Etsy ads can be a great way to boost your shop, but they are also a source of huge frustration and anxiety for many sellers. Many people question whether it is worth using Etsy ads at all, particularly when their shop has only opened recently.
There are 4 mistakes that I think are leading many new starters to a bad experience with Etsy ads.
1. No proof of concept
Turning ads on all your listings when you have no idea if your products are desirable or competitive, or if your listings are any good (for example, with titles, tags, images) is very risky and likely to lose you money. Some shops can do this because they are established and have a very good idea of what their customers want and they know their place in the market, but if you are a new shop, you probably don’t have that.
What to do? Turn ads on for your best sellers only at first, or those with the most favourites if you have no sales (but I suggest you wait till you do have some sales).
2. Unrealistic expectations
If you are a new shop and expecting Etsy ads to bring you traffic and sales in quick succession, this is not realistic. Ads will put your product in front of more people, but there are no guarantees they will buy it.
There are many reasons people won’t buy from you, particularly in the beginning. At that stage your stop has little to no social proof in the form of sales or reviews. Trusting in your shop will be a hurdle for most people, so your conversion rates will be lower even if your products are good. What this means is it will be harder for your ads to run profitably.
What to do? Be patient and treat ads as a way to get more visibility and data initially, rather than expecting a lot of sales and profitability from ads.
3. Not knowing your numbers
Beyond your initial push for visibility and data, in the longer term you want your ads to be profitable and sustainable. You need to know your break-even return on ad spend (ROAS) after accounting for fees. There are cases where it will never be profitable to run ads on a product, particularly for very low cost items where competition is high and clicks are expensive.
What to do? Calculate your break-even ROAS for your products. Use this and your conversion rate to decide if it makes sense to run ads. I have a free Etsy Fee Calculator that calculates break-even ROAS for you (for digital products only).
4. Setting and forgetting
Etsy ads do require supervision. How often is up to you, but I’d suggest keeping an eye on them daily or weekly. This isn’t to say you should be turning ads on and off willy nilly and constantly changing your budget (don’t do that! Resist the urge!), but you do need to be aware if a listing is quickly amassing too many clicks which aren’t converting.
What to do? Check your ads regularly to make sure nothing has gone haywire. Check the keywords Etsy is using and disable irrelevant keywords if they are using up clicks. Wait a suitable amount of time before judging if you should turn an ad off by comparing the listing’s ROAS with your break-even ROAS. Continue to feed the algorithm new products to advertise when you have a proof of concept for them (say, a few sales).
Final thoughts
Etsy ads can help your shop to grow faster but there are many ways they can go wrong. I hope this article has helped you become aware of some of these traps.
I have a detailed guide on Etsy ads and how to run them which includes how to calculate your break-even ROAS and how long to let ads run before assessing their performance.
For a shortcut to working out your numbers, you can also get my free Etsy Fee Calculator for digital sellers on Gumroad.