So it’s just a great demonstration of how we’re getting return on the investment in product.
Debra Wasser: And then there’s two questions that I would say are very connected, one from Shweta Khajuria at ISI Evercore and one from Maria Ripps at Canaccord. Really asking for some initial thoughts on 2024 in terms of marketing and product spend, how we balance growth and profitability, could we expect to see any margin expansion? How are we thinking about next year’s macro? It’s sort of a loaded question around all of the things for 2024 from multiple analysts. So I think I would start maybe with Josh and then Rachel, I think you’ll have a lot to say or whichever one of you want to go first because I think there’s probably both room for both of you here. Josh?
Josh Silverman: Well, we haven’t given 2024 guidance yet. But what I would say is we are always thoughtful about balancing growth and profitability. You have never seen us be a growth at all cost company or throw discipline to the wind. You’ve never seen us try to buy market share indiscriminately. So when — I just was speaking about competition from some of the Chinese recent competitors. And if they drive costs up in the auction too much in performance marketing, let’s say, we’ll go to other channels. But we’re not willing to bid higher than a keyword is worth. We also measure, as you well know, our product development and what value have they created our team, each squad in terms of additional GMS, additional revenue or cost savings.
And I’m really proud of the team and how they’re delivering. We talked about launches being up 40% year-over-year, but productivity is very high. We feel great urgency to be giving everything we can give right now to help our sellers grow at this time to deliver even more value to our buyers and even more value to our shareholders. And so the team is acting with great urgency and we are thoughtful and careful about hiring. We are thoughtful and careful about the investment we make in R&D to make sure that it is delivering it is driving growth. And we’re going to keep doing that. When we see opportunities to invest to grow, we’ll take them, but we’re always going to do it with discipline and care.
Rachel Glaser: And I can just add just a couple of notes on — first on the marketing point, we have been able to scale additional marketing channels. One of them is paid social. So we’ve gotten a number of paid social campaigns to work, and we gradually increased our level of investment in paid social as a channel so that we’re just about at the same level as many of our peers in that space. We’ve also been able to scale CRM, where we’ve got really effective targeted e-mails going to our buyers. And we have also been able to scale internationally. So we’re bringing in many new and reactivated buyers internationally. We talked about being in three markets, but also testing television in Austria and Switzerland in this last quarter.
All of those are campaigns that reach our marginal ROI threshold. On the product side, and Josh will probably talk about this more, but we have really been able to leverage machine learning to make all of our engineers more productive and more efficient so we can develop and produce faster, bringing — decreasing the payback period on our product investment. So we’re always — we’re never really done optimizing. We’ve been able to work down cost on our Google Cloud investment considerably as we’ve leaned into that platform first for our cloud computing costs. And so that all gets baked into our ROI calculations on product development spend.
Debra Wasser: Great. And since we were on the topic of marketing, and you touched on this, but I’ll just ask the specific question we got asked from Sharanjit Cheema. I hope I said that right, at D.A. Davidson. And I’ll give this to Josh. Can you give your current thoughts on advertising, including your efforts on linear TV, OTT and digital advertising, including TikTok. We touched on it, but I might as well ask that.
Josh Silverman: Yes. Great. Great question. So if you look at Etsy back since 2017, and 2017 and 2018 really we’re focused on performance marketing. We’ve gotten a lot better at performance marketing. We’ve got a lot more sophisticated there. Then we started moving up the funnel, we moved into social, social video and then TV above the line. We are getting a lot more sophisticated at TV, and we’re now — the affordability of OTT has been a bit of a challenge for us. The CPMs are just so much higher than linear that you’ve seen us mostly invest in linear are starting to crack the code on being able to pay for OTT and get enough value out of it to have the ROIs really work. Obviously, with OTT, you get more targetability and some other benefits, trackability as well.
So really excited there. But mid-funnel is also an area we’re really working on using things like YouTube and paid social video to find people who are planning a wedding, let’s say, or having a baby. The opportunity to build consideration when you don’t necessarily have a specific product that they’re already looking for, but when you think that they’re in the market generally for things is an area where I think there’s a lot of opportunity for us to continue to get better. We are investing. We are seeing gains. And we have started, for example, insourcing more creative there. So head count has grown a little bit, but actually, we’re paying less agency fees. And when we in-source more of our creative, we can make content for mid-funnel really fast and really cheap, and that allows us to have more targeted content that’s more of the moment.
