Marketing glossary.

Plain definitions for the numbers and terms that come up when a startup runs paid ads, SEO, email and a store. Each one links to a calculator or guide where there's more to it.

Paid ads · Profit and growth · Site and conversion · Email and retention · SEO and AI search

Paid ads terms

ROAS (return on ad spend)

Revenue from ads divided by ad spend. $30,000 in ad revenue on $10,000 in spend is a 3.0x ROAS. It comes from each platform's own attribution, so it tends to overstate results. More.

Break-even ROAS

The ROAS at which ads exactly pay for themselves: 1 divided by contribution margin. A 50% margin breaks even at 2.0x. More.

CPA (cost per acquisition)

Ad spend divided by conversions, such as purchases or sign-ups. It's usually media-only and can include repeat buyers. More.

CPM (cost per thousand impressions)

What it costs to show an ad 1,000 times. Rising CPMs mean the same budget reaches fewer people.

CPC (cost per click)

Ad spend divided by clicks. Useful for search ads; less useful on its own for social ads, where conversion matters more.

CTR (click-through rate)

Clicks divided by impressions. A higher CTR usually means the ad's message and audience are a good match.

Learning phase

The period after launch or a big edit when Meta's delivery system is still finding who converts. An ad set typically needs about 50 optimization events in a week to exit it. More.

Conversions API

Meta's server-side way of sending purchase and lead events, alongside the browser Pixel. It fills tracking gaps left by browser privacy settings and ad blockers.

UGC (user-generated content)

Ads made in the style of real customer videos and reviews, often filmed by paid creators. They tend to look native in social feeds.

Profit and growth terms

MER (marketing efficiency ratio)

Total revenue divided by total marketing spend, across every channel. Also called blended ROAS. It can't be double-counted, so it's the best check on whether marketing as a whole is profitable. More.

CAC (customer acquisition cost)

Total marketing spend divided by new customers in the same period. Fully loaded CAC includes fees, creative and tools as well as ad spend. More.

CAC payback period

How many months of gross profit it takes to earn back CAC. Under 12 months is healthy for most consumer brands. More.

LTV (customer lifetime value)

What a customer is worth over their whole relationship with a brand: average order value × orders per year × years × gross margin. More.

LTV:CAC ratio

LTV divided by CAC. 3:1 is the common target; below 1:1, each customer loses money. More.

Contribution margin

What's left of a sale after product cost, shipping, payment fees and discounts, before marketing. It sets how much a brand can afford to spend on ads. More.

Break-even CPA

The most a brand can pay in ads to win one order without losing money on it. It equals contribution per order. More.

AOV (average order value)

Revenue divided by number of orders. Raising AOV makes every visitor and every ad dollar worth more.

Gross margin

Revenue minus the cost of the product and getting it to the customer, as a share of revenue.

Site and conversion terms

CVR (conversion rate)

The share of visitors who buy. 2% means 2 orders for every 100 visits.

Revenue per visitor

Revenue divided by visitors. One number that combines conversion rate and average order value.

A/B test

Showing two versions of a page or offer to split traffic and keeping the one that sells more. It needs enough traffic to reach a clear result.

Core Web Vitals

Google's page experience metrics: loading speed (LCP), responsiveness (INP) and visual stability (CLS). Slow pages lose both rankings and sales.

Email and retention terms

Flow

An automated email or text sequence triggered by what a customer does, like signing up, abandoning a checkout or making a first order. More.

Repeat rate

The share of customers who buy more than once. It's the main lever on LTV. More.

Win-back

A flow that targets customers who haven't ordered in a set period, to bring them back before they're gone. More.

Churn

The share of customers or subscribers who stop buying in a period. The opposite of retention.

SEO and AI search terms

SEO (search engine optimization)

Making pages easy to find, crawl and trust so they rank in Google for the searches buyers make. More.

AEO (answer engine optimization)

Writing and structuring content so AI tools and search features quote it as the answer. Also called GEO or AI SEO. More.

GEO (generative engine optimization)

Getting a brand named and cited in answers from generative AI tools like ChatGPT, Perplexity and Gemini. More.

AI Overviews

Google's AI-generated summaries shown above the regular search results, built from pages in Google's index. More.

Structured data

Code on a page, usually schema.org markup in JSON-LD, that tells search engines and AI tools exactly what the page describes: a product, a price, a business, an FAQ.

Organic revenue

Sales from visitors who arrived through unpaid search results rather than ads. More.