#239 – Amazon Perishables, eBay 2.0, and Etsy’s advertising black hole

Etsy is beta testing new ad tools for sellers that offer the option to use different strategies for advertisers spending at least $25/day.

If a seller chooses to “explore strategies,” a pop-up encourages them to up their budget to at least $25/day and explains that doing so will increase the relevancy of their ad spots, visibility, and orders, as well as reduce costs and increase ROI.

From there, sellers can choose which strategy to use: 

• Increase Your Orders – increases potential for orders and revenue, but at a higher cost per order. Good for “jumpstarting orders, highly competitive spaces, maximizing seasonal demand.”
• Balance Your Orders With Returns – balances order, revenue, and ad spend for a steady ROI. Good for “consistent growth, efficient spending, steady ROI.”
• Increase Your Return – aimed at reducing costs and increasing ROI, but orders and revenue may decrease. Good for “lowering costs, slower growth, less competitive spaces.”

The strategies explain the potential outcomes, but don't actually explain what's happening behind the scenes to arrive at those outcomes. The new Ads Strategy beta pages only goes onto say, “For best results, give it 30 days for your strategy to take full effect.”

Basically Etsy is saying “Spend more money and trust us, bro.” — which is pretty much where every ad platform is headed, so I can't say I blame them. Although the move kind of positions their ad tools for <$25 Spenders as an inferior product now.

I would have instead gone the Google Ads route and encouraged people to increase their budget by simulating how many more conversions they could expect to generate if they do so, as opposed to promising the relevant placement and ROI that sellers likely already thought they were getting at their current budget. But even that solution is a tip on the iceberg of how awful Etsy's advertising platform is.

Historically Etsy's advertising system has been an “on” or “off” button — where sellers would set a budget, choose which listings to promote, and let Etsy do its thing. There's never been any granular control like with Google or Amazon Ads that allow sellers to choose which keywords they target or how much they're willing to spend per click. You can't even separate products into different campaigns on Etsy, such as to say “Spend $50/day on these three top performing products, and $25/day on these other twelve products.” A seller's only option is to set a storewide budget. 

These new “strategies” are designed to give sellers the feeling of having more control over how their budget is spent, so that Etsy can leverage that feeling into higher ad spend. However despite the new remote control with three buttons, Etsy advertising is still like throwing money into a black hole and hoping a star comes out the other end. Sellers with a $30 product and 60% COGS are bid against other sellers with a similar $30 product and 10% COGS, allowing them no way to build advertising campaigns that take their actual margins into consideration.

I do understand that Etsy is catering to a less sophisticated seller demographic when it comes to advertising technology, but they can still do better than this. If Etsy actually wants to onboard higher volume sellers (which it's been focusing on in recent years), then it needs to build the advertising tools that enable those sellers to run their business responsibly. Enough with the “trust me bro” ad platform.