Instead of splurging on a latte, I budgeted $5 for one week of Etsy search ads so I could share my experience with you. I love doing experiments and analyzing results. Hopefully, a few of you will find this info helpful.
What is it?
Etsy Search Ads are the new paid advertising option on Etsy. These ads appear at the top of the page and are formatted to look like listings, except they have a light blue background and the word "Ads" at the top.
Keywords
One gripe I've heard from sellers has been that Etsy doesn't allow you to choose your keywords; they choose them for you. You can remove any words you don't like, but you can't add in new words.
Even if you don't plan on using the Etsy search ads, it is worthwhile to
see which words they've chosen for your shop. (You can do this by going into your seller account and choosing "Search Ads" under the Promotion section on the left.) My selected keywords seemed to be all over the place, from the generic "jewelry" to the specific "rodeo" which I used to describe 2 out of the 70+ items in my shop. Looking at the keyword list from Etsy, you might find some keywords that you want to remove from your listings. My keywords have improved over time, so I cleaned up some of my earlier entries based on what Etsy had pulled.
One thing that doesn't seem to be widely publicized about the search ads is that different
words cost different amounts. This hard-to-find keyword list is definitely worth looking at, if only to get ideas for strong keywords to use in your listings.
Featured Items
How does Etsy decide which items to show?
This is purely speculation, but it seemed in my case that the items that were the most heavily promoted for my shop were the ones that did not have any/many hearts.
For example, the "Hope Bracelet" was one of my designs that was near the top of the list of impressions. There's nothing wrong with this simple bracelet, but if you asked me to choose the few projects from my shop that I wanted to promote heavily, this wouldn't have been at the top of the list.
In contrast, my Owl Necklace (which might have made my personal promotion list) was near the bottom of the impressions list, presumably because "necklace" or "owl" weren't keywords Etsy had chosen for me. This necklace has about the same number of views as the bracelet, but more than twice the number of hearts.
These are just two examples; I noticed many more.
I've seen this tactic used by other marketers in other areas, so it wouldn't surprise me if popularity of an item was in Etsy's algorithm. If a
particular product isn't selling well, then use all your marketing
efforts to promote it rather than popular items. (It's similar to what
you see in many schools: focus all your attention on the middle or
bottom of the class and assume that those who are brighter will be fine
without your help.)
Again, this is just speculation my part! You might want to read Etsy official explanation.
Results
In one week, I had more than 4,000 impressions (meaning that one of my images was at the top of the page in an ad slot), 11 views (people clicked and went to the product page), and 1 favorite (heart). (Maddeningly, there doesn't seem to be a way to know which item was marked as a favorite as a result of the ad.) No sales from the ads. However, I did sell a few items that week, including (ironically) the only two items in my shop that Etsy couldn't find any suitable keywords for and did not include in the ads.
You can set the maximum amount you want to spend in a week. It costs roughly $1 per 1,000 impressions. I set my limit at $5 (5,000 impressions); $4.89 was charged.
I didn't try to tweak my keywords or only focus on a few items; I wanted to run a test to see what would happen if I just took the defaults (all the keywords suggested and advertising nearly everything in my shop). I have read in the Etsy Success forum that placing some limits on keywords and the number of items has helped at least one shop, so that's something you could consider.
Conclusion
Looking at my current shop stats, more of my traffic came from free sources such as Facebook, Twitter, and my blog than from paid search. While I may revisit Etsy ads in the future, for now, I'm spending my $5 weekly budget on a pumpkin spice latte. Your mileage may vary.