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Glossary
Plain-English definitions of the ad and ecommerce terms D2C founders use every day, from ROAS, MER and CAC to creative fatigue, Performance Max and the Conversions API, each with its formula and a worked example.
Abandoned cart recovery is the follow-up sent to shoppers who added products to their cart but didn't finish checkout, usually by email or WhatsApp, with a reminder or a small incentive.
Read moreAd frequency is the average number of times each person in your audience saw your ad: impressions divided by reach.
Read moreAdvantage+ sales campaigns, formerly Advantage+ Shopping campaigns, are Meta's automated sales campaigns: Meta's AI chooses audiences, placements and creative combinations from the assets you provide.
Read moreAOV is the average amount a customer spends per order: total revenue divided by the number of orders.
Read moreAn attribution window is the period after someone clicks or views an ad during which a purchase is credited to that ad. Meta's default is 7 days after a click and 1 day after a view.
Read moreAudience overlap happens when two or more of your ad sets target many of the same people, so they compete against each other in the ad auction.
Read moreBlended ROAS, also called MER (marketing efficiency ratio), is total store revenue divided by total ad spend across every channel. It ignores platform attribution entirely.
Read moreBreak-even ROAS is the lowest ROAS at which an ad campaign doesn't lose money on the sale. It equals 1 divided by your contribution margin as a share of revenue.
Read moreBudget pacing is how evenly ad spend is being used against the planned budget over a period, so a monthly budget isn't used up early or left unspent.
Read moreCAC is what it costs, on average, to win one new customer: marketing spend divided by the number of new customers acquired in the same period.
Read moreCAC payback period is how long it takes for the gross profit from a new customer to cover what it cost to acquire them.
Read moreContribution margin is the money left from each sale after its variable costs: product cost, shipping, payment fees, packaging and returns.
Read moreEcommerce conversion rate is the share of store sessions that end in a purchase: orders divided by sessions.
Read moreMeta's Conversions API sends purchases and other events from your server or store platform straight to Meta, so conversions are still measured when browser tracking is blocked.
Read moreCPA is the average ad spend needed to get one conversion, usually a purchase. It is ad spend divided by the number of conversions.
Read moreCPC is the average cost of one click on an ad: ad spend divided by clicks.
Read moreCPM is the cost of showing an ad 1,000 times. It measures how expensive it is to reach people, before anyone clicks.
Read moreCreative fatigue is the decline in an ad's results as the same people see it again and again: click-through rate falls and costs rise while frequency climbs.
Read moreCTR is the share of people who saw an ad and clicked it: clicks divided by impressions.
Read moreLTV is the total gross profit a customer brings your brand over the whole relationship, from the first order through every repeat purchase.
Read moreThe LTV:CAC ratio compares what a customer is worth with what it cost to acquire them. A commonly used target is about 3:1.
Read moreThe Meta Pixel is a snippet of code on your website that records visits, add-to-carts and purchases in the browser and sends them to Meta for measurement, optimisation and retargeting.
Read moreNegative keywords stop your Google Search ads from showing for searches you don't want, such as ‘free’, ‘DIY’ or ‘jobs’, so you stop paying for clicks that never buy.
Read morePerformance Max is a Google Ads campaign type that runs one campaign across Search, Shopping, YouTube, Display, Discover, Gmail and Maps, with Google's AI dividing the budget between them.
Read moreROAS is the revenue earned for each unit of currency spent on ads. A ROAS of 4× means every ₹1 or $1 of ad spend brought back ₹4 or $4 in revenue.
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