For those that are unfamiliar with Etsy Promoted Listings, they are a relatively new way to advertise your products on Etsy.  Promoted listings replaced the familiar Etsy Search Ads in October 2014.  Promoted Listings show up as the top three listings on the search results page, see image to the right. 

At Easton Digital, we are responsible for managing paid search marketing campaigns for small and large online retailers.  We had previously assumed that the potential revenue and profit from advertising on Etsy were too small and relatively insignificant when compared to traditional pay per click channels.   However, to our surprise one of our clients successfully drove $9,652 in revenue on $2681 in cost in seven month.  We were shocked they achieve this level of success.  Due to the success and increasing number of products, they hired us to expand the promoted listings campaign and grow profitable sales.   Here are some of the lessons we learned from our initial analysis.

Important Considerations & Settings

It is important to understand how Etsy attributes revenue from promoted listings.  There are two components that make up revenue.  First is direct sales, which is when a shopper clicks on one of your ads and then buys that product within 30 days.  Second is indirect sales, which is when a shopper clicks on one of your ads and then buys other products from your shop within 24 hours.  If you have a lot of product variations with similar product listings and longer average time to purchase, your promoted listings may be driving more revenue than you think.
Etsy promotes your listings on Shopping Engine Ads, such as Google Shopping.  Etsy currently covers all fees charged by the shopping engines. Participation in the Shopping Engine Ads program is free for Etsy sellers.  This is great for sellers without an online store.
By default, Etsy automatically promotes any new listing.  You’ll want to turn this off if you only want to promote specific products.  

SEO and Listing Optimization is Critical

It is important to understand that Etsy uses titles, tags, and descriptions to choose products to show on their search results page and ads.  Based on feedback from other Etsy advertisers and our own informal data, SEO and Listing Optimization is very important to be successful with promoted listings.  First, good SEO and optimization will help show your product for more targeted keywords.  For example, if you sell personalized wood cutting boards, you’d rather show ads for the search term "personalized wood cutting board" as oppose to showing up for general search terms like "cutting board" or “wood cutting board".  The later will lead to sales, but the former will have a higher conversion rate.  Second, good SEO and optimization may help get more impressions and clicks for the ads.  There are only three ad spots.  When I do a search for “personalized wood cutting board”, they all three have personalized in their title.  If you sold personalized wood cutting board and did not have “personalized” in the title, you may miss sales.  

It is also important to realize that your Etsy store can show up on Google search results page.  Our client’s account had several blank field and irrelevant text the Shop Announcement field, which shows in Google search results page.  By adding important keywords to your page title, shop announcement field, and all other fields, you can improve your changes for traffic. 

Start Slow and Maximize Budget

When starting out with promoted listings, the maximum daily budget is set by Etsy.  According to Etsy, they calculate the maximum daily budget by taking the mount you spent on ads from the previous week and dividing it by 7. Depending on the current bill status and billing history, they increase the budget. The more you're able to spend on your campaign, and the more you pay your bill, the more your max budget will be.  Since you’ll be forced to a daily budget, start by promoting your best selling products.  Your daily budget may be limited to $10 and the cost per click could be $0.35 to $0.75.  A budget of $10 per day means you’ll only receive 7 to 28 clicks per day.  We recommend concentrating those clicks on a few product instead of spreading the clicks across many products.  This will allow you to see how a product performance and determine how many clicks are required to get a sale.  

It is important to realize that results will very greatly depending on competition, average order value, average CPC, conversion rate, etc.   For those of you who are curious, the client that drove $10,000 in revenue had a average order value of $250 to $275 and conversion rate of 1% to 3%.  Other clients with a lower average order value were limited due to max ad spend limitations set by Etsy.

Etsy promoted listings is an advertising opportunity you should not overlook.  By following best practices and closing watching your ad cost and revenue, you can use promoted listings to grow your Etsy store and potentially drive significant profit.  

We’d like to hear about your experience with Etsy Promoted Listings.  Tweet at us @EastonDigtal to share your experiences.