Etsy Ads: Budget and Goals Explained
Overview
This guide walks you through everything you need to know about running Etsy Ads profitably—from understanding the fundamentals of Etsy Ads to choosing the right strategy and optimizing your campaigns for maximum impact.
What You Will Learn in This Article:
- The benefits and mechanics of Etsy Ads
- The two main strategies for running Etsy Ads effectively
- How Etsy Ads work, including where they appear and how your budget is spent
- Key optimization tips to boost your ad performance and organic rankings
- Insights on Etsy Offsite Ads and their commission structure
- Etsy’s ad goals and speculated strategies
- Final thoughts on whether Etsy Ads are worth your investment
The Wonderful World of Etsy Ads
Ads!! Oh no, that means money! If you’re feeling a little risk-averse about Etsy Ads, don’t worry—you’re not alone. But the truth is, spending money on ads can be one of the fastest ways to start making money on Etsy.
Fortunately, in our experience, Etsy Ads do work—but only if your products are actually good. If you’ve been throwing money at ads for months with no results, it may be time to rethink your niche, product selection, or listing optimization before continuing.
The Two Main Etsy Ads Strategies
1. The Safer Option
With PrintShrimp, you’ll typically make at least £6 profit per order, so a great way to start with ads is to set a low daily budget of $3–$5 per day. This ensures that:
- You only need one sale per day to break even.
- Any additional sales are pure profit.
- You gradually grow your shop and build trust over time with minimal risk.
This strategy is perfect for sellers who want to play it safe and slowly scale their store. Growth will be slow at first, but your listings will organically rank higher as you accumulate more sales.
2. The "Higher Risk" Option
If you have a higher risk tolerance (and more cash to invest), you can spend your way to the top of Etsy’s rankings by setting a budget of $20+ per day. With this approach:
- You gain traction faster in Etsy search rankings.
- You see immediate results (though not necessarily profit at first).
- Your listings gain organic ranking benefits as they get more clicks and purchases.
However, this method is not for everyone—some days you’ll see 10+ sales, while other days you may only get one or two. The goal here is long-term ranking improvement, not just short-term profits.
How Etsy Ads Work
1. Where Are Ads Shown?
Your ads appear on Etsy’s search and browse pages, including:
- Etsy Search Results
- Category and Market Pages
- Similar Listing Sections
Your ads are marked with an "Ad" badge but otherwise look the same as organic results. That’s why having high-quality images, compelling descriptions, and optimized titles is crucial to converting clicks into sales.
2. How Your Etsy Ads Budget is Spent
When you set a daily budget, Etsy only charges you when a shopper clicks on your ad. If no one clicks, you don’t spend anything. Your budget is never exceeded—once it’s used up, ads stop running for the day. If your budget is too low, your ads may stop running before peak buying hours.
3. Cost Per Click (CPC) Explained
Etsy sets an automatic bid amount for each listing, based on factors such as:
- Likelihood of purchase (highly relevant listings get higher bids).
- Price of the item (higher-priced items may get higher bids).
- Competition (popular keywords are more expensive).
Optimizing Etsy Ads for Maximum Profit
1. Use the 80/20 Rule
Not all your listings will perform well with ads. Typically, 20% of your listings will generate 80% of your revenue. Test ads on all new listings for 30–60 days, identify your best sellers and increase the budget for those listings, and turn off ads for underperforming listings to avoid wasting money.
2. Choose the Right Ad Budget
If your budget is too low, your ads may stop running before peak shopping hours (typically after 7 PM). A $5 budget might be spent by noon, meaning you miss out on evening shoppers. A higher budget allows your ads to run throughout the day, increasing sales potential.
3. Optimize Your Listings Before Running Ads
Running ads on poorly optimized listings is a waste of money. Before you start ads, make sure your titles and descriptions are keyword-rich, you have high-quality images, and you’re using all 13 Etsy tags.
4. Use Ads to Boost Organic Rankings
One of the best parts about Etsy Ads is that they don’t just generate paid sales—they also increase your organic ranking. The more sales your listing gets, the higher Etsy ranks it in organic search. Eventually, you can reduce ad spend while still ranking well organically.
Etsy Offsite Ads: What You Need to Know
Etsy automatically enrolls all sellers in their Offsite Ads program. If your shop makes under $10,000/year, you pay 15% commission on offsite ad sales. If your shop makes over $10,000/year, you pay 12% commission (capped at $100 per sale). Sellers making under $10K can opt out, but larger shops must stay enrolled. Offsite Ads can be a great way to expand your reach beyond Etsy, but make sure the commission doesn’t cut too much into your profits.
Etsy’s Ad Goals & Speculated Strategies
While Etsy doesn’t publicly reveal all details of its ad system, here’s what we’ve gathered:
- Maximize Visibility – Prioritizes the lowest CPC (cost per click) to get your listings in front of the most people. Great for new sellers building data and engagement.
- Drive Orders Short-Term – Aims to maximize conversions with less focus on cost efficiency.
- Take My Sales Up a Notch – Likely prioritizes high-margin products over sales volume.
- Compete Against Similar Shops – Similar to Google’s outranking strategy, where higher CPC bids push your ads above competitors.
Final Thoughts: Are Etsy Ads Worth It?
Yes—if you use them correctly. The key is to start small and scale gradually, test every new listing to find your winners, optimize your shop before running ads, adjust your budget to last through peak buying hours, and leverage ads to boost organic rankings.
If done right, Etsy Ads can be a powerful tool for growing your shop, leading to higher visibility, increased sales, and long-term success. 🚀