Note: This article was originally titled "Etsy Listens to Sellers by Unbundling Ad Programs."
Many sellers called Etsy's decision in August to merge Google Ads with its own Promoted Listing ads a costly disaster. Apparently they voted with their pocketbooks, because today, the company announced a new offering that sees the two programs unbundled.
Etsy explained in its announcement to sellers, "Now when you run an Etsy Ads campaign, your budget will only go toward advertising your listings to shoppers on Etsy. Google is now part of Offsite Ads, so we'll no longer use your Etsy Ads budget for Google Shopping."
In the summer, Etsy had pitched the merging of the two programs by explaining, "Sellers can now set one budget, and Etsy will leverage its data insights and marketing expertise to optimize how their dollars are spent across channels."
The problem, according to sellers, was not only a lack of control over where their budget was spent, but some sellers said the program ate up their budget too quickly with little or nothing to show for it in terms of sales.
But 5 months after launching the "new" Etsy Ads program, there was a sign the company was reconsidering the move. As we reported in the
AuctionBytes Blog, Etsy surveyed sellers about the program in January.
One seller explained in a comment on the blog post that they used to spend anywhere from 50 cents to $10/day on Etsy Promoted Listings, with a return of about $600 - $800 per week. After Etsy merged Promoted Listings and Google Ads: "Now it’s a $1.00 per bid and I have sold very little."
Today, Etsy said it will pay for Google Ads through the new Offsite Ads programs, and sellers will only pay if the ad results in a sale.
While the program is optional for many sellers, it's mandatory for some. Etsy explained:
"If you've made more than $10,000 USD in sales on Etsy in a 12-month period you'll benefit most from Offsite Ads. So, you'll be required to participate for the lifetime of your shop and you'll get a discounted advertising fee."
You can find more information on the
Etsy Announcement board. As you go through the details, let us know how the changes will impact your Shop.
Update 2/26/2020: The devil is in the details - the cost of Offsite Ads is 15%. Here's an excerpt of an email Etsy sent to a reader (thanks for sharing!):
"Here's how it works: Our offsite advertising service promotes your items on Google, Facebook, Instagram, Pinterest, and Bing. When a shopper clicks on an online ad featuring one of your listings and purchases from your shop within 30 days, you'll pay a 15% advertising fee on that order. You'll only pay an advertising fee when you make a sale. Plus: Our experienced team of advertising experts manage and optimize everything for you, so you can focus on the other parts of your business.
"When this service launches in a few weeks, you'll be automatically enrolled and you'll see exactly how many sales you're getting from Offsite Ads on your new dashboard. You'll start being charged later in April, but if you don't want this additional traffic to your shop you can turn off Offsite Ads at that time."
Update 2/26/2020: Another reader forwarded the letter they received - the seller is required to participate in the Offsite Ad program and will pay 12% instead of 15% for resulting sales. Here's an excerpt of Etsy's letter:
"Here's how it works: Offsite Ads advertises your items on Google, Facebook, Instagram, Pinterest, and Bing. When a shopper clicks on an online ad featuring one of your listings and purchases from your shop within 30 days, you'll pay an advertising fee on that order. You'll only pay an advertising fee when you make a sale. Plus: Our experienced team of advertising experts manage and optimize everything for you, so you can focus on the other parts of your business.
"Your shop is a success story - you made more than $10,000 USD in sales in the past 12 months. That means you'll benefit most from this advertising service, so you'll be required to participate. You'll also get a discounted rate of 12% for the lifetime of your shop, while most sellers will pay a 15% fee.
"This update shouldn't have a big effect on your bottom line. Based on your sales this year, we estimate that this fee will apply to less than 5% of your sales.
"You'll be able to see exactly how many sales you're getting from Offsite Ads on your new dashboard, which will be available in a few weeks, and you'll start being charged later in April."
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Etsy Unbundles Ads but Google Ads Mandatory for Some