Promoted Listings In-Depth Guide

Promoted Listings is used by many of Etsy’s top sellers to drive sales. But it is a complex advertising tool, and making it work for your business takes time, money and effort. In this guide, we’ll discuss some of the key components of Promoted Listings, and we’ll make suggestions on the kinds of changes you can make to improve your Promoted Listings performance. Many of the tips in this article are based on the foundation laid in the series The Essentials of Online Advertising and Is Online Advertising Right for You? These articles cover key foundational principles of online advertising, and many of those same principles can be applied to Promoted Listings.

Is Promoted Listings Right for Your Business?

Before going much further, it’s worth pausing to consider whether Promoted Listings is right for your business. From the The Essentials of Online Advertising article, we know there are some key things to consider:

  • Are the products you sell profitable enough for you (on a per item basis), that you could afford to spend a little extra on advertising, and they would still be sufficiently profitable?
  • Do you have inventory that isn’t getting sold as fast as you’d like?
  • Do you have excess capacity (time, materials etc.) and the desire to produce more of your products?
  • Do you have the time, budget and willingness to experiment to find the right advertising strategies for your business?

If you’ve answered all or most of these questions with a “yes” then Promoted Listings may be a great option for your business. With the right level of investment of time and money, Promoted Listings is an excellent choice for your advertising dollars because of how targeted the advertisements already are. Ads are only shown to buyers who are already searching Etsy for products like yours. This accurate targeting dramatically boosts the performance of these ads beyond what you’d typically be able to achieve advertising outside of Etsy. If any online advertising was going to work for your business, Promoted Listings is a great place to start.

The Marketing Funnel with Promoted Listings

As discussed in the Online Advertising Essentials articles, advertising can be thought of as a funnel. At the top are the people that are aware of your business. In the middle are the folks that are interested in your business, and at the bottom, what you are left with are people who have purchased from your business. To drive sales, you need to figure out how to make people aware of your business, then how to get them interested, and finally how to get them to purchase from you. To organize this guide, we’ll work through that marketing funnel and discuss different changes to your Promoted Listings campaign you can experiment with until you find a strategy that works. The marketing funnel is a useful metaphor for Promoted Listings because awareness can be thought of as an impression, interest can be thought of as a click, and well, a sale is a sale!

Building Awareness Through Promoted Listings

As we learned in The Essentials of Online Advertising, building successful awareness hinges on the targeting and the volume of impressions you generate. In the following two sections we’ll focus on the volume of impressions, and we’ll delve deeper into targeting in the “Interest” section below. There are three key variables to keep in mind when you think about the volume of traffic you can drive from Promoted Listings. The first is the amount of people searching for things like your item. While you can’t control how many people come to Etsy each day looking for items like yours, you CAN adjust titles and tags to appear to different and bigger groups of buyers. If your titles and tags are extremely specific, maybe try broadening them - instead of “teak armoire”, try “wood cabinet.” Like with traditional online advertising, it is crucial to find a balance between a large volume of unqualified traffic and a small amount of very qualified traffic.

The second component that determines your volume of impressions is the quality of your listings. Etsy wants to make sure that high quality and relevant listings are showing up in the promoted sections of search results so that buyers find the things they want and buy them. So Etsy assigns each listing a quality score that takes into account a variety of factors, but primarily past buyer behavior on that listing and similar listings. To boost your quality score and show up higher in the promoted listings within search results, you’ll need to do the same kinds of things that drive your success in Etsy search. Those things include upgrading photos and using more descriptive titles and tags. In general, the higher your click rate is on your ads, the higher your quality score will be, and the more likely your ad will be to show up higher in the search results page. We’ll discuss ways to improve click rate below, in the “Interest” Section. Again, the key here is to experiment to find ways to boost your quality score. And while your participation in Promoted Listings has absolutely no effect on where you show up in Etsy search, the kinds of changes you make to improve your quality score for Promoted Listings will likely have a positive impact on your performance within Etsy Search.

How Your Bidding Strategy Impacts Your Impressions

The third factor that drives the volume of impressions you’ll be able to achieve within Promoted Listings is your bids. The more you bid for a click, the higher your promoted listings will show up in buyers’ search results. In other words, the higher your bids are the more impressions and clicks you should get, all else being equal. When thinking about how high your bids are, keep in mind that a higher Cost per Click means you have to pay more to achieve a sale and your overall advertising strategy must be able to accommodate that higher Cost per Acquisition. Once you have found bid levels that work for your business, try increasing your daily budget to garner more impressions and clicks each day. As long as the Cost Per Click and your conversion rate stay relatively constant, increasing your daily budget should yield additional profitable sales. If you want to raise your maximum daily budget, ensure your Etsy bills are paid up, and that you are spending the daily budget you already have. Once you’ve checked those boxes, your maximum daily budget should automatically grow over time.

Most Etsy sellers using Promoted Listings also use automated bidding, which automatically sets bids for you. Getting your bidding strategy right will take thoughtful experimentation, but using Etsy’s automated bidding system should help eliminate some of the manual effort and guesswork. The automated bidding system takes into account a few factors to set your bid. It considers the price of your listing and the conversion rate on that listing in the past. It also takes into account the competitiveness of the listings’ titles and tags in the Promoted Listings auction. The higher the price of your item and the more likely it is for a click on the listing to lead to a sale, the higher the automated bidding system will bid to promote that listing for you. At the same time the system is trying to minimize the cost of each bid for you based on the other bidders in the marketplace and what they are bidding. In other words, the automated bidding system is bidding the optimal amount based on the information it has about your listing and the competition. That said, based on a variety of factors it may not be bidding an optimal amount for your strategy and you may want to manually set bids or use the “max bid” feature to control the costs of your bids. First of all, it takes time for the system to gather data on your listing and how likely it is to convert. Over time, it will adjust its bidding to more accurately bid for your item, but at first, it may not be accurate. Secondly, the automated bidding system knows how much revenue you make when you make a sale, but it can’t know how much profit you make when you make a sale. You may need to override the automated bidding system if over time you realize that your Cost Per Acquisition is too high. For more information about calculating your Cost per Acquisition, see Is Online Advertising Right For You?, or read further in this article to learn about the profitability of your Promoted Listings.

Driving Interest in your Listings

The next stage of the funnel is about driving interest, or getting people who’ve seen your promoted listings to click on them. As you can imagine, the likelihood of someone clicking on your promoted listing depends on whether they were looking for a thing like your item, and what they see when they look at your promoted listing. Promoted Listings uses your titles and tags as inputs to decide which buyers to show your ads to. If the targeting on Promoted Listings isn’t as narrow or accurate as you’d like it to be, the best way to test out different targeting strategies is to adjust your titles and tags. One way to try this would be to set up multiple listings with similar imagery and prices, but totally different titles and tags (that are still relevant to your items) and see how well the different listings fare compared to your original listing. Also, Search Term Analytics allows you to see which of your titles and tags are driving the most impressions and the highest click rates. Try adjusting your titles and tags so that they are similar to the successful search terms.

Assuming you are targeting the right people, what can you do to get them to click? Each of the elements that comprise your listing card will have an effect on whether or not someone clicks on your listing. The most important element is the photo. Does it look amazing? Does it work in a small format? Does it accurately reflect the product you are selling? Then, it’s time to consider the title you are using. Do the first few words convey what the your item is in a succinct and attractive way? Next, consider the price. How does the price match the item pictured? Is it an attractive price? Would it be prohibitively expensive for a buyer searching for your item? Does the price convey the quality of the item or does it feel too cheap to be realistic? Each of these factors impacts how many clicks you will drive from a given amount of impressions (your Click Through Rate) and so experimenting with these variables to the extent possible is the best way to impact your success in driving more interested people to your shop. Just keep in mind that if you are adjusting your prices on items, you’ll need to ensure that you are still able to turn a profit once the item actually sells.

Converting Interested Browsers into Sales

The last component of the marketing funnel is sales, or “conversions.” When you think about sales from your shop, you should think in terms of conversion rates. Interestingly, conversion rates aren’t just relevant for your Promoted Listings analysis. In fact, you can calculate the conversion rate for your shop before deciding whether to turn Promoted Listings on at all. Conversion rates are calculated by taking the number of purchases in your shop divided by the number of visits to your shop over a certain period of time, like a month. The conversion rate helps you understand what percentage of people are finding something they like when they get to your shop. Because it is a rate, it helps you understand what would happen if you increased the traffic to your site through spending on advertising like Promoted Listings.

Setting up your Etsy listings and shops for success in Promoted Listings means presenting a clear picture of what makes your products special to your potential customers. Keep an eye on the following characteristics of your shop to ensure that your conversion rate is as high as possible, which in turn will make your advertising investment more lucrative.

  • The quality and number of the images make a big difference. People want to see what they’ll be buying, and if the imagery is excellent, it will help them visualize owning that product.
  • The product description helps buyers understand what specifically they are getting. Is the product description detailed enough to convey all the relevant information in a compelling way without boring the potential buyer?
  • Signs that your business is established and run professionally are a must. How many sales have you made? How many 5 star ratings do you have? What have other people said about their experience with your shop?
  • The price of items in the store matters tremendously. Buyers will wonder: Is this item too expensive for me? Is this item an item of quality or is it cheap?

All of these factors impact a buyer’s decision when they come to your shop from Promoted Listings— and they are all worth investing time and energy into to ensure you get the best return on your investment.

Understanding the Profitability of your Promoted Listings

Now that you understand what will impact your success in getting more buyers through the marketing funnel by using Promoted Listings, it’s important to take a moment to think through the financial impact of your Promoted Listings. More sales is good right? Well, not always. Promoted Listings is a great tool to drive more sales, but it should only be used if it can profitably boost sales. Etsy recently launched a monthly email that captures your monthly Promoted Listings statistics. This email offers a straightforward way to think about whether the advertising tool is working for you. It shows you how much you spent on Promoted Listings over the past month, and how much revenue you earned in return from the tool. To understand whether or not your strategy is working, take the revenue you achieved using the tool and divide it by the amount you spent. In general, if you get a number that is 2 or greater, you are doing fairly well. That means that for every dollar you invest in Promoted Listings, you are getting at least 2 back. That said, each seller needs to ensure that they can afford the promotional expense on top of all of the other expenses that go into making, marketing and shipping their products.

Let’s use an example to illustrate the point. Imagine you only sold coffee tables on Etsy and were running a Promoted Listings campaign on the coffee tables. Imagine that in the month of August, you sold 4 Coffee tables due to Promoted Listings. Each one of them was 100 dollars. So you earned 400 dollars in revenue. Your Promoted Listings spend during that time period was 100 dollars. That means that for every dollar you spent you got 4 back. Or, your Cost per Acquisition was 25 dollars to get your 100 dollars of revenue. In order to understand if this is a good deal for you, you need to know how much it cost you to make and ship the table and how much profit you expect to make on each table you sell. If it cost you 15 dollars of materials and 30 dollars of labor, then all in all it cost you 15 + 30 + 25 = 70 dollars to sell your 100 dollar table. That leaves you with 30 dollars of profit. If 30 dollars (or 30%) is a sufficient level of profit for you and your business, then your campaign looks successful. For a more detailed look at calculating your profitability with online advertising, you can refer to Is Online Advertising Right for You?.

Promoted Listings can be an effective advertising tool, but in order to use it successfully, it is important to always keep an eye on the return you are getting from it. If your return isn’t looking good, then start experimenting with the different components we’ve outlined above. Keep trying new things until you find a combination of things that works for your listings. Often it is easier to focus on one or two listings to get those right first before expanding your strategy to include more of your listings. When it comes to judging your experiments, using the monthly email as a benchmark is good practice because often it takes time for your tests to play out. You may see no results for the first few days of an experiment, but a month is enough time to know for sure whether or not a strategy is working.

In the end it may be that the products you sell just don’t work for Promoted Listings, and that’s ok too. Online advertising isn’t right for every shop. That said, by detailing many of the elements that impact Promoted Listings success, we hope you now have the tools you need to work on your strategy and then decide if Promoted Listings is a good option for you.

Head to Promoted Listings to apply these principles.