RIP Etsy Promoted Listings (for now).

In August 2019, Etsy announced that promoted listings would be retired and that sellers would be automatically switched over to their new advertising platform, Etsy Ads.

Up until this point, Etsy utilized a popular program called promoted listings, which allowed sellers to pay for specific listings to be shown higher in search results.

Sellers would set a daily budget, set their maximum cost per click (CPC), and adjust campaigns as needed to reach and maintain profitability. Many Etsy sellers (including myself) were able to achieve and sustain profitable advertising campagins with promoted listings, which was a rare win-win scenario for Etsy and Etsy sellers.

Promoted listings were actually so successful that revenue grew 30% annually as algorithms improved and more sellers used the platform:

 

Etsy Ads is a new advertising platform for Etsy sellers that combines promoted listings with Google Shopping. The key objective of this new, consolidated platform is to maximize visits to listings, as you can see from this graphic presented as part of their 2019 Q2 earnings presentation:

 

Etsy’s CEO, Josh Silverman, clarified the reasoning behind consolidating the marketing channels in a Q2 earnings call, stating:

“We know that our sellers are relatively indifferent as to whether the visits they are buying come from on- or off-Etsy, as long as they’re high-quality visits

“We also believe that on average, our sellers’ gross margin is much higher than our 5% transaction fee. In other words, they are able to spend more on a visit from Google than we would and still achieve a strong return on ad spend

“Our sellers have found it confusing and a bit intimidating to try to manage 2 separate ad programs, and as a result, seller adoption of Google Shopping has been limited. We believe that sellers want a single, simple solution with a single budget, where they tell us how much to spend and we invest that on their behalf, on- and off-Etsy.”

“We use less than 50% of our sellers’ aggregated budget. In other words, they have more appetite to invest than we have inventory to offer. By creating 1 streamlined ad offering, we can optimize our sellers’ budgets across both Pro List and Google PLAs”

 

I believe some of these assertions from Etsy to be highly misleading.

1.) Low seller adoption of Google Shopping was driven by a confusing and intimidating process

Setting up a Google Shopping campaign was even easier to set up than promoted listings. The process included selecting a daily budget and listings to advertise, without being given an option to set a max cost per click.

I don’t think that the alleged complexity of managing 2 varibles to “set and forget” drove low utilization of the service. I believe low seller ROI drove low utilization of the service, and that Etsy is misrepresenting the true reasoning (or doesn’t understand) why Google Shopping adoption has been limited.

I would love to show you more data on my own Google Shopping ROI, however, I did not let my own campaigns run for more than a week or two, given the amount of money they lost me while in effect.

2.) Un-utilized promoted listings budgets are likely to be filled by google shopping utilization

Until the very end, my promoted listings budget was maxed out at $100/day. I was willing to spend ~$3,000/month ($36,000/year, and more if I wasn’t capped) on promoted listings because they were profitable for my business.

Although Etsy never utilized my full daily budget, I set the budget at the maximum level so I could take advantage of every opening that was provided for my niche keywords. The only way that I could authorize this level of spend and not be reckless was to meticulously dial in and control CPC on each type of listing.

Etsy is implying that sellers’ high budgets are real dollars that would be eagerly shifted to Google Shopping, however, they neglect to consider that Etsy sellers will adjust budgets downwards when the Google Shopping spend tanks their ad campaign ROI.

 

Alright, Enough Complaining, Show me the Data!

Month (2019)Advertising TypeBudget Spent ($)Revenue ($)Advertising Cost of Sales (ACoS) (%)ImpressionsClicksOrdersAvg Order Value ($)Cost per Click ($)Conversion Rate (%)
July (31 days)Promoted Listings7334795151989043424411170.211.2
August (31 days)Promoted Listings8963737242264623717371010.241.0
September (28 days)Etsy Ads968147566226462300017870.320.57

Source data: July / August / September

As you can see, advertising on Etsy became unprofitable for me once Etsy Ads were activated. A 66% Advertising Cost of Sales (ACoS) would likely only be tenable if you were selling digital downloads, whereas I’m selling a physical product.

I found that most of my impressions were being driven against very broad search terms that were only marginally related to my long tail keywords. The killer keyword for me was “wall art”, which is only marginally related to my product as opposed to my longtail keywords. This term drove over 15,000 impressions and a “high click rate”. This data aligns with Etsy’s stated goal for Etsy Ads, which is to maximize views (not conversions).

I believe this data supports my theory that Google Shopping customers are far less likely to convert than a customer that’s natively on Etsy.

Google Shopping is a comparative search engine. It tries to match products across marketplaces and get shoppers the best deal for a particular item. This approach and deal-seeker mindset doesn’t align with the product offerings on Etsy, where shippers are looking for unique, personalized items. That’s why it’s so expensive (i.e. unprofitable) for Etsy to pay for Google Shopping Ads and why it will be difficult for you to drive high return as well.

 

10 Reasons to Reduce your Etsy Ads Spend

1.) Etsy Ads Assumes Sellers are Stupid

Aside from claims that managing two parallel ad campaigns is too much for the average Etsy seller (i.e. neanderthal), Etsy also thinks that you and I don’t know how to measure the success of our own ad campaigns.

The entire justification for consolidating promoted listings and Google Shopping is that sellers just need a “single, simple solution with a single budget, where they tell us how much to spend and we invest that on their behalf”.

Brands typically don’t stick around for long if they don’t know how to drive positive ROI on several thousand dollars per month of ad spend. Etsy is using the limited confusion of some small and new sellers to represent all Etsy sellers as confused sheep to their investors, which I believe to be a gross misrepresentation of sellers who make up the majority of spend with on-platform advertising.

 

2.) Etsy Used to Pay for Google Ads to Drive Growth, Now the Cost is on You

Etsy has been investing in Google Shopping ads on behalf of sellers for quite some time. They’ve been doing so to drive user growth on Etsy, but they really want to get out of that game as it’s not been super profitable for them.

It’s very clear that Etsy is looking to shift the burden of Google Shopping onto sellers. Here’s what Etsy CEO Josh Silverman had to say, We expect to reduce Etsy spend on performance marketing channels and reallocate those investments to upper and mid-funnel marketing.”

Therefore, when you spend money on Etsy Ads, you have no choice but to pay for Google Shopping, which means paying for the low ROI cross-platform clicks is now on you.

 

3.) You Can’t Control Cost per Click (CPC)

The number one factor in determining my success with promoted listings was the ability to set a maximum cost per click on each listing.

You’re no longer able to do that with Etsy Ads.

My most profitable campaign had the high AOV “winners” at about $0.26-0.30 per click, while long tail items were $0.08 per click to drive 15% ACoS.

Do you trust the algorithm to do any better? (Hint: It hasn’t worked out for me)

 

Photo by Jp Valery on Unsplash

4.) Etsy Ads Clicks are Typically more Expensive

During my highest spend month with promoted listings, my average CPC was $0.24, with a max CPC of $0.30

With a month of Etsy Ads, my CPC was $0.32 (45% higher) and my max CPC was $1.73 (which didn’t convert, by the way)

Because Etsy Ads is now tied to the Google Shopping anchor, cost per click has increased. This is because you’re now competing with the whole world for ad spend on your keywords, whereas before you were just competing with other Etsy sellers.

 

Photo by Jp Valery on Unsplash

5.) Etsy Ads Clicks Typically Convert Worse than Promoted Listings

My data shows that over a month, with the same listings, titles, and keywords, my conversion rate dropped by 43%.

I’m willing to accept that a small part of that 43% may be related to increased competition in my niche, or that buyers were just a bit stingy this month, but I don’t believe a 43% change in one month is random.

My theory is that because Etsy Ads are now tied to Google Shopping, the clicks we pay for convert at a far lower rate. I attribute this to the mismatch between a typical google shopping customer and Etsy’s recurring customers who are more familar with the platform and associated items/pricing.

 

6.) Etsy Ads are Designed to Maximize Views, Not Conversions

Pay attention to the right hand side of this chart, it’s spelled out clearly for us:

 

Etsy is simply interested in driving more traffic to show growth, and wants sellers to pay for 100% of the listing-specific ads.

They’re unwilling to stop partnering with Google Shopping, so the cost is simply pushed to sellers, regardless of traffic quality as measured by ROI.

A better measure of performance that aligns with sellers would be maximizing AOV x conversion rate alongside higher budget utilization.

7.) Etsy Ads May Compete Directly with your Online Store

If you sell on Shopify, WooCommerce, or any other platform that utilizes Google Shopping ads for the same items and keywords, you’ll be bidding against yourself for clicks.

8.) You Don’t Know Where Your Budget is Being Spent

The following data would be helpful to understand your Etsy Ads spend:

  • How many clicks did each search term drive?
  • What % of my budget was used on promoted listings vs. Google Shopping?
  • What is my CPC for promoted listings vs. Google Shopping?

None of this data is available with Etsy Ads, however, as easily confused Etsy sellers we’re just supposed to sit back and trust the algorithm to solve it for us.

(Feel free to let me know how that works out for you)

9.) Exporting and Analyzing Keyword Data is Not Easy

If you like copy/pasting into spreadsheets and refreshing pages, Etsy Ads is for you.

10.) Etsy Ads Makes it Hard to Improve your Marketing Skills

Part of the fun in e-commerce is learning new skills and improving over time. When you test, tweak, adjust, and analyze campaigns over and over, you get better at marketing and you become a better businessperson.

When an algorithm does that for you and doesn’t deliver the same ROI you could get on your own, it’s probably not worth your hard earned time and money.

 

Here’s What to do Next

If you couldn’t tell already, I recommend you review your Etsy Ads performance metrics.

If it’s working for you, get in touch because I’d love to ask you about it.

If it’s not working for you, turn Etsy Ads off or reduce your budget to $1/day.

I think Etsy will reverse course eventually and re-instate promoted listings because they’ll see a decrease in advertising spend across the board. Don’t hold your breath on this one, it’s already time to move on.

Some Etsy sellers are finding value putting their money into Instagram or Youtube Ads, however, I have yet to learn how to master those avenues myself.

I recommend you take time to work on your Etsy organic traffic with keywords, tags, and listing SEO, in addition to looking at Etsy alternatives like Shopify for your brand.

 

Full Transcription

YouTube / Podcast

Hey everybody, welcome back. My name is Spencer from Merchlifestyle.com, and today I’m going to share with you 10 reasons why I’m slashing my spend on Etsy advertising. Over the last three months, I’ve spent thousands of dollars advertising my listings on Etsy’s platform and I’ve done that because it’s been really profitable for me.

However, Etsy has recently changed their ad platform to combine promoted listings with Google shopping into one platform called Etsy. Ads. I have 10 reasons that I’m going to share with you why I think that is a really bad idea for sellers, and why you should really consider slashing your spend on Etsy ads in this video.

I’m going to share with you 3 months of my own data to show you all of the good metrics, ACoS, click-through rate, average order value, impressions, budget, spend, all of that stuff is going to come together for you to make an independent decision based on my data. After I walk through the 10 reasons, I’m also going to share with you a recommendation at the end of where you go from here and what to do next in your marketing journey as you see to grow your own print-on-demand business with that.

Let’s head over to Merchlifestyle.com, I’ve got an article written up with all my thoughts and we’ll walk through it together. Let’s start with a shared understanding of where advertising on Etsy used to be. Sellers used to be able to run promoted listings which were away for sellers to pay more money for particular listings to be shown higher or in search results.

So when somebody would search for a keyword that was in your title or your listing, you would show up higher you would show up closer to the first page which typically would result in higher click-through rate and more orders and more revenue for you as the seller and for Etsy both from getting revenue from sellers who are paying from promoted listings, but also from the increased transaction fees. Many sellers including myself had a lot of success with promoted listings and if you’ve watched my income reports over the last couple months you’ve seen that I’ve driven several hundred dollars of profit specifically from being able to optimize my promoted listings.

This was a rare win win for both Etsy sellers like myself and Etsy because that’s the sellers were paying as a hundreds of dollars a month and just straight cash to have Etsy make a small algorithm change and incur very very little direct cost to put the ads up higher in search. It was really profitable for Etsy.

And they were actually so successful that revenue from promoted listings had grown 30% year over year since Etsy initiated promoted listings as you can see from this screen shot. You’ll find a lot of things in this episode from etsy’s Q2 Financial results and their Q2 earnings call. So these are some of these graphics are are from there and they’re linked in this post so you can see the promoted listings were really successful for Etsy.

Recently Etsy ads is a new platform for Etsy where it’s going to take promoted listings and combine it with Google shopping. As you can see in this graphic to create one platform that maximizes visits across channels. You can see how the two promoted listings and Google shopping being funded by sellers into this one ad platform.

You might ask yourself like I did. Why would Etsy make this change? If promoted listings was so successful then why do we need to combine Google shopping with Etsy ads? Etsy CEO Josh Silverman clarified that reasoning with a couple different quotes. I’ve pulled from his earnings call which you can find in this article.

He said we know that sellers are relatively indifferent as to whether the visits are coming from on or off Etsy as long as they’re high-quality visits. And my impression is that a high-quality visit means it’s someone who’s just as likely to convert on Etsy as they would a native Etsy buyer. And in my opinion Google shopping that isn’t the case because you’re pulling people who are from Google into Etsy, whereas promoted listings you’re already taking people who are on Etsy and showing them more of what they want to see so he’s assuming that correctly that sellers don’t really care as long as they’re high-quality.

But let’s dig in a bit further. He also said that part of the reasoning is that sellers are able to spend more on a visit from Google than Etsy would as a corporation and they can still return achieve a strong return on their advertising. He also said that, I take particular exception to this quote, that sellers have found it confusing and a bit intimidating to try to manage to separate add programs.

And as a result Google shopping adoption has been limited. He said we believe that sellers want a single simple solution with a single budget where they tell us how much to spend and we invest on their behalf both on and off Etsy. Last quote I pulled from as related to Etsy adds that he had to say was that as he sellers have more appetite to invest than Etsy has inventory or promoted listing space has to offer by creating one streamline add offering we can optimize our sellers budgets across promoted listings in Google promote listings advertising.

You can see in this graphic how it’s he’s laying out this before and after where sellers would have this massive unutilized budget, right, which is when you would set your your advertising budget at a hundred, two hundred dollars, whatever Etsy would cap you at and in most cases they would spend less. And in this new unified ad platform called Etsy ads they’re basically saying they’re going to be able to drive so much more revenue once they bundle Google shopping here together.

However, I think some of these assertions are actually highly misleading from my perspective as a seller and I want to call out exactly why that is. One of the things that Josh said was that low seller adoption of Google shopping was driven by a confusing or intimidating process. However, setting up a Google shopping campaign in my experience was even easier than setting up promoted listings.

You would choose what listings you wanted and you would set a daily budget and you didn’t even have the option to select a maximum cost per click. So I don’t understand how that was any more complicated than promoted listings. I think it was actually easier and went from a seller’s perspective having to manage promoted listings and Google shopping where you are just going on there and setting a budget and choosing what listings you want to promote doesn’t really feel like a huge ask as far as complexity goes. As far more difficult to do things like keyword research and choose your tags appropriately and and comply with all of its these rules than it is to manage those two campaigns.

So I think they’re actually masking the reason that Google shopping was underutilized and my impression is that google shopping was underutilized because it simply had a poor ROI return on investment. Sellers were not getting the return that they needed on Google shopping which was likely driven by the fact they couldn’t control their cost per click.

Right?

I really think that saying that the process was too confusing and that sellers were air quotes intimidated is really masking. The anchor that Google Shopping is which is just not as not as profitable for sellers as putting money into promoted listings, and I’d love to show you guys more data on Google shopping my own ROI.

However, when I did try campaigns I would let them run for a week or two with a low budget and they were huge losers for me. I never made a sale through Google Shopping and I that’s why I don’t have any data because it didn’t work for me. I think the second thing I want to challenge with this statement is that there’s an assumption here that the unutilized promoted listings budget if we go back up there and we kind of look at this top bar, which says today’s unutilized budget is this huge amount?

Well, he’s saying that that promoted listings budget was unutilized and it would be likely to be filled up by Google shopping utilization, but I don’t really think that’s correct. If you look at the amount that I set up as my max budget, I told Etsy I was willing to spend about $100 per day and that’s $3,000 a month. That’s thirty six thousand dollars per year. I would have been willing to spend more if they wouldn’t have kept my budget. However, if you look at my actual spend it always came in less than $3,000 a month, even when I was maxing out my budget and that’s because Etsy would never spend my full daily budget.

But if you follow the logic, you know that it was profitable for me. I’ve proven that with my income reports and you have to ask yourself why I wouldn’t set my budget as high as possible because that’s he’s telling me if I’m spending money on promoted listings. I’m making money. So why would I not want to spend as much money on that as possible and as he was never really able to get it there?

What adds he’s assuming however, is that all of that budget that sellers had allocated to promoted listings, which was necessary to get the most value out of promoted listings because Etsy would never fill up your budget at a profitable spend level. Then they’re assuming that Google shopping will just fill that void.

However, they neglect to recognize that people already have the option to spend money on Google shopping and that they just weren’t doing it. What they should have done is taken the Google Shopping budget and added that onto the promoted listings budget to create an actual value of what was there.

However, I really don’t think that Etsy sellers are just going to magically pu all of their allocated budget which was for a profitable promoted listing spend and dump it into Google shopping. The ROI isn’t there. I haven’t seen it in my data and I don’t think sellers will follow that trend. So I think it’s he’s actually off on both of those points.

Okay, next let’s take a look at my actual data from the last three months. You can see in this table. I’m tracking July August and September you can see in July and August. I had promoted listings and then in September I was switched over to Etsy ads you can see the key numbers. I want us to pay attention to here are the key numbers that any marketer should be using to value their advertising spent on e-commerce platform.

There is a key one here. That is your cost per click. Just how much money you’re paying per click your conversion rate, which is how many orders are you getting for? Each of those clicks on a percentage basis.

You should be paying attention to your average order value, which is the art of measuring how valuable those conversions are to you and another key number is. Advertising cost of sales, which is your the amount of your budget spent that contributed to revenue. So that number comes from this 733 / 4795.

So what that means is 15% of my revenue for that month was spent on advertising and you want that number to be as low as possible. So as you can see here., as we move towards Etsy ads there’s a huge jump when we move from promoted listings to at see ads my advertising cost of sales went up to 66 percent which is just totally unsustainable for me.

It’s sustainable if you sell something like a digital download where your overhead is really low. However, spending almost a thousand dollars to earn about 1500 or me. Did that just doesn’t make any sense. I saw my orders plummet, you can see that in my conversion rate. It was down about 43% from August moved from one percent down to .57.

Point five seven percent was my conversion rate and my cost-per-click went up by about 45 percent. I used to be paying twenty four cents a click and now I’m paying 32 cents a click keep in mind and all this data. I didn’t change any of my pricing keywords listings. These were all held, you know completely flat and I didn’t change any of those key variables during this time.

So my average order value really plummeted as just you can see by the amount of impressions and actual orders. The traffic that I was driving through Etsy ads is just lower value traffic to me it converts almost half as well and I attribute a little bit of that to the fact that you know, If some of these clicks are going through Google shopping, which I have to assume they are at those sellers just aren’t as interested in converting and checking out as an Etsy native customer would be.

So one other thing that really bothered me was that I found a lot of my Impressions were being driven by, as far as Impressions from September, when I was on Etsy ads your be driven against really broad search terms, even though those Search terms were very very small part of my description or my tags, or they were partials give you example because I sell posters one keyword that the ranked the highest for me was wall art. However, I never had wall art in my tags or in my title. So this term drove 15 thousand impressions in a high click rate, which means I spent a lot of money on a very broad search term that I wasn’t even targeting.

And this lines up with what has he told us before that there are new unified platform is meant to drive the most views ,not necessarily the most high value conversions, which is what we look for is sellers. So I think that this this data shows me the Google shopping customers, which weren’t coming into my store before and now they are I think they’re far less likely to convert than a customer that’s already on Etsy and I think that’s because Google shopping is a comparative shopping engine.

It’s trying to match up products across marketplaces is trying to find you the best deal on one item that’s common, can be sold in multiple places, but Etsy is completely the opposite where people are looking for Unique or personalized items that they can’t find anywhere else and I think that’s part of the reason that part of the reason there’s a friction there and pulling people from Google shopping into Etsy.

And Etsy trying to show some kind of growth in users or traffic and that’s the reason they want to get out of the Google shopping game because it’s just it’s just unprofitable. It’s not a great channel to pull the kind of customers in that are going to convert. So I want to talk to you guys now about 10 reasons to reduce your Etsy advertising spend.

I love this picture of a skeptical giraffe. And reason number one is that I think at the ads assumes that sellers are stupid. I mean aside from their claims that managing, you know, two parallel ad campaigns promoted listings and Google shopping is just too much and too intimidating for the average Etsy seller.

I also think that they don’t believe that we know how to measure the success of our own ad campaigns the whole justification for comparing our for consolidating rather promoted listings in Google shopping was that oh, sellers are asking for a just a simple solution one budget, Etsy, you know to handle it for me.

But the big brands that are spending lots of money on advertising the people who are at these, you know, most profitable customers are you know, they don’t you don’t stick around for very long if you’re spending thousands of dollars a month. You’re willing to and you don’t know how to measure the success of your advertising campaign.

So I think Etsy is taking what could be the confusion of some smaller sellers or new stores in the forums and they’re representing that confusion and laying it across the entire base of Etsy Sellers and and representing that Etsy sellers are you know are not really bright enough to manage their own metrics and I think from my own experience.

I think that’s a pretty bad misrepresentation of most of us who sell an Etsy. You are not only motivated to improve our business, but are smart enough to understand and learn how to do that better.

Reason number two that I think you should reduce your spent on Etsy ads is because that’s a used to pay for Google ads themselves and they just want to push that cost on to you.

So if you look in my article here, I link to an article that shows Etsy has been investing in Google shopping ads for quite some time now and they’ve been doing so to show a positive growth story and try to grow the Etsy platform. But from the CEOs own words Etsy is looking to shift the burden of that kind of low converting not profitable channel on to sellers.

He said we expect to reduce Etsy spend on performance marketing channels and reallocate those investments to upper and mid funnel marketing. And what that means for the rest of us is performance marketing channels means Google shopping and the only performance marketing channel they were spending money on to my knowledge was Google shopping. And they want to spend more money on TV ads and YouTube ads and partnering with different channels.

Right.

So now when you’re spending money on Etsy ads we are subsidizing what ads they used to pay for and because obviously they don’t want to give up the traffic that they were getting from Google shopping and they want to push that onto sellers. So now that kind of low profitability cross-platform high friction click now that’s on us as sellers.

Reason number three is that you cannot control your cost-per-click anymore or that see ads? I will just be very clear the number one factor for me to be able to determine my success with promoted listings was to be able to control the cost per click my most profitable campaign. I had my high winners my great listings where I was willing to spend typically 26 to 30 cents per click.

As a maximum and then all of my long tail items were more about eight to nine cents per click and in July that drove a 15% ACoS which was fantastic. I made a ton of money that month from promoted listings. And so did I say however as he’s now asking you to trust the algorithm to control that cost per click for you and what I’ve seen and what I’ve shown from my data is that my cost per click is up by 45% That doesn’t really give me a lot of confidence.

Be able to trust that these algorithms going to do better than I was doing before and it hasn’t worked out very well for me.

Reason number four is that Etsy ads clicks are typically more expensive than promoted listings were during my highest spend month with promoted listings. My average cost per click was 24 cents and my Max cost per click was 30 cents, which means it never went over 30 cents.

However in September this month my average cost per click was 32 cents, which was up 45%. And the most amount of money I paid for a click was a dollar seventy three. And that didn’t even convert. How in the world can I expect to trust an algorithm to pay a buck 73 for a click that doesn’t convert on a long tail item that my Max cost-per-click used to be eight cents.

That’s ridiculous.

I think Google shopping is is really an anchor that doesn’t make sense for Etsy and it drags it down. It’s more competitive now because when you’re competing on these keywords in Google shopping, you’re bidding against the entire world that uses Google shopping. Whereas before your competition was just other Etsy sellers, but that’s the reason that these ads are more expensive and that’s going to be a lot harder to run a profitable campaign for you in its current state.

Reason number 5 is that Etsy ads clicks I see that they typically convert worse than promoted listings did.

My conversion rate dropped by 43 percent this month. And you can attribute as much of that as you’d like to seasonality more competition, but I don’t buy that the entire 43% is attributed to that. My theory is again that the clicks that we pay for that go through the Google Shopping channel.

They just converted a far lower rate and it’s again it’s a mismatch between the kind of customer that’s on Google shopping looking for a deal. Versus the customer that’s familiar with Etsy and is looking for that unique or personalized item and the higher pricing that Etsy typically has.

Reason number 6 out of 10 why you should consider reducing your Etsy ad spend is that Etsy ads are designed to maximize views and not high-value conversions.

If you look at the right-hand side of this chart, we’ve already seen you can see here, I’ve highlighted it, Etsy Ads is a single growth platform that automatically maximizes visits across multiple channels. But we don’t care about visits we care about high-quality conversions. And if you’re getting high quality conversions at a affordable price, then we can maximize visits.

It’s completely backwards. The I think what it’s he’s doing here is they’re trying to drive more traffic there trying everything they can to grow the platform. In theory they don’t want to give up the Google shopping traffic that they’ve already been paying for so it’s time to push that onto sellers.

And I think this is kind of backwards when you look at it from a seller’s perspective. I think a better measure performance would be maximizing some combination of your average order value being high with a conversion rate metric and then tracking kind of those metrics alongside how much of the budget is actually being spent. I think that would be a better metric.

Reason number seven. This is a good one if that’s the ads might complete compete directly with your own online store.

If you run a Shopify store and you’re actually doing Google shopping ads. Well, you better not have the same keywords and product listings because all of a sudden you will be bidding with yourself for the same keywords, and you might as well drive that traffic to your own online store rather than compete with Etsy.

That’s reason number 7 reason number 8 is that you don’t know where this budget is being spent. I had a couple questions when I started running at the ads that I really wanted answers to, but the data just wasn’t there for me. I want to know how many clicks each search term drove when I gave you that example of wall art.

It told me that I had a high click rate. What does that mean? How many clicks were attributed to that broad term? I’d love to know what percent of my budget was used on promoted listings versus Google shopping. I want to know the conversion rate for those two platforms. If you’re going to combine them at least let me look at the data between the two however Etsy doesn’t give us that choice and that’s that’s a lack of transparency that that creates room to cover up actual performance and what drives that performance.

I would love to know my cost per click or promoted listings versus Google shopping. I have a suspicion that it’s much higher than on Google shopping as well. None of this data is available. So without analyses like this one and what some other Etsy sellers have put out, it’s very difficult for us to actually figure out what’s going on.

And that’s part of the reason I wanted to share my data with you to help challenge this change and help you understand why it’s likely not good for you.

Reason number nine why you should consider slashing your essay had spent is that just exporting it analyzing your keyword data. It’s never been easy, and it’s still not easy. So if you like copy and paste spreadsheets and refreshing pages and do it over and over again Etsy ads is the perfect platform for you.

Reason number 10, and this is super important, part of the reason that I run this channel part of the reason I enjoy e-commerce is because it sharpens my skills. I learned new things and then I can test an experiment and grow my own knowledge and become a better marketer and a better business person, but Etsy ads because it treats sellers with such a reductive and simplified perspective, it’s just impossible to improve your marketing skills. You can’t intelligently test tweak and update your strategies. I guess you could just change your budget up and down and turn listings on and off, but that’s not really a lot of strategy and there’s not a lot you can learn from that.

So you’re basically giving all the learning to the algorithm put they’re putting it behind a closed door and your ability to improve your skills is highly limited. So it’s likely not worth your time and money to do this.

Guy’s there’s 10 reasons. I slashed my budget to one dollar per day. I’m only doing that too so I can keep my keywords and see if it performs any differently over the next month.

With one dollar a day, I want to measure that impact against my store and continue to bring more data to you.

But let’s talk about what to do next. Okay, if you couldn’t tell already review your own metrics. Etsy automatically pushed a lot of people over to Etsy Ads. I was one of the people who I didn’t want to opt into it.

They had said that if I wanted to opt into it over the course of a month I could. I held off clicking that button because I didn’t like what was coming but they pushed me into it anyway, so you might have been pushed into it too. And if you’re one of those sellers who had those high budgets because promoted listings with a rock star for you.

Well, I hope you’re not in for a bad surprise this month because all of that budget will certainly be eaten up by that high cost per click that Google shopping loves to deliver. So if Etsy ads is working for you, please get in touch with me and leave me a comment. I’d love to talk to you and set up an interview potentially and ask you about how that’s working and how you manage to optimize, at what kind of listing works well.

If it’s not working for you, turn it off or reduce it to a dollar a day if you turn it off and then you turn it back on to a dollar day, your keywords will still be there. At least they were for me when I turned it on same day so that can be the minimum you can do. I really do think that Etsy will reverse their course on this eventually and reinstate promoted listings.

I think some of these assumptions about Revenue growth with a combined platform are based on a misleading pretense and I think we’re going to see in the Q3 or Q4 earnings report. I project that there will be a little bit of backtracking or at least a little bit of underperforming against the expectations that Etsy has set for this new, combined platform and that’s just because sellers aren’t as stupid as that making us out to be.

I found that some Etsy sellers are finding value putting money into Instagram or YouTube ads. I’m not the expert on those. I have yet to master them myself. So what I’d recommend you do is just take some time to work on your organic traffic with your keywords tags and your listing SEO.

I’m going to be doubling down on how to expand my Etsy organic search footprint and I’ve also been growing my Shopify store managed to get a couple sales on that this month. So it’s a great time, another great reminder why to diversify away from different Platforms. So please let me know how if this resonated with you.

Let me know if it’s working or if it’s not and if enough sellers band together in solidarity and actually adjust their budgets downwards to reflect the low level of performance that you might see on Etsy Ads, then maybe we can just turn this ship around, but I’d like to thank you for watching, head over to merchlifestyle.com and sign up for my email list if you like this content and if you’d like to receive more.

Drop us subscribe whether you’re listening on podcast or YouTube and I’ll be glad to catch you guys next time.

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