Beginner's Guide to Etsy Ads

Published on: February 16th, 2023

Reading Time: 6 Minutes

Looking for ways to increase your Etsy sales and grow your customer base? Does promoting on social media not drive enough traffic to your Etsy shop? If you answered “yes” to both of those questions, it may be time to explore Etsy Ads.

How Etsy Ads work

Etsy offers sellers two ways to advertise. “Offsite Ads” are just that. Etsy advertises listings throughout the web. (We’ll provide a link here at the end under Resources to learn more about them.) Today we have an overview of its onsite-ad program, Etsy Ads. These are ads that appear on Etsy’s own platform.

Etsy Ads place your relevant listings in an Etsy shopper’s search results. When they appear in search, your advertised listings will have “Ad by Etsy seller” displayed beneath each item’s price.

Etsy uses an auction system to select which products are advertised to shoppers. This system automatically creates a bid for each of your advertised listings. These listings will then compete with other listings for an ad spot.

Where and how often your advertised listings appear in search results depends on several factors.

Budget
Listing Quality Scores
Competition

Your budget is the main determinant of how frequently the algorithm places your ads. You can set your budget using your Etsy Ads dashboard. (We’ll have more about that later.) If you set your budget low, you may not see an increase of views and visits from your advertised listings. The higher your budget is, the more traffic your shop should get from ads.

Your listings’ quality scores also help determine how often your items are advertised. Listing quality scores are a metric Etsy doesn’t disclose. They are calculated using a variety of factors. We do know these include how often a listing is clicked, favorited, and leads to a purchase. Five-star reviews, compelling images, and SEO also impact an item’s ad placement. If your listing is performing well organically, it probably has a good quality score.

Finally, the amount of competition your listings have will affect their ad placement. If there are many shops advertising items just like yours, you may find it difficult to gain ad traffic.

How to set your Etsy Ad budget

When you start, Etsy itself limits your maximum daily Etsy-Ad spend to $25 USD. It operates like a line of credit. Etsy has an automated internal system that evaluates it. So, your daily limit can change day to day! The system looks at how much you’ve been spending on ads and whether or not your full budget is being utilized. It also uses your billing history and current payment account status to decide whether to change your budget limit.

If you want to increase your limit, Etsy suggests setting your daily budget to the maximum spend it allows, $25. Then, if you regularly deplete that amount, Etsy will gradually increase your daily limit.

Not sure if Etsy Ads are right for your products? Set your daily budget low! Take it slow. Investing $1-$5 a day may not get you many extra sales. However, it can show you which of your items appeal most to shoppers. And that’s useful to know!

Select which products to advertise

You don’t have to advertise all your listings! To start, many Etsy sellers choose to only advertise their products that already perform well organically. For one thing, these listings likely have higher quality scores. And as we mentioned, the higher the quality score, the more it gets shown to shoppers.

Another consideration is Search Engine Optimization (SEO). Why pay to have your product shown to shoppers searching for something else? This may result in views but no purchases. A shopper might click out of curiosity, but then resume their search for what they came to buy. So, before advertising a product, get its SEO as sharp as you can.

Be patient!

After you’ve set a daily budget and chosen your listings to advertise, Etsy recommends waiting at least 30 days before making any changes. This gives you time to observe which products shoppers are clicking on and purchasing the most. Use this information to adjust your budget and curate your advertised listings accordingly.

How to use your Etsy Ads dashboard

Use your Etsy Ads dashboard to monitor your advertised listings. To access it, go to your Etsy dashboard and select the Marketing tab on the left. Then, select Etsy Ads.

Use the graph to view your ad stats

You can view your ads’ total Views, total Clicks, total Orders, total Revenue, and your total ad Spend over time. This is especially useful while you are determining your budget and which listings you should advertise. Thereafter, review your ad stats once a month. This offers a personalized way to spot changes in shopping trends over time.

Manage your budget and advertised listings

Use the beige section in the middle of the dashboard to adjust your daily ad budget and advertised listings.

Select “Manage advertised listings” to view detailed ad stats for each advertised listing. This makes it easy to see which listings are performing well and which ones may need to be improved.

If you select “Search terms” below any listing, you’ll discover what keywords brought shoppers to your products.

See an unfamiliar word or phrase? Select “Ad glossary” in the top right corner to find out what it means.

Orders brought in by your ads

Use this section to view all the orders brought in by your ads during a specified period of time. The left column displays the advertised listing each customer clicked.

The column on the right displays the item that each customer purchased.

Tip! eRank’s ROI Calculator helps you evaluate the performance of your Etsy Ads campaign. Use it to assess how well your ads are performing and to make the right decisions to achieve your sales performance goals.

Done right, Etsy Ads are useful for attracting new customers and garnering more sales. Invest some time into further reading about Etsy Ads (see Resources, below). Have patience; start slow; observe how they work. Doing so will be worth it. You will learn to shape a custom ad campaign optimized for your budget, listings, and shop. That skill will be an asset as you continue to grow your business.