Etsy's Strategic Boost in Search Engine Marketing Drives Q2 2025 Growth

The term "search engine" appears in the context of Etsy’s marketing spend and strategy, specifically relating to search engine marketing (SEM) as part of their broader performance marketing efforts. The discussion highlights how Etsy is investing in paid search channels, including Google Product Listing Ads (PLA), to drive growth in Gross Merchandise Sales (GMS) and revenue.

Context and Key Points

• Marketing Spend Increase Including Search Engine Marketing:
  Etsy increased its consolidated marketing spend by 16% year-over-year to $212 million, which represented 31.5% of revenue. This increase was primarily driven by higher performance marketing spend, explicitly including search engine marketing, PLA, and paid social channels.

  "Second quarter consolidated marketing spend increased 16% year-over-year to $212 million, representing 31.5% of revenue primarily due to increased performance marketing spend versus the prior year, including search engine marketing, PLA and paid social."

• Google PLA Market Dynamics and Auction Performance:
  Etsy benefited from competitive spending patterns in Google PLA markets during Q2 2025. While cost-per-click (CPC) remained stable, Etsy gained a higher click share in auctions, enabling more productive marketing spend. This suggests Etsy’s ads were more competitive and efficient in capturing shopper attention on Google’s search engine platforms.

  "First, competitive spending patterns in the Google PLA markets were helpful to the Etsy marketplace during the second quarter. While CPCs were relatively stable, we gained a higher click share in auctions to drive more productive spend, and we leaned into investments in an ROI-positive way."

• New Segmentation Tactic for Google Shopping Listings:
  Etsy implemented a new segmentation tactic to optimize Google Shopping listings by prioritizing listings with stronger click history and higher investment returns. This tactic provided Google with a stronger performance signal, resulting in significant lifts to both GMS and revenue. Etsy plans to expand this approach in the U.S. and test it in the U.K.

  "During the quarter, we successfully implemented a new segmentation tactic to optimize Google Shopping listings. This approach allowed us to prioritize listings with more click history and higher investment returns, thus providing Google with a stronger performance signal, which resulted in significant lifts to both GMS and revenue."

Strategic Implications

• Focused Investment in Search Engine Marketing:
  Etsy views search engine marketing as a critical lever to drive marketplace growth and revenue. The company is actively optimizing its spend to improve efficiency and returns, indicating a data-driven approach to SEM.

• Leveraging Google’s Ecosystem:
  By improving auction performance and optimizing Google Shopping listings, Etsy is deepening its integration with Google’s search engine advertising ecosystem, which is a key channel for customer acquisition and product discovery.

• Balanced Marketing Mix:
  Search engine marketing is part of a broader marketing strategy that also includes paid social and owned channels (email, push notifications). Etsy is balancing investments across these channels to maximize visibility and GMS growth.

Summary

Etsy’s mention of "search engine" centers on its strategic use of search engine marketing, particularly Google PLA, as a vital component of its performance marketing efforts. The company increased marketing spend in this area, optimized listing segmentation to improve ad performance, and gained auction share to drive more efficient spend. These actions contributed to meaningful lifts in GMS and revenue, underscoring Etsy’s commitment to leveraging search engine platforms to enhance marketplace growth.

"We believe we cut some momentum from this dynamic, but that's only part of the story... We'll continue expanding this segmentation tactic in the United States and are also testing it in the U.K."