Podcast Summary: "Are Etsy Ads Worth it? – with EcomHannah"

Podcast Information:

• Title: How to Sell Your Stuff on Etsy
• Host: Lizzie Smiley
• Episode: Are Etsy Ads Worth it? – with EcomHannah
• Release Date: March 27, 2025

Introduction

In this insightful episode of How to Sell Your Stuff on Etsy, host Lizzie Smiley welcomes Hannah Gardner, known as EcomHannah, a seven-figure Etsy and Shopify seller with extensive experience across platforms like Amazon and Wayfair. Together, they delve deep into the controversial topic of Etsy ads, exploring their effectiveness, potential pitfalls, and strategies for maximizing returns.

Understanding the Controversy Surrounding Etsy Ads

Lizzie initiates the conversation by addressing why Etsy ads are such a hot topic, receiving criticism from both proponents and skeptics.

Lizzie [04:05]:
"Why are Etsy ads so controversial? Like, there's so much heat from both directions."

Hannah explains that the fear surrounding Etsy ads stems from their variable and often unpredictable marketing costs, which can significantly impact a seller's profitability.

Hannah [04:05]:
"Ads are scary, right? There's a huge variable cost... that can make or break whether or not you make money at the end of the month."

She emphasizes that many sellers prematurely judge the effectiveness of Etsy ads by monitoring them for too short a period, leading to misconceptions about their viability.

When Are Etsy Ads Worth Investing In?

The discussion transitions to identifying the right moment to invest in Etsy ads. Hannah advises that sellers should only consider ads once they've established a steady stream of organic sales.

Hannah [07:14]:
"I always recommend don't turn on Etsy ads unless you've proven to make listings that sell well organically and consistently."

Lizzie shares her personal experience of doubling her sales by investing in ads after ensuring her products had consistent organic performance.

Lizzie [08:12]:
"In my Etsy shop, when I added my signs and had proven products, I felt comfortable to try ads. It more than doubled my sales easily."

Budgeting and Scaling Etsy Ads Effectively

A significant portion of the episode focuses on budgeting strategies for Etsy ads. Hannah introduces the concept of maintaining or increasing ad spend without retracting it, even if immediate returns fluctuate.

Hannah [10:13]:
"Your daily budget is something. If you're going from $5 to $10, you don't go back to $5. You only continue to hedge up."

She uses a pie chart analogy to illustrate how marketing costs should remain a slim portion of overall sales to maximize profit margins.

Hannah [12:01]:
"Your profit piece of the pie should be as big as possible, while your marketing cost percentage should be as skinny as possible."

Lizzie echoes the importance of monitoring ad performance and adjusting budgets to ensure profitability.

Lizzie [17:20]:
"If it's working towards the keywords you're using, it should scale accordingly. Otherwise, Etsy just won't spend the whole spend."

Evaluating Listing Performance with Ads

The conversation moves to assessing which listings deserve ad spend. Hannah stresses the importance of evaluating listings based on their ability to maintain target profit margins when ads are applied.

Hannah [23:15]:
"You 100% want to keep your ads on even if your listing is already a bestseller."

She explains that ads can help sustain and enhance the visibility of top-performing listings, ensuring continued profitability despite fluctuating search algorithms.

Utilizing Profit Tree for Better Ad Management

While primarily a promotional segment, Hannah briefly touches upon her tool, Profit Tree, which aids Etsy sellers in tracking real-time profits and managing ad spend effectively.

Hannah [29:21]:
"Profit Tree shows you this pie chart... your ad cost percentage, are you still making your target profit?"

This tool encapsulates the strategies discussed, offering sellers actionable insights to optimize their advertising efforts without getting overwhelmed by numbers.

Key Takeaways and Best Practices

• Establish Organic Success First: Ensure your listings perform consistently well without ads before investing in advertising.
• Consistent Budgeting: Increase ad spend gradually without reducing it, allowing for data-driven optimizations.
• Monitor Profit Margins: Always prioritize listings that meet or exceed target profit margins when running ads.
• Long-Term Investment: View ads as a long-term strategy rather than expecting immediate returns.

Notable Quotes

• Hannah [04:05]:
  "Ads are scary... it can make or break whether or not you make money at the end of the month."

• Hannah [10:13]:
  "If you're going from $5 to $10, you don't go back to $5. You only continue to hedge up."

• Hannah [23:15]:
  "You 100% want to keep your ads on even if your listing is already a bestseller."

Conclusion

The episode provides a comprehensive analysis of Etsy ads, debunking myths and offering practical advice for sellers looking to expand their reach and profitability. Hannah Gardner's expertise sheds light on how strategic ad spending, grounded in solid organic performance, can transform an Etsy shop's success. Sellers are encouraged to adopt a data-driven approach, leveraging tools like Profit Tree to navigate the complexities of advertising on Etsy effectively.

For More Information:

• Podcast Website: howtosellyourstuff.com
• Profit Tree: [Link in Show Notes]
• EcomHannah YouTube Channel: EcomHannah