How To Run Etsy Ads Without Going Broke!

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When it comes to running Etsy ads and offsite ads, one of the biggest questions I get is: Are they worth it, or are they just a waste of money? In my latest podcast episode, I tackled this topic head-on, sharing everything you need to know to run ads effectively without blowing your budget. Here’s a breakdown of the key points we discussed.

What Are Etsy Ads?

Etsy ads are promoted listings that show up in Etsy’s search results. If you’ve ever searched for a product on Etsy, you’ve probably noticed rows of listings marked as “promoted.” These ads let sellers pay to boost their products in search results, giving them a chance to skip the line and get more visibility.

What I love about Etsy ads is the level of control you have. You can decide:

 • Which listings to promote

 • How much money to spend per day (starting at $5)

 • Which keywords you want to target

That control makes them a great tool—if you know how to use them wisely.

Gradual Budget Changes Are Key

One of the biggest mistakes I see sellers make is drastically increasing their ad budget overnight. If you jump from spending $5 a day to $50, Etsy’s algorithm can’t keep up, and your money won’t be well spent. Instead, I recommend gradually increasing your budget in small steps, like going from $5 to $8, then to $12, and so on.

This slow-and-steady approach gives the algorithm time to adjust and ensures your ad spend is optimized for results.

Ads Won’t Fix Bad Listings

Here’s a hard truth: If your Etsy listings aren’t optimized, ads won’t save them. If you’re not already getting organic sales, running ads will only send traffic to listings that aren’t converting—and that can actually hurt your ranking.

Before investing in ads, make sure your listings are in top shape. That means great photos, compelling descriptions, competitive pricing, and SEO-friendly keywords. Ads should amplify success, not cover up weaknesses.

Offsite Ads: What You Need to Know

Offsite ads are a completely different ballgame. Etsy runs these ads for you on platforms like Google, Facebook, and Bing. The catch? You don’t have much control over them. Etsy decides which of your listings to promote and charges you a fee only when a sale is made.

Here’s how the fees work:

 • If you make over $10,000 in a rolling 12-month period, you’re automatically opted in, and the fee is up to 12%.

 • If you make less than $10,000, you can choose to opt-in, but the fee is up to 15%.

In my experience, offsite ads tend to perform better than Etsy ads because Etsy is highly selective about which listings it promotes. This can result in a better return on ad spend (ROAS).

Understanding ROAS (Return on Ad Spend)

ROAS is a key metric that tells you how much money you’re making for every dollar you spend on ads. For example, if you spend $25 on ads and earn $130 in revenue, your ROAS is 5.2 (or $5.20 earned for every $1 spent).

The average ROAS varies by niche, but a common benchmark is 3:1. However, depending on your profit margins, you may need a higher ROAS to stay profitable. That’s why it’s essential to calculate this metric and monitor your ad performance closely.

Tips for Running Successful Etsy Ads

If you’re ready to give Etsy ads a try, here are my top tips:

 1. Test All Listings Initially: Start by advertising all your listings and then turn off ads for the ones that don’t perform well.

 2. Avoid Frequent Changes: Don’t constantly tweak your budget or turn ads on and off—it confuses the algorithm.

 3. Monitor Your ROAS: Use Etsy’s dashboard to track your return on ad spend and identify low-performing ads.

 4. Focus on Profit Margins: Ensure your products have enough margin to absorb fees and still make a profit.

Final Thoughts

Ads can be a powerful tool for growing your Etsy shop, but only if you use them wisely. By understanding the differences between Etsy ads and offsite ads, gradually increasing your budget, and focusing on optimized listings, you can make your ad spend work harder for you.

If you want to dive deeper into this topic, I’ve created a free cheat sheet to help you manage your Etsy ads like a pro. Just leave a comment on the podcast episode, and I’ll send it your way!

Running ads doesn’t have to be stressful or expensive. With the right strategy, you can attract more customers, boost your sales, and grow your Etsy business sustainably. Let’s do this!