Etsy Ramps Up Marketing in Reversal After Pullback
Online marketplace spent first quarter learning it needs marketing.
Consumers can expect to see a lot more marketing from Etsy beginning this month, as the online marketplace invests in mature channels, including digital video and TV. It’s a marked departure from the first quarter, when Etsy pulled back on marketing so much that it ran no TV ads at all. It also paused social channels, affiliate marketing and search engine marketing.
“We intentionally took our foot off the gas with marketing to tune our attribution models,” said Josh Silverman, CEO of the Brooklyn-based brand, on a recent earnings call with investors. It took Etsy the three-month-long period to find out that channels like TV, which drive high brand awareness, are worth the money.
“We believe TV, cable, and digital video are all potentially great channels for Etsy to reach broad audiences, further enhancing loyalty to our brand and without a dependency on referral sources like Google or Facebook,” said Silverman on the call.
Earlier this month, Etsy debuted a new TV spot called “Favorite Finds for All of Life’s Moments,” which showcases the brand as a shopping destination for products that will become favorites and includes over 20 Etsy sellers. The commercial will run on national cable and some primetime networks as well as through digital channels. Etsy worked with Frank Collective, according to an spokeswoman for the brand. In the past, Etsy has worked with Office of Baby, which was recently renamed Interesting Development.
This isn’t the first time Etsy has paused marketing in order to examine its returns. In 2017, the 14-year-old company, which went public in 2015, suspended its larger brand campaign in order to focus on customer experience and payment safety.
Despite the dip in marketing spend, Etsy still saw revenue increase 40 percent to $169.3 million over the quarter. Net income was $31.6 million, more than double the year-earlier period. Analysts were impressed.
“The company pulled back on marketing spend in certain channels as it used the quarter to re-calibrate return-on-investment attribution models, and this has led to increased confidence in a spending plan we expect to gain steam throughout the year,” wrote Canaccord Genuity retail analysts in a recent report.
Silverman noted that Etsy will continue to ramp up its marketing for the remainder of the year. He noted the importance in building a brand that is not reliant on “referral streams like Google and Facebook.”
“TV is a channel that can scale very well and continue to build loyalty to us as a destination,” he said.