on four key aspects:

1. Making a profit
2. Gathering keyword information
3. Boosting shop recognition
4. Improving the listing quality score

Did We Make a Profit?

The results of the experiment revealed that, overall, we did not make a profit from our Etsy Ads campaign. In fact, the total amount spent on ads by all participants combined was $783.02, while the total revenue generated from sales amounted to only $280.54. This significant discrepancy highlights the potential financial risks involved in running Etsy Ads.

Gathering Keyword Information

One of the objectives of the experiment was to gather valuable keyword data from the ads that could be used to optimize other listings. However, the keyword information obtained from the ads proved to be less useful than anticipated. Etsy's system often displayed ads for irrelevant searches, causing us to disable those keywords. This, in turn, slowed down the ad display process. While this feature may have its benefits, it is important to note that it does not guarantee an improvement in organic sales.

Impact on Shop Recognition

An additional aspect we examined was the impact of running ads on shop recognition. Ideally, running ads would result in increased visibility and exposure for the shop, leading to more sales. However, Etsy recently removed the feature that displayed the shop name in ads, reducing the potential branding benefits. This change diminishes the effectiveness of running ads solely for the purpose of boosting shop recognition.

Effect on Listing Quality Score

Running ads with the intention of improving the listing quality score is a common strategy employed by sellers. The idea is that selling listings through ads will increase their quality score, leading to more organic visibility. Unfortunately, the results of our experiment did not align with this notion. While we observed consistent ad-driven sales during the campaign, once the ads were turned off, the sales flatlined. This indicates that Etsy Ads may not necessarily result in a lasting positive impact on listing quality and organic sales.

The Myth of Increasing Organic Sales

Contrary to popular belief, running Etsy Ads does not guarantee an increase in organic sales. Despite the many claims that ads can boost sales in the long run, our experiment demonstrated otherwise. It is crucial not to rely on Etsy Ads as a surefire method for promoting your shop and achieving ongoing sales growth.

Tips for Running Etsy Ads

Based on our experiment and experiences, here are some tips to consider if you decide to run Etsy Ads:

1. Set realistic expectations for sales.
2. Advertise products with a higher price point to maintain a profit margin.
3. Regularly check and update your ad keywords to filter out irrelevant searches.
4. Monitor your traffic and consider allowing some tangentially related keywords if they result in increased views and sales.
5. Keep in mind that running ads may not necessarily lead to organic sales growth.
6. Calculate your costs and profit margins to ensure ads are financially viable.

Conclusion

The results of our Etsy Ads experiment shed light on the current state of Etsy Ads and its effectiveness. While some sellers may experience success with ads, it is important to approach them with caution and a thorough understanding of the potential risks involved. By setting realistic expectations and carefully managing your ad campaigns, you can make informed decisions about whether Etsy Ads are the right fit for your shop's marketing strategy.