Generative Research @ Etsy

Bringing Third Party Ads to Etsy

Business Context & Opportunity

Etsy was exploring new revenue streams that wouldn't impact their take rate (which was already at the high end compared to other ecommerce platforms). Post-purchase advertising through third-party partnerships presented a potential $35M annual revenue opportunity without directly affecting sellers' costs. The team needed to validate this opportunity while ensuring it wouldn't negatively impact the user experience or Etsy's brand perception.

Challenge

How might Etsy introduce post-purchase third-party offers that generate revenue while maintaining brand integrity and positive buyer sentiment?

Research Questions

  • How would post-purchase offers impact buyers' perception of the Etsy brand?

  • Would these offers affect buyers' future intent to shop on Etsy?

  • Do buyers find these offers relevant and personalized?

  • How do buyers perceive various advertiser categories in relation to Etsy's brand identity?

My Role & Responsibilities

  • Led qualitative research planning and execution

  • Designed and conducted 1:1 moderated interviews with 8 habitual Etsy buyers

  • Facilitated brand alignment exercises to assess category fit

  • Synthesized findings into actionable recommendations

  • Collaborated with quantitative research to build a comprehensive evaluation framework

  • Contributed to research design for 30-day pilot experiment

Research Methodology

Qualitative Phase:

  • 10 in-depth interviews with habitual Etsy buyers

  • Interactive evaluation of prototype post-purchase offer screens

  • Brand alignment exercise with various advertiser categories and specific brands

Quantitative Phase:

  • 30-day A/B test with Rokt (third-party advertising platform)

  • Post-experiment survey to measure brand sentiment, future purchase intent, and offer relevance

  • Target sample size: 250-500 respondents who experienced the offers

Key Findings

Brand Perception & User Sentiment

  • Most buyers indicated post-purchase offers wouldn't deter them from making future purchases on Etsy

  • However, concerns emerged about Etsy becoming "too commercialized" or "selling out"

  • Buyers expressed strong loyalty to individual Etsy sellers over the platform itself

  • Many buyers worried about potential negative impacts on Etsy sellers

Category & Brand Alignment

Buyers evaluated brand fit based on:

  • Complementary vs. competitive offerings

  • Alignment with Etsy's core values (uniqueness, creativity, small businesses)

  • Personal relevance and value

  • Context of their recent purchase

Most aligned categories:

  • Etsy's own offers (gift cards, app downloads)

  • Gifts & occasions

  • Food & beverage (especially gift-related)

Least aligned categories:

  • Financial services

  • B2B offerings

  • Large corporate retailers that compete with Etsy sellers

User Experience Considerations

  • Buyers strongly preferred personalized, contextually relevant offers

  • Placement timing was crucial - post-purchase was less disruptive than during browsing

  • Transparency in offers was important (clear terms, no bait-and-switch)

  • Some buyers expressed "ad fatigue" from seeing similar offers across multiple platforms

Impact & Outcome

  • Research directly influenced the decision to proceed with a limited 3-6 month extended test

  • Findings led to specific product improvements:

    • Stricter frequency caps to address negative sentiment among repeat purchasers

    • Customized targeting to limit exposure for most brand-sensitive segments

    • Refined copy to better align with Etsy's mission

  • Research identified key metrics for long-term evaluation:

    • Brand sentiment

    • Future purchase intent

    • Actual purchase frequency over time

    • Engagement differences across platforms and buyer segments

Reflections & Learnings

  • Balancing commercial interests with brand perception requires careful consideration of user values

  • Users have complex, nuanced relationships with platforms versus their sellers/content creators

  • Seemingly small UX decisions can significantly impact brand perception

  • Combining qualitative insights with quantitative measurement provides deeper understanding than either alone

  • Effective cross-functional collaboration between research, product, product marketing and business development teams was essential for success

Next Steps

  • Develop longitudinal research plan to monitor brand sentiment over extended exposure

  • Explore ways to better align third-party offers with Etsy's core values and seller interests

  • Investigate opportunities to personalize offer selection based on purchase context

  • Continue refinement of targeting parameters to minimize negative sentiment

Next

Improving Noom's Buyflow Experience