On Sunday, Etsy joined an elite group of leading global brands by advertising during the Super Bowl.
With a reported $7 million price tag per 30-second spot, this represents one of the most expensive ad real estate on network television.
Frankly, the reception of the ad was mixed on seller forums and social media networks.
Some commentators argued that this expenditure was wasteful, especially in light of the company’s recent news about layoffs.
Others complained they chose to promote “Gift Mode,” a new interactive platform for gift-giving that merges AI and human expertise to assist shoppers in discovering ideal presents for any event.
But it was not all negative. Some users praised the commercial’s content or Etsy’s bold move to attract a broader market.
Indeed, this was a massive gamble (pun intended, as the game was played in Las Vegas) for a company of Etsy’s size that traditionally has relied on more focused ad strategies.
Etsy’s venture into television advertising has been a continuing effort, with previous instances including 2021, when it secured ad space on Olympic viewing networks.
Etsy often produced versions of varying lengths and placed them on social media ad networks to support these television campaigns,
Yet, despite the splashy nature of the television and video ads, its primary ad strategy has been through online link-based advertising, promoting both the brand and individual Etsy listings.
The company also entered the influencer market through an invite-only affiliate program.
Some of these link-based programs are part of its Offsite Ads initiative, which requires larger sellers to contribute a portion of the campaign’s cost through a result-based advertising fee.
This nearly four-year-old program still generates negative emotions among select sellers and was one of the grievances of disgruntled Etsy sellers during the “Etsy Strike” in 2022.
So, despite previous forays into television advertising, entering the “big boys arena” of a super high-profile and expensive ad buy with a Super Bowl commercial represents a significant investment.
The question today is: was it worth it?
For solopreneurs and small business sellers, it’s unfathomably to understand paying $7 million for a single advertisement.
Considering that marketing budgets typically range from 5% – 25% of sales, on the low end, the ad should have generated a minimum of $140 million in revenue.
But Etsy’s revenue is only a portion of the sale, as it only collects selling-related fees from its sellers, meaning that the single Super Bowl ad should have generated around eight times that in Gross Merchandise Volume or just over 1 billion in goods sold.
This is where the disconnect happens between small business owners and larger enterprises such as Etsy.
Most small businesses look at advertising in a shorter time frame. For example, they want to see X in sales based on Y in campaign spending over, let’s say, 30 days.
For companies that reached a larger scale, such as Etsy has become, they look at advertising slightly differently.
Yes, they still make short-term calculations and marketing strategy adjustments to evaluate the success or failure of a promotional campaign, but they also look at potential long-term benefits.
This type of advertising is called brand advertising or “branding.”
Brand advertising is a strategic marketing approach to build and maintain awareness, reputation, and loyalty for a particular company, product, or service.
It focuses on creating a distinct identity and perception in the minds of consumers through consistent messaging, imagery, and experiences.
Over time, effective brand advertising can foster trust, credibility, and goodwill, ultimately driving customer preference, retention, and advocacy.
For companies like Etsy, it’s about cultivating a robust and enduring brand presence that transcends individual or more direct marketing campaigns such as the aforementioned link-based campaigns.
Super Bowl Ads Build Brand Identity
The audience of more than 100 million Americans watching a single sporting event makes the Super Bowl an interesting prospect to further a company’s brand identity.
If you sell on Etsy or other marketplaces, you generally know that Etsy is a platform with a more niche space in ecommerce, focusing on custom and unique handmade products.
But while Etsy may be a household name in your home, it may be less known or understood among Americans.
Many publications publish lists scoring companies by brand value. Since no agreed-upon methodology exists, comparing valuations between different lists is challenging.
But one of the more trusted lists is compiled by BrandFinance. Amazon ranked in the number one spot on its US500 list for 2023, with eBay at 147. Etsy did not make that list, nor did any other marketplace.
While small merchants may dismiss the idea of brand identity on a large scale, the reality is that it’s essential for long-term success.
It’s why even household names like Disney or Microsoft seek out branding opportunities to keep their name in the people’s heads.
The strategy for brand advertising varies, but the repeat nature of many repeat advertisers during the Super Bowl clearly shows it has a high impact.
While brands may be popular among niches or enthusiasts, the Super Bowl allows brands to escape the confines of its historically more narrow focus to reach a broader audience.
This is especially meaningful for brands that can be attractive to a broader audience, but their historic scale hasn’t made it financially feasible to consider stepping out of their comfort zone.
The Super Bowl has become a cultural phenomenon in the U.S., almost holiday-like, consistently being the most-watched television broadcast of the year. Only the moon landing in 1969 has eclipsed the Super Bowl all-time (so far).
That’s a commercial and unique achievement. It’s why companies want to associate with the biggest game and television event of the year.
Did It Work for Etsy?
Honestly, it’s hard to judge right now. But Etsy had an excellent placement just before the halftime show, one that many non-NFL fans watch versus the actual game.
Etsy focused on its uniqueness, which some sellers I saw mocked, but it was easy for a layperson to understand. Also, the company didn’t spend $1 million or more on some Movie or Popular Star to appear in their ad.
None of the commercials I have seen in years ever compared with the Budweiser Frogs, one of the most iconic series of Super Bowl commercials.
I can’t imagine how much money Budweiser shelled to Leniol Messi for its Michelob ULTRA commercial, but I suspect that is a long-term deal.
For sellers that think it was a waste of money, consider this. At the end of September (nine months into its full year of 2023), the company spent $498 million on marketing, up $33 million from 2022. It might surprise some sellers, but that is about 1/4 of their revenue!
So, $7 million, by comparison, is not that much, even if one includes the production costs. Its concept didn’t match the Budweiser Frogs, but neither has anyone else’s Super Bowl ad.
The company will report its full-year financial report later this month, and it will be interesting if they will mention the Super Bowl ad and their take on the effort.
In my view, the Super Bowl ad was worth the gamble, and I like to see them repeat it next year. A little consistency in being placed among some of the top-tier brands is good for Etsy to build a broader brand identity, which should support its long-term success.
Brand advertising is a marathon, not a sprint, and while I understand some sellers may be skeptical, the value proposition must be looked upon in the long term, not the typical shorter timeframe more applicable to small businesses.
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