— Glossary
Every term, defined by operators
81 definitions of the metrics, platform concepts, and measurement terms that run paid media — written in plain English, with the operator nuance the textbook version leaves out.
— Metrics & economics
AOV (average order value)AOV is total revenue divided by number of orders — the starting point of every ecommerce unit-economics calculation.Read the full definitionBlended ROASBlended ROAS is total business revenue divided by total ad spend across every channel, taken from the store or finance records rather than from any ad platform. It is the inverse of MER.Read the full definitionBreakeven ROASBreakeven ROAS is the return on ad spend at which advertising exactly covers its own cost after product, fulfillment, and payment costs. It equals AOV divided by contribution margin per order.Read the full definitionCAC (customer acquisition cost)CAC is the fully loaded cost of acquiring one new customer: ad spend plus the sales and marketing costs attributable to new business, divided by new customers only.Read the full definitionCAC payback periodCAC payback is the number of months a new customer’s gross margin takes to repay their acquisition cost: CAC divided by (monthly revenue per customer × gross margin).Read the full definitionChurn rateChurn rate is the share of paying subscribers who cancel or lapse in a period, usually a month. It sets how long a customer pays and therefore how much acquisition a subscription business can afford.Read the full definitionCohort retentionCohort retention tracks what share of the customers acquired in one period are still active, paying, or buying in each later period. It shows how customer quality changes over time and by acquisition source, which a company-wide average hides.Read the full definitionContribution marginContribution margin is what remains of an order after variable costs — product cost, shipping and fulfillment, payment and platform fees, returns allowance. It is the money available to pay for advertising and profit.Read the full definitionConversion rateConversion rate is conversions divided by clicks (or sessions) — the share of traffic that completes the goal action. Ecommerce paid traffic typically lands between 1.5% and 3%.Read the full definitionCPA (cost per acquisition)CPA is advertising spend divided by conversions — the cost of one purchase, lead, or signup. Breakeven CPA for ecommerce equals contribution margin per order.Read the full definitionCPC (cost per click)CPC is advertising spend divided by clicks. In auction platforms it is an output of competition and quality, not a price you simply choose.Read the full definitionCPM (cost per thousand impressions)CPM is the cost of one thousand ad impressions — the native pricing unit of social and display auctions.Read the full definitionCTR (click-through rate)CTR is clicks divided by impressions — the share of people who saw an ad and clicked it. It measures message-audience fit, not business results.Read the full definitionFirst-order profitabilityFirst-order profitability is the rule that a new customer must be profitable on their first purchase: the contribution margin of the first order has to cover the cost of acquiring the customer, with repeat purchases treated as upside rather than as the plan.Read the full definitionIncrementalityIncrementality is the share of conversions that advertising actually caused — conversions that would not have happened without the ads, as opposed to conversions the ads merely touched.Read the full definitionLTV (customer lifetime value)LTV is the total value a customer generates over their relationship with the business — honestly computed as contribution margin per cohort over time, not revenue.Read the full definitionLTV:CAC ratioLTV:CAC compares customer lifetime value to acquisition cost. The conventional healthy floor is 3:1 on gross-margin LTV; below 1:1 every customer loses money.Read the full definitionMarginal ROASMarginal ROAS is the revenue returned by the last increment of ad spend, divided by that increment. It answers whether the next dollar is worth spending, which average ROAS cannot, because an average includes every cheaper dollar that came before it.Read the full definitionMER (marketing efficiency ratio)MER is total marketing spend divided by total business revenue, expressed as a percentage, where lower is better. A 20% MER means one-fifth of revenue goes to advertising.Read the full definitionNet revenueNet revenue is what the business keeps from sales after discounts, refunds, and returns, and excluding taxes and shipping charged to the customer. It is the revenue figure paid media should ultimately be judged against.Read the full definitionNew-customer CACNew-customer CAC is ad spend divided by the number of first-time customers acquired in the same period. It is the acquisition cost growth actually depends on, because it excludes repeat buyers who inflate every blended cost figure.Read the full definitionNew-customer ROAS (NC-ROAS)New-customer ROAS is revenue from first-time customers divided by ad spend. It strips out repeat buyers who were coming back anyway, so it measures what paid media is doing for acquisition rather than for retention.Read the full definitionPOAS (profit on ad spend)POAS is gross profit generated per unit of ad spend — the same arithmetic as ROAS with margin instead of revenue in the numerator. It re-ranks campaigns by what they contribute, not what they turn over.Read the full definitionRepeat purchase rateRepeat purchase rate is the share of customers acquired in a period who buy again within a defined window, such as 90 or 365 days. It is the input that decides how much a brand can afford to pay for a first order.Read the full definitionROAS (return on ad spend)ROAS is revenue attributed to advertising divided by advertising spend. A 4.0 ROAS means $4 of tracked revenue per $1 of ad spend — before any product or fulfillment costs.Read the full definitionTrial-to-paid conversion rateTrial-to-paid conversion rate is the share of free trials that become paying subscriptions within a defined window. It links acquisition cost per trial to acquisition cost per paying customer.Read the full definition
— Google Ads
Asset groupAn asset group is Performance Max’s creative unit: a themed collection of headlines, descriptions, images, videos, and audience signals from which Google assembles ads for every surface.Read the full definitionBrand exclusionsBrand exclusions are campaign-level controls that stop Performance Max and other automated campaigns from serving on searches for your own brand, keeping brand traffic in dedicated campaigns.Read the full definitionBroad matchBroad match is the loosest keyword match type: ads may serve on any search Google considers related in meaning to the keyword, including searches sharing no words with it.Read the full definitionCustom labelsCustom labels (custom_label_0 through _4) are five free-text feed attributes used to segment products in Shopping and Performance Max — most powerfully by margin band, price tier, or lifecycle stage.Read the full definitionDemand Gen campaignsDemand Gen is Google’s visually led campaign type serving YouTube (including Shorts), Discover, and Gmail — Google’s answer to social-style feeds, aimed at generating rather than capturing demand.Read the full definitionDynamic Search Ads (DSAs)Dynamic Search Ads target searches by matching them to your website content instead of keywords — Google generates the headline and landing page from your site.Read the full definitionExact matchExact match serves ads on searches that share the same meaning or intent as the keyword — including close variants, reorderings, and paraphrases, not just the literal string.Read the full definitionGoogle Merchant CenterMerchant Center is where your product feed lives: it ingests, validates, and serves product data to Shopping ads, Performance Max, and free listings.Read the full definitionImpression shareImpression share is the percentage of eligible auctions in which your ad actually appeared. Lost impression share is split into "lost to budget" and "lost to rank".Read the full definitionLearning phaseThe learning phase is the period after a campaign launch or significant change during which the bidding algorithm recalibrates. Performance is typically volatile until enough new conversion data accumulates.Read the full definitionNegative keywordsNegative keywords prevent ads from serving on specified searches. They are the primary steering mechanism in a broad-match, Smart Bidding account.Read the full definitionPerformance MaxPerformance Max (PMax) is Google’s goal-based campaign type that serves across Search, Shopping, YouTube, Display, Discover, Gmail, and Maps from a single campaign, with targeting and placement decided by the algorithm.Read the full definitionPhrase matchPhrase match serves ads on searches that include the meaning of the keyword. It sits between exact and broad match in reach and control.Read the full definitionProduct feedThe product feed is the structured data file describing your catalog — titles, prices, images, availability, identifiers — that Shopping and Performance Max campaigns serve from.Read the full definitionQuality ScoreQuality Score is Google’s 1-10 diagnostic rating of keyword relevance, built from expected CTR, ad relevance, and landing page experience. Higher quality effectively discounts your CPCs.Read the full definitionResponsive search ads (RSAs)Responsive search ads are the default Google search ad format: you supply up to 15 headlines and 4 descriptions, and Google assembles combinations per auction.Read the full definitionSearch terms reportThe search terms report shows the actual queries that triggered your ads — as opposed to the keywords you bought. It is the primary feedback loop for query control and demand discovery.Read the full definitionSmart BiddingSmart Bidding is Google’s auction-time automated bidding, which sets a distinct bid for every auction using contextual signals unavailable to manual bidders. Main strategies: Target ROAS, Target CPA, Maximize Conversions, Maximize Conversion Value.Read the full definitionTarget CPA (tCPA)Target CPA is a Smart Bidding strategy that bids to achieve an average cost per conversion you specify. It suits lead generation and single-price conversions where every conversion is worth roughly the same.Read the full definitionTarget ROAS (tROAS)Target ROAS is a Smart Bidding strategy that bids to achieve an average return on ad spend you specify — e.g., a 400% target asks for $4 of conversion value per $1 spent.Read the full definition
— Meta & paid social
Advantage+ shopping campaignsAdvantage+ shopping campaigns (ASC) are Meta’s automated campaign type: targeting, placement, and budget allocation are algorithmic, and the advertiser’s levers are creative volume, catalog quality, and conversion signals.Read the full definitionAggregated Event Measurement (AEM)Aggregated Event Measurement is Meta’s framework for measuring conversions from users who opt out of tracking (notably on iOS): a limited number of prioritized events are measured in aggregate, privacy-preserving form rather than at the individual level.Read the full definitionAndromedaAndromeda is the name associated with Meta’s machine-learning retrieval engine that selects which ads to consider for each opportunity — the system behind the platform’s improved ability to match ads to people from a huge candidate pool.Read the full definitionBid capBid cap is a Meta bid strategy that sets a hard maximum bid in the auction itself — the most controlling and least forgiving option, used by advertisers who know their marginal value per action and manage to it deliberately.Read the full definitionConversions API (CAPI)The Conversions API is Meta’s server-side event channel: conversions are sent from your server directly to Meta, bypassing browser limitations like ad blockers and cookie restrictions that erode pixel coverage.Read the full definitionCost capCost cap (cost per result goal) is a Meta bid strategy that keeps your average cost per result around a target while maximizing volume under that constraint — an efficiency control that targets an average rather than a hard ceiling.Read the full definitionCreative diversityCreative diversity is how genuinely different the ads in an account are from each other: in the person they speak to, the desire or problem they address, the format, and the visual world. On Meta it matters more than raw creative volume, because very similar ads compete for the same delivery.Read the full definitionCreative fatigueCreative fatigue is the performance decay that occurs as an audience is repeatedly exposed to the same ad: CTR falls, CPM and CPA climb, and the delivery system throttles reach.Read the full definitionEvent match quality (EMQ)Event match quality is Meta’s score for how well the customer parameters you send with a server event (hashed email, phone, and other identifiers) can be matched to a Meta user — higher match quality means more conversions attributed and better optimization.Read the full definitionFrequencyFrequency is the average number of times each person in the audience has seen your ad over a given window — impressions divided by reach.Read the full definitionHighest volume biddingHighest volume (formerly "lowest cost") is Meta’s default bid strategy: it spends the full budget to get as many results as possible with no cost constraint, giving the delivery system maximum freedom to find conversions.Read the full definitionLookalike audienceA lookalike audience is a platform-built audience of users statistically similar to a source list you provide — typically your customers or highest-value converters.Read the full definition
— Measurement & tracking
AttributionAttribution is the assignment of conversion credit to marketing touchpoints — the set of rules deciding which ad, channel, or interaction "caused" a sale.Read the full definitionAttribution windowAn attribution window is the time period after an ad interaction during which a conversion can be credited to it — e.g., 7-day click / 1-day view on Meta, or 30-day click on Google.Read the full definitionConsent modeConsent mode is Google’s framework for adjusting tag behavior based on user consent choices: when consent is denied, tags send cookieless pings that feed conversion modeling instead of setting identifiers.Read the full definitionData-driven attribution (DDA)Data-driven attribution distributes conversion credit across touchpoints using a model trained on converting and non-converting paths, instead of a fixed rule such as last click. It is the default model in Google Ads and GA4.Read the full definitionEnhanced conversionsEnhanced conversions is Google’s mechanism for improving conversion measurement by sending hashed first-party data (email, phone) alongside conversion events, letting Google match conversions to signed-in users when cookies fail.Read the full definitionFirst-party dataFirst-party data is information a business collects directly from its own customers and properties — purchase history, email lists, on-site behavior — as opposed to third-party data purchased from brokers.Read the full definitionLast-click attributionLast-click attribution assigns 100% of conversion credit to the final click before purchase, ignoring every earlier touchpoint in the journey.Read the full definitionMedia mix modeling (MMM)Media mix modeling estimates how much each channel contributes to sales by regressing total outcomes on spend over time, controlling for seasonality, price, and other factors. It needs no user-level tracking, which makes it resilient to privacy changes.Read the full definitionMulti-touch attribution (MTA)Multi-touch attribution distributes conversion credit across multiple touchpoints in the customer journey, using positional rules (linear, time-decay, U-shaped) or data-driven models.Read the full definitionOffline conversion importOffline conversion import (OCI) uploads conversions that happen outside the website — closed deals, qualified leads, phone sales — back to the ad platform, matched via click ID or hashed customer data.Read the full definitionPosition-based attributionPosition-based attribution, sometimes called U-shaped attribution, gives most of the credit for a conversion to the first and last touches and shares the remainder among the touches in between. A common split is 40% first, 40% last, 20% middle.Read the full definitionServer-side trackingServer-side tracking sends conversion events from your server (or a first-party tagging endpoint) to ad platforms, rather than relying solely on browser scripts that ad blockers and privacy features increasingly suppress.Read the full definitionTime-decay attributionTime-decay attribution splits credit for a conversion across the touches before it, giving more credit to touches closer in time to the conversion. The weight usually halves over a fixed interval, called the half-life.Read the full definitionUTM parametersUTM parameters are URL tags (utm_source, utm_medium, utm_campaign, utm_content, utm_term) that identify where a visit came from, feeding analytics tools’ channel and campaign reporting.Read the full definitionView-through conversionA view-through conversion is credited to an ad that was seen but not clicked before the user converted through another path.Read the full definitionWhole-business measurementWhole-business measurement judges paid media against what the business actually banked, by reading four ledgers side by side: what each ad platform claims, what analytics recorded, what first-party tracking saw, and what the store or billing system booked.Read the full definition
— Operating practice
Brand vs non-brandBrand traffic comes from searches containing your name; non-brand from generic category searches. Separating them is the first honesty test of any search account.Read the full definitionDaypartingDayparting is scheduling ads (or adjusting bids) by hour of day and day of week, concentrating spend when the audience converts best.Read the full definitionGeo holdout testA geo holdout test pauses (or launches) advertising in a matched set of geographic regions while keeping it live elsewhere, then compares outcomes to measure the channel’s true incremental effect.Read the full definitionHero SKUA hero SKU is the single product that carries a disproportionate share of a brand’s ad spend, revenue, and new customers. It is usually the reason the account works, and the reason it is fragile.Read the full definitionLanding pageA landing page is the destination a visitor reaches after clicking an ad. Its conversion rate multiplies everything upstream — the same traffic on a page converting at 2.5% versus 2.0% is a 25% budget difference.Read the full definitionRemarketing (retargeting)Remarketing serves ads to people who previously visited your site or engaged with your brand — the warmest cold audience available, and the most commonly over-credited.Read the full definitionSubscribe and saveSubscribe and save is a recurring-order option on a physical product, sold at a discount to the one-time price in exchange for automatic repeat delivery. It trades margin on every order for a more predictable repeat rate.Read the full definition
Definitions are the easy part
Knowing what breakeven ROAS means and knowing yours are different things. The free calculators compute the numbers from your inputs, the free courses put the concepts in working order, and the free audit reads your actual account.