Generative Research @ Etsy

Balancing Revenue Growth with Brand Integrity: Etsy's Post-Purchase Advertising Strategy

Summary

Led mixed-methods research to evaluate a $35M revenue opportunity through post-purchase third-party advertising, ultimately recommending a cautious approach that preserved brand integrity while unlocking new revenue streams.

Key Impact: Research findings directly influenced product strategy, leading to a 3-6 month extended pilot with specific guardrails that reduced negative sentiment by 40% among brand-sensitive users.

The Challenge: When Business Goals Meet Brand Values

Business Context

Etsy faced pressure to diversify revenue streams without increasing their already high take rate (compared to competitors). Post-purchase advertising presented a $35M annual opportunity, but the risk was significant: how do you monetize without compromising the authentic, creator-focused brand that users love?

The Core Tension

Business Need: Generate $35M in new revenue
User/Brand Risk: Potential perception of "selling out" or becoming "too commercialized"
My Challenge: Design research that could quantify this trade-off and identify a path forward

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 Approach: Critical Thinking in Action

Reframing the Research Questions

While stakeholders initially focused on "Will users accept these ads?", I pushed to ask deeper questions:

  • Instead of: "Do users like post-purchase offers?"

  • I asked: "How do these offers change users' relationship with the Etsy brand and individual sellers?"

  • Instead of: "Which ad categories perform best?"

  • I asked: "Which categories align with users' mental model of what Etsy represents?"

Methodology Design: Balancing Speed and Depth

Qualitative Phase (10 interviews):

  • Interactive prototype evaluation to see real reactions

  • Brand alignment exercises to understand mental models

  • Emotional journey mapping to capture sentiment shifts

Quantitative Phase (30-day A/B test):

  • 250-500 participant sample with post-experiment surveys

  • Measured brand sentiment, purchase intent, and behavioral changes

  • Collaborated with data science to design metrics that captured long-term brand health

Key Insights: What I Discovered

1. Users Distinguish Between Platform and Sellers

Critical Finding: Buyers showed strong loyalty to individual Etsy sellers but were more ambivalent about the platform itself.

Why This Mattered: This meant post-purchase ads wouldn't directly hurt seller relationships, but could damage platform trust if executed poorly.

My Recommendation: Frame messaging to emphasize how new revenue could benefit the seller ecosystem.

2. Brand Alignment Isn't Binary

Users evaluated fit based on multiple dimensions:

  • Value alignment: Does this support small businesses and creativity?

  • Purchase context: Does this complement what I just bought?

  • Personal relevance: Is this actually useful to me?

Example: A food & beverage offer after buying handmade kitchenware felt "natural," while financial services felt "invasive and off-brand."

3. Frequency Creates Fatigue

Quote: "I'm already seeing these same offers on Facebook and Amazon. If Etsy becomes just another place showing me the same ads, what makes it special?"

Impact: This insight led to implementing strict frequency caps and platform-specific offer curation.

Navigating Stakeholder Tensions

The Pushback Moment

When initial findings showed mixed sentiment, the business development team wanted to focus only on the positive responses.

I advocated for the full story: While 60% of users said they'd continue shopping on Etsy, the 25% who expressed concerns about commercialization represent our most brand-loyal segment. Losing them could cost us more than we'd gain.

Cross-Functional Collaboration

With Product: Translated user concerns into specific UX requirements (transparency, personalization, frequency limits)

With Marketing: Helped craft messaging that positioned offers as "curated recommendations" rather than ads

With Business Development: Provided criteria for partner selection based on brand alignment research

Systems Thinking: Considering Downstream Impact

Short-term vs. Long-term Trade-offs

I identified potential ripple effects that weren't initially considered:

Seller Impact: How might sellers react to competing offers appearing after their sales?
Platform Perception: Could this change Etsy's positioning in the broader e-commerce landscape?
User Behavior: Might this shift focus from unique finds to mainstream products?

My Framework for Decision-Making

  1. User Impact: How does this change the user's relationship with Etsy?

  2. Brand Consistency: Does this align with Etsy's core value proposition?

  3. Ecosystem Health: How does this affect sellers and long-term platform dynamics?

  4. Measurement Strategy: How will we know if we're moving in the right direction?

Impact & Outcome

Immediate Results

  • Research directly influenced go/no-go decision for full rollout

  • Product improvements implemented based on user feedback:

    • Stricter frequency caps (reduced negative sentiment by 40%)

    • Enhanced personalization algorithms

    • Brand-sensitive user exclusions

Strategic Impact

  • Established framework for evaluating future revenue opportunities against brand values

  • Created measurement dashboard tracking brand health alongside revenue metrics

  • Influenced partner selection criteria for future advertising partnerships

What I Learned

1. Advocacy Through Evidence

Sometimes protecting users means slowing down business initiatives. I learned to present user concerns not as roadblocks, but as strategic considerations that could improve long-term outcomes.

2. Research as Strategic Partner

By reframing the research questions, I helped stakeholders see beyond immediate metrics to consider brand equity and user relationship health.

3. Complexity in Simplicity

Users' relationships with platforms are nuanced. What seemed like a simple "show ads, make money" decision revealed complex dynamics around trust, identity, and value alignment.

Next Steps & Future Considerations

Immediate: Develop longitudinal study to track brand sentiment over extended exposure periods

Strategic: Explore revenue opportunities that actively enhance (rather than just maintain) brand perception

Systematic: Create standardized framework for evaluating new initiatives against brand values

Next

Improving Noom's Buyflow Experience