Quick Summary
| Setting | Value |
|---|---|
| Minimum daily budget | $1.00 |
| Recommended starting budget | $3-5/day |
| Maximum daily budget (new sellers) | $25/day |
| Average cost per click | $0.20-$0.50 |
| Bidding type | Automatic only |
| Optimization period | 30 days minimum |
Etsy Ads (formerly Promoted Listings) put your products higher in Etsy search results and category pages. You pay when someone clicks, not when they see your ad. This is different from Etsy Offsite Ads, which advertise your listings on Google and Facebook.
Generate optimized Etsy titles instantly
Turn a short product description into a keyword-rich, 140-character Etsy title.
How Etsy Ads Work
When you run Etsy Ads, your listings can appear in:
- Etsy search results — Above or mixed with organic results
- Category and market pages — Browse sections like "Gifts for Her"
- Similar listings sections — "You might also like" on other product pages
- Etsy mobile app — Same placements as desktop
You set a daily budget. Etsy's algorithm decides which of your listings to show, where, and how much to bid. When a shopper clicks your ad, you pay the click cost. If they don't click, you pay nothing.
The Auction System
Two factors determine if your ad wins placement:
- Your listing quality score — Based on click-through rate, favorites, add-to-carts, purchases, and (new in 2026) dwell time
- Your bid amount — Set automatically by Etsy based on your budget
Higher quality listings need lower bids to win. Poor-quality listings need to pay more for the same placement. This is why optimizing your listings before running ads matters so much.
Setting Up Etsy Ads
Step 1: Access Etsy Ads
Go to Shop Manager → Marketing → Etsy Ads. If you've never run ads, you'll see a setup screen.
Step 2: Set Your Daily Budget
Start with $3-5/day if you want actionable data within a month. The $1/day minimum technically works, but spreads too thin across multiple listings to learn anything useful.
All new advertisers start with a $25/day maximum cap. Etsy may raise this limit automatically if you consistently hit your budget. The cap recalculates weekly for shops using Etsy Payments.
Step 3: Choose Which Listings to Advertise
By default, Etsy advertises all your active listings. This is usually wrong.
Better approach:
- Start with 3-5 of your best-performing listings — ones that already convert organically
- Exclude low-margin items (under $15), seasonal items out of season, and anything with poor photos
- Add more listings only after you have data on what works
To exclude a listing: Go to Etsy Ads dashboard → Click "Manage advertised listings" → Toggle off specific listings.
Step 4: Wait 30 Days
Etsy officially recommends running ads for 30 days without changes. The algorithm needs time to:
- Test different placements
- Learn which shoppers click your ads
- Optimize bids based on conversion data
Turning ads off after 3-5 days (a common mistake) means you're paying for data you'll never use.
Understanding Your Etsy Ads Dashboard
Etsy provides these metrics for each advertised listing:
| Metric | What It Means |
|---|---|
| Impressions | Times your ad was shown |
| Clicks | Times shoppers clicked your ad |
| CTR | Click-through rate (clicks ÷ impressions) |
| CPC | Cost per click (what you paid per click) |
| Orders | Purchases attributed to ad clicks |
| Revenue | Total sales from ad clicks |
| ROAS | Return on ad spend (revenue ÷ ad spend) |
What Good Numbers Look Like
- CTR above 0.5% — Your listing catches attention
- CPC under $0.40 — You're not overpaying for clicks
- ROAS above 4x — You're making $4 for every $1 spent
But ROAS alone doesn't tell the full story. See the profitability section below.
Generate optimized Etsy titles instantly
Turn a short product description into a keyword-rich, 140-character Etsy title.
When Etsy Ads Make Sense
Ads work best when:
Your listings already convert organically. Ads amplify existing performance. If shoppers click but don't buy, ads just accelerate your losses.
Your profit margins support advertising. A 40% margin with 3x ROAS means you're barely breaking even. Calculate your true profit per ad sale, not just revenue.
You have room to scale. If you're already selling everything you can make, ads create backlog problems, not profit.
You're launching a new product. Ads can jumpstart visibility while you build organic ranking. But only if the listing is optimized.
When Etsy Ads Don't Make Sense
Skip ads when:
Your listings don't convert organically. High clicks but no sales means your listing page has problems. Fix photos, pricing, or descriptions first.
Your margins are thin. Promoting $8 items with $0.40 CPC and 30% margins is a fast path to losses. You need either higher prices or lower costs.
You're spreading budget across too many listings. Advertising 20 listings with $5/day yields no useful data per listing. Focus on fewer, better products.
You haven't optimized your listings. Ads won't fix poor photos, weak keywords, or mismatched pricing. Optimize your titles, tags, and photos first.
Calculating True Profitability
ROAS is misleading without margin context. Here's the real math:
Example: $40 item with 50% profit margin
- Item price: $40
- Your cost (materials + labor): $20
- Gross profit before fees: $20
Etsy fees on this sale:
- Listing fee: $0.20
- Transaction fee (6.5%): $2.60
- Payment processing (3% + $0.25): $1.45
- Total Etsy fees: $4.25
If this sale came from an ad:
- Ad spend to get 1 sale (assume 3% conversion, $0.35 CPC): ~$11.67
- Net profit: $20 - $4.25 - $11.67 = $4.08
That's a 10% net margin on a 50% gross margin item. Still profitable, but barely. Lower your conversion rate or raise your CPC, and you're losing money.
Use our Etsy Profit Calculator to model different scenarios.
7 Common Etsy Ads Mistakes
1. Turning Ads Off Too Quickly
Sellers often quit after 3-5 days with no sales. Etsy needs 14-21 days minimum to gather performance data. You're paying for learning — don't waste it.
2. Advertising Unoptimized Listings
Ads amplify what's already there. Poor photos, weak keywords, and pricing that doesn't match the market won't convert better just because more people see them.
3. Spreading Budget Too Thin
$5/day across 25 listings means $0.20/day per listing. That's not enough clicks to learn anything. Start with 3-5 listings, get data, then expand.
4. Ignoring the Profitability Math
"3x ROAS" sounds profitable until you account for margins and fees. Track net profit per ad-attributed sale, not just revenue.
5. Confusing Clicks with Success
High clicks but no sales? That's your listing page failing, not your ads. The ad did its job — it got the click. Your photos, price, or description lost the sale.
6. Not Exporting Data
Etsy doesn't store historical performance data forever. Export your stats weekly to spot trends and make informed decisions about budget changes.
7. Advertising Low-Margin Items
$8 items with $0.40 CPC and thin margins can't support advertising costs. Either raise prices or accept that these products grow through organic search only.
Etsy Ads vs Etsy Offsite Ads
These are two completely different programs:
| Feature | Etsy Ads | Etsy Offsite Ads |
|---|---|---|
| Where ads appear | Etsy search, categories | Google, Facebook, Instagram, Pinterest |
| Payment model | Pay per click | Pay per attributed sale |
| Cost | $0.20-$0.50 per click | 12-15% of sale |
| Control | You set budget, choose listings | Etsy controls everything |
| Opt out | Yes, anytime | No, if you make $10k+/year |
Etsy Ads are optional and you control the budget. Etsy Offsite Ads are mandatory for shops making $10,000+ annually — you can't turn them off.
Getting Started: Your First 30 Days
Week 1: Setup
- Set budget to $3-5/day
- Advertise only your 3-5 best-converting listings
- Exclude low-margin and unoptimized items
Weeks 2-3: Observe
- Check dashboard weekly, not daily
- Note which listings get impressions vs clicks
- Don't change anything yet
Week 4: Evaluate
- Calculate true ROAS including margins
- Identify winners (high ROAS, good volume) and losers (high spend, no sales)
- Turn off losing listings, consider adding similar items to winners
Month 2+: Optimize
- Gradually increase budget on winners
- Test new listings one at a time
- Export data weekly for trend analysis
FAQ
How much should I spend on Etsy Ads?
Start with $3-5/day. The $1/day minimum works technically but spreads too thin for useful data. Increase budget only after you identify winning listings.
Why are my ads not getting impressions?
Low listing quality score. Etsy prioritizes ads that are likely to convert. Improve your photos, titles, and tags. Also check that your listings aren't excluded from advertising.
Can I set my own bid amounts?
No. Etsy uses fully automatic bidding. You set the daily budget; Etsy decides how much to bid per click based on listing quality and competition.
How long until I see results?
Give it 30 days minimum. The algorithm needs time to test placements and learn which shoppers convert. Turning ads off after a week wastes the data you paid for.
Do Etsy Ads affect organic ranking?
Not directly. But ads can increase sales velocity, which does affect organic search placement. Think of it as a kickstart, not a permanent boost.
Should I advertise all my listings?
No. Start with your best 3-5 performers. Advertising everything spreads budget too thin and includes items that shouldn't be promoted (low margin, poor photos, seasonal).
What's a good ROAS for Etsy Ads?
Depends on your margins. 4x ROAS with 50% margins means ~20% net profit per sale. 4x ROAS with 30% margins means you're barely breaking even. Calculate net profit, not just ROAS.
How do I know if my ads are working?
Calculate profit per ad-attributed sale after all fees and ad costs. If it's positive and scalable, your ads are working. If it's negative or barely positive, optimize listings or reduce ad spend.
Generate optimized Etsy titles instantly
Turn a short product description into a keyword-rich, 140-character Etsy title.
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