How Do Ads Work On Etsy?

Georgi Bosilkov
June 24, 2024

Etsy, a global marketplace for unique and creative goods, has grown significantly since its inception. For sellers, standing out in this crowded space can be challenging. One effective way to increase visibility and drive sales is through Etsy Ads.

What are Etsy Ads, and how do they work?

The term Etsy Ads encompasses two distinct advertising programs available to Etsy sellers – onsite ads and offsite ads. Generally, when people talk about Etsy Ads, they're referring to the formerly promoted listings as Etsy called it back in the days, but we will cover both.

Etsy onsite ads are ads that are run on a PPC (pay-per-click) basis, and are based on a keyword bidding system. These ads enable you to promote your Etsy listings within certain categories or search results, as well as across Etsy itself (such as promoted items within listings, ads that appear on a buyer's home page when they log in, and more), with the highest bidder winning the premium ad slots. You'll need to actively enroll your Etsy listings in this type of advertising.

Etsy offsite ads are commission-based, meaning you pay only if you've made a sale through an ad, not just if a buyer clicks. All Etsy sellers are automatically enrolled in offsite ads, and pay a commission based on their revenue in the preceding 365-day period. Sellers who have made less than $10,000 in sales in the 365 days leading up to the order resulting from the ad will pay a commission of 15%, while those who've made more than $10,000 in that period will pay a fee of 12%. Additionally, the first group can choose to opt out of Etsy offsite ads, while the latter cannot.

What are Etsy Ads (onsite)?

At present, Etsy's ads are in paid automatic mode.

It is a familiar advertising form for Etsy sellers. By setting the total daily budget (the minimum value is $1.00), Etsy will automatically advertise your listings at the right time and place according to its data insights and expertise, so as to get the most visits within the budget.

Etsy ads are displayed based on how well the product's title and tags match the customer's search terms. Your items will be shown throughout Etsy, including Etsy Search, Category Pages, Market Pages on both and the Etsy app.

All Etsy sellers can view the ad performance in Shop Manager.

Where do the Ads show up?

Etsy onsite ads show up primarily among the organic search results on Do a simple search on Etsy and you will see some of the listings have the phrase (Ad by Etsy seller). Those are the paid advertising.

Also they show up on the category page and market pages on Etsy as well.

What are Etsy Ads (offsite)?

Offsite Ads, a new form of advertising launched in 2020. This strategic move was designed to expand the reach of Etsy sellers beyond the Etsy marketplace, allowing them to tap into a larger audience and increase their sales potential.

Where do the Ads show up?

Sellers choose to participate in Etsy offsite ads. Etsy will promote the listings on high-traffic websites (including Google, Facebook, Instagram, Pinterest, and Bing) to attract new buyers directly to your shop. The offsite Ads aims to drive more traffic to Etsy shops by reaching potential customers who are not actively searching on Etsy but may be interested in the unique and creative products that sellers offer.

In here we have a search results for glasses stand
Google Shopping results for glasses stand

How to use Etsy Ads effectively?

Unlike the manual advertising of some platforms, Etsy’s automatic advertising can accurately advertise based on a few words. It seemingly leads to a very mixed audience, and many Etsy sellers even complain that advertising cannot help bring income but incur costs.

So we can do nothing about this kind of automatic advertising?

The answer is definitely no. Etsy sellers can intelligently use Etsy advertising to increase sales, but how?

1) Selecting the right products for advertising?

In most cases, "best-selling products" and "new products" are better suited to attract traffic through advertising.

Owing to good sales and response in the market, "best-selling products" have been recognized by many customers when Etsy advertises such products to new potential customers, it will increase the probability of making orders.

If your store has recently launched a "new product", it is also very suitable for advertising at the initial stage. Through a large amount of traffic brought by advertising, you can quickly promote the new product line to customers, and judge the market activity and consumer acceptance of the product according to the specific feedback effect (click-through rate, conversion rate, etc.). In that case, you can quickly judge the market situation and determine the long-term advertising strategy.

Open “Etsy Ads dashboard” and click “Manage advertised listings”, where you can manage which listings you want to use for advertising.

We cannot change the algorithm logic of Etsy platform advertising, but we can optimize and adjust our tags and titles. According to the performance of the ads, there are two ways to improve the accuracy and conversion rate of advertising.

1) Adjust advertising settings based on search terms

In Etsy advertising manager, you can deeply review the performance of your Etsy Ads. Get started with click rate, order rate, search terms, or search volume.

For Example.

Go to click "search terms →", you will clearly see what keywords searched by Etsy shoppers your listings are shown on

You can actually see whether the results are related to the listing that your are advertising and decide whether to turn off the "Relevant keyword" button or not.

You can sort all of the searches that led to this listing by views, clicks and orders.

Once you turn off the button, your ads will no longer be displayed under these keyword search results. This function allows you to save advertising costs and prevent advertising from being widely promoted to irrelevant audiences.

2) Optimize the product listing according to the core indicators

According to the actual display volume, click-through rate, ROAS, and other key indicators of Etsy advertising, we can correspondingly adjust the listings to maximize the advertising effect.

For both beginners and current Etsy sellers, they may encounter difficulties in how to analyze advertising performance. You can check our Success Program Package on which we manage your Etsy Ads.

3) Finding the best daily budget for your listings

Determining the best daily budget for your Etsy Ads is crucial for maximizing your return on investment (ROI) while ensuring your products get the visibility they need. Etsy Ads operate on a cost-per-click (CPC) model, meaning you pay each time someone clicks on your ad. Setting the right daily budget helps you control your spending while targeting the right audience effectively.

Here’s how you can find the best daily budget for your Etsy listings:

- Initial budget: Begin with a modest daily budget. Etsy recommends starting with at least $1 per day, but a more realistic starting point might be between $3 to $5 per day, depending on your goals and financial capacity.

- Test period: Run your ads for at least 30 days to gather initial data. This period will provide insights into how your ads are performing without a significant financial commitment.

- Track key metrics: Regularly check your Etsy Ads dashboard to monitor impressions, clicks, click-through rate (CTR), and conversions (sales).

- Analyze trends: Look for patterns in which listings are getting the most clicks and generating sales. Identify high-performing ads and those that need improvement.

- Calculate Return on Investment (ROI): Calculate the revenue generated from your ad-driven sales. Compare this against the amount spent on ads to determine your ROI.

- Assess profitability: Ensure your ads are generating a profit. If the cost of ads exceeds the revenue generated, adjustments are necessary.

- Include only high performing listings: Include listings that are generating a high ROI to boost their visibility further.

- Reduce or exclude underperforming listings: If certain listings are not performing well, consider excluding them from the Ads.

- Enhance keywords: Use data from your ad performance to refine your keywords. Focus on high-converting keywords to improve your listings’ relevance and CTR.

- Improve listing quality score: Ensure your product photos, descriptions, and tags are optimized. High-quality listings tend to perform better in both organic and paid search results.

- Plan for key periods: Increase your daily budget during peak shopping seasons, holidays, and special events when traffic and purchasing intent are higher.

4) Adjusting your Etsy Ads according to seasonality, current trends and new niches

It’s essential to adapt your advertising strategy according to seasonality, current trends, and emerging niches. Understanding and leveraging these factors can help you stay ahead of the competition and make the most of your advertising budget.

  • Seasonality

Seasonality plays a significant role in consumer behavior, affecting what people search for and purchase throughout the year. Holidays, special occasions, and seasonal changes drive shifts in demand. For instance, items like holiday decorations, gifts, and seasonal apparel see a spike in interest during the festive season. As a seller, you should anticipate these changes and adjust your Etsy Ads accordingly. Increase your budget and focus on promoting relevant products during peak seasons. Tailoring your ad copy and keywords to reflect the season can also attract more customers.

For example, incorporating terms like "holiday gift" or "summer fashion" into your listings can help your ads resonate with seasonal shoppers.

  • Trends

Current trends are another critical factor in optimizing your Etsy Ads. Trends can be influenced by various factors, including cultural events, fashion movements, and social media. Keeping an eye on these trends allows you to capitalize on the current consumer interests. Regularly researching popular trends and integrating them into your product offerings can give you a competitive edge.

For example, if eco-friendly products are trending, highlighting the sustainable aspects of your items in your ads can attract environmentally conscious buyers. Additionally, using trendy keywords can improve the visibility of your listings in search results.

  • New niches

Exploring new niches can also open up opportunities for your Etsy shop. The marketplace is vast, and there are always emerging niches that cater to specific customer needs or interests. Identifying and targeting these niches can help you reach new audiences and reduce competition. To effectively enter a new niche, research and understand the unique preferences and behaviors of your target audience. Tailor your product descriptions, images, and keywords to align with the expectations of this niche.

For example, if you discover a growing interest in personalized pet accessories, you could create and promote a range of customizable pet products to attract pet owners looking for unique items for their furry friends.

Adapting your Etsy Ads strategy to these factors requires continuous monitoring and flexibility. Regularly reviewing your ad performance data can provide insights into what’s working and what’s not, allowing you to make informed adjustments. If you notice a decline in performance during off-peak seasons, consider reallocating your budget to focus on evergreen products that have steady demand year-round. Conversely, during high-demand periods, increasing your ad spend and focusing on seasonal bestsellers can help maximize your sales.

Are Etsy Ads Worth It?

Generally speaking, shops selling higher price items ($30+) will have a better chance of success. That is because ads on Etsy are charged the same way no matter what the item price is. For a low price item, like a digital download that costs $5, the ad fee becomes a bigger percentage of the cost.

Established shops also have a better chance of succeeding because of their higher conversion rate. It means that they need fewer clicks before a shopper place an order, which makes the ad fee lower and more affordable.

It’s also worth trying Etsy ad for items that uses keywords that are competitive and difficult to rank. Those listings may be difficult to rank organically. It may be a good idea to pay for ads so that the listings show up higher in the Etsy search results.

For newer shops, it may be worth it pay for ads as an investment to gain visibility and some positive reviews on Etsy quickly.

So, Etsy ads are not for everyone. The most important thing is to test it for your own shop.

Extra - Frequently Asked Questions

How much do Etsy Ads cost?

Etsy Ads costs are based on a daily budget you set, starting as low as $1 per day. You are charged on a cost-per-click (CPC) basis, meaning you pay each time someone clicks on your ad. The actual CPC varies depending on keyword competition and other factors.

How long do Etsy ads take to work?

Etsy Ads typically take a few days to start showing results, but it can vary based on factors like keyword competition, budget, and ad quality. It's recommended to give your ads at least 30 days to gather sufficient data and optimize performance. Regular monitoring and adjustments can help improve effectiveness over time.

What is the success rate of Etsy ads?

The success rate of Etsy Ads can vary widely depending on factors such as product type, keyword selection, ad quality, and market competition. Many sellers report improved visibility and sales, but individual results can differ. It's essential to monitor your ad performance and adjust your strategy for optimal results.

What is a good budget for Etsy ads?

A good budget for Etsy Ads typically starts at around $3 to $5 per day, allowing you to test and gather data on ad performance. As you see results and identify effective keywords, you can adjust your budget accordingly. Many successful sellers recommend starting small, monitoring results, and gradually increasing your budget to maximize ROI.

How many clicks on Etsy before a sale?

The number of clicks on Etsy Ads before a sale can vary widely, but a general benchmark is around 20 to 30 clicks per sale. This can differ based on product type, ad quality, pricing, and target audience. Regularly analyzing and optimizing your ad performance can help improve your conversion rate over time.

How long to run Etsy ads for?

It's recommended to run Etsy Ads for at least 30 days to gather sufficient data and evaluate their performance. After the initial 30 days, review your results and decide whether to continue, adjust, or stop your ads based on their performance.

How many products should I advertise on Etsy?

In the beginning, it’s a good idea to advertise most of your shops listings. If you need to choose only a handful of products to promote, we would recommend going to your listings’ page and choose the make the most amount of sales compare to other listings with similar amount of views or visits. Finding those listings will give you the best chance of success in Etsy ads.

After testing those listings in Etsy ads, you can stop promoting the ones that don’t get any sales especially if they use up a large amount of your ad budget. You should be left with the listings that sells and the listings that don’t get promoted much. Also add in new products in the mix so you can test them out as well. You should continue this selection process every week or two weeks in order to maximize the profitability of ads.

How to start Etsy ads?

To start Etsy Ads, follow these steps:

  1. Go to and sign in to your shop manager account.
  2. In the Shop Manager, click on "Marketing" in the left-hand menu, then select "Etsy Ads."
  3. Decide how much you want to spend per day on your ads. The minimum daily budget is $1.
  4. Select the listings you want to advertise. You can choose to promote all your listings or only specific ones.
  5. Etsy automatically targets relevant keywords for your listings, but you can review and refine these keywords to better match your audience.
  6. Double-check your budget, listings, and keywords. Once you’re satisfied, click "Start Advertising" to launch your Etsy Ads.
  7. After your ads are live, regularly monitor their performance in the Etsy Ads dashboard. Make adjustments to your budget, listings, or keywords based on the data to optimize results.

Do Etsy ads get you sales?

Yes, Etsy Ads can help you get sales by increasing the visibility of your products. When you use Etsy Ads, your listings are promoted in prominent locations on Etsy, such as at the top of search results, which can attract more potential buyers. While Etsy Ads can drive traffic to your listings, converting that traffic into sales depends on how appealing and competitive your products are.

What is a good ROI for ads?

A good Return on Investment (ROI) for ads generally depends on your business goals and industry standards. However, a commonly accepted benchmark for a positive ROI in e-commerce, including platforms like Etsy, is around 3:1 or higher. This means for every dollar spent on advertising, you should aim to generate at least four dollars in revenue. The good ROI is also influenced by your daily budget and the type of products you are advertising whether you are selling an digital or physical items.

Georgi Bosilkov
Etsy SEO Team Lead

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