Etsy Ads: how they are billed, set up and measured

How Etsy Ads work

Etsy Ads are Etsy's own advertising for listings on Etsy. Your ads show in Etsy search, category pages and Market pages on Etsy.com and the Etsy app, and they are shown to only buyers in countries you ship to. You set a daily budget from $1.00 a day, and you are charged only when someone clicks one of your ads. Etsy decides where each ad appears: Etsy places each ad where it may perform best.

Etsy runs a second ad program, Offsite Ads, on different terms. Etsy places ads for your listings on other sites and charges you a share of the order only when one of those ads leads to a sale. The table sets the two side by side.

If a buyer clicks both kinds of ad before ordering, you do not pay twice: if the last click before the order was an Etsy Ad, only the Etsy Ads fee applies.

Etsy ads cost: daily budget and cost per click

The daily budget is the most you can spend on Etsy Ads in a day. Under Etsy's fee policy, the daily charge is never more than your daily maximum budget. The lowest budget you can set is $1.00 a day. The highest is set by Etsy: all sellers start at a maximum of $25, and the limit is recalculated weekly from the last 7 days of ad spend. Also, an unpaid amount due can lower the maximum daily budget.

Inside that budget you pay per click. The cost per click is not a set price: it can vary for each listing and each time the listing appears in search. It depends on how many people click and how valuable the ad placement is, and Etsy names listing quality and competition for the ad space as factors.

Ad costs are summed each day and added to your Payment account the next day. Views are free: you are not charged for views. To see what one click cost you on average, take the budget spent on a listing divided by its clicks.

• Example: a $5 daily budget that buys 20 clicks on a listing is an average of $0.25 per click. The numbers are made up to show the sum; your own cost per click will differ.
• Etsy suggests a test budget of at least $3-5 a day for a new campaign.
• With a budget of $25 or more a day you can pick a strategy for each listing. Below that, Etsy uses Efficient Spending for every listing.

How to set up Etsy Ads

You can set up Etsy Ads on Etsy.com or in the Etsy Seller app. New shops have a waiting period of 15 days before the first campaign, and the Etsy Ads dashboard in Shop Manager shows a daily countdown.

1. Get the listings ready

   Etsy's advice is to optimize your listings first, then use ads to increase visibility. An ad sends a shopper to the listing page, so the photos, title, price and shipping cost have to do the selling. Etsy also notes that ads are unlikely to turn a low-demand listing into a top seller.

2. Check your shipping countries

   Ads are shown to only buyers in countries you ship to. If you want buyers in more countries to see them, add those countries to your shipping profiles first.

3. Choose the listings

   When the campaign starts, all current listings are advertised, and you can change which listings you advertise at any time. You can also sort listings into ad groups (up to 20 ad groups) to compare their results.

4. Set a daily budget

   Pick an amount you can spend every day for a month. The lowest is $1.00 a day; Etsy suggests at least $3-5 a day for a test.

5. Leave it running

   Etsy recommends running a strategy for at least 30 days before you judge it, so give the campaign a full month before you change the budget or the listings.

How to read your Etsy Ads results

The Etsy Ads page in Shop Manager shows each advertised listing with its own numbers. These are the ones that tell you whether an ad pays for itself.

Two details change how you read the numbers. Orders count a purchase of any item in your shop within 30 days of an ad click, so an ad for one mug can be credited with a sale of a different item. Clicks and visits also differ: two ad clicks within 30 minutes count as two clicks but one visit in Etsy Stats.

Are Etsy ads worth it?

Etsy Ads are worth it when the profit from orders that came from ads is larger than what you spent on them. Revenue alone does not answer that, because each sale still pays Etsy's 6.5% transaction fee and, for a US shop, the 3% + $0.25 processing fee, and it costs you materials and time.

Example: over a month an ad spends $30 and the dashboard credits it with three orders of $30 each, so $90 in revenue. ROAS is 3. If each $30 sale leaves you $12 after materials and Etsy's sale fees, three orders bring $36, and the ad made $6. If each sale leaves $8, the same ad lost $6. These figures are made up to show the sum.

Work out your profit per sale before you start, then compare it with spend per order after at least 30 days. Etsy's own guidance is that when your listings are already getting interest from buyers. You can pause the campaign or single listings and restart at any time.

Etsy Offsite Ads and the Offsite Ads fee

Offsite Ads are ads Etsy buys on other sites, such as search engines, social media, partner sites and the Google Display Network. You pay only if a buyer clicks one and orders from your shop within 30 days of the ad click. The fee is charged on the order total: item price plus shipping and gift wrapping, and each order within the window may pay the fee.

The rate depends on your shop's sales. A shop under the sales threshold described below pays 15%. A shop that reaches it pays 12%, mandatory for the lifetime of the shop. Either way the fee on one order is capped at $100 per order.

Example: a $40 order with $5 shipping that came from an Offsite Ad is a $45 order total. At 15% the fee is $6.75; at 12% it is $5.40. The order also pays the usual transaction and processing fees.

How to opt out of Offsite Ads

Every shop starts in the program: every shop is enrolled automatically. The opt-out has one condition: shops under $10,000 in sales over the past 365 days can opt out. If you opt out and later change your mind, choose Turn on Offsite Ads on the Offsite Ads page.

Once a shop crosses the threshold, the choice goes away. The fee drops to 12%, mandatory for the lifetime of the shop, and an earlier opt-out stops applying. A shop near the threshold that opts out avoids the fee on its own orders for now, and gives up any sales those outside ads would have brought.

Where Nation fits

Questions about Etsy Ads