When calculating the true ROI of a Promoted Listings campaign, beyond the immediate sales, what less obvious factor needs careful consideration to avoid overstating the success?
When calculating the true return on investment (ROI) of a Promoted Listings campaign, a crucial, often overlooked factor is the 'organic lift' displacement. Organic lift refers to the sales that would have occurred naturally through organic search results, without the paid promotion. Promoted Listings can sometimes simply shift sales *fromorganic results *topaid results, creating the illusion of increased sales when, in reality, you're just paying for sales you would have gotten anyway. Failing to account for this organic displacement leads to an *overstatedROI because you're attributing all promoted listing sales as incremental when some portion was likely already going to happen. To accurately assess the ROI, you must estimate the baseline organic sales for the promoted items during the campaign period. This can be done by analyzing the pre-campaign sales trends of those specific listings or similar items. You then compare the total sales during the campaign to this projected organic baseline. The *differencerepresents the truly incremental sales generated by the Promoted Listings. For example, if an item typically sells 10 units per week organically, and during a Promoted Listings campaign, it sells 15, only 5 units are genuinely attributable to the campaign itself for ROI calculation purposes. Neglecting to factor in this organic displacement can lead to flawed decision-making, causing you to overinvest in Promoted Listings that aren't truly driving incremental profit.