Ecommerce and marketing glossary

ROAS (return on ad spend) is the revenue an ad campaign brings in for every dollar spent on it: revenue from ads divided by ad spend.

CPM (cost per mille) is what an advertiser pays for 1,000 ad impressions, the standard price of reach on social and display ads.

CPC (cost per click) is the average amount paid each time someone clicks an ad: ad spend divided by clicks.

CPA (cost per acquisition) is the ad spend it takes to win one conversion, such as a purchase or signup: ad spend divided by conversions.

CTR (click-through rate) is the share of people who see an ad or link and click it: clicks divided by impressions.

CAC (customer acquisition cost) is the total sales and marketing spend it takes to win one new customer.

MER (marketing efficiency ratio) is total store revenue divided by total marketing spend, across every channel.

Retargeting is showing ads to people who already visited your store or engaged with your brand, to bring them back to buy.

UTM parameters are tags added to the end of a URL that tell your analytics which source, campaign and ad sent a visitor.

The Meta Pixel is a snippet of code on your site that reports visits and purchases back to Meta so it can measure and optimize your ads.

Marketing attribution is deciding which ads, emails and touchpoints get credit for a sale.

AOV (average order value) is the average amount a customer spends per order: revenue divided by number of orders.

Conversion rate is the share of visitors who complete a goal, usually a purchase: conversions divided by sessions.

LTV (customer lifetime value) is the total revenue or profit you expect from one customer over the whole relationship.

GMV (gross merchandise value) is the total value of goods sold through a store or marketplace before fees, returns and discounts.

Contribution margin is what's left of revenue after variable costs like product, shipping, fees and ad spend: the money that pays for fixed costs and profit.

Bounce rate is the share of visits that leave after viewing one page without interacting.

Churn rate is the share of customers or subscribers who stop buying in a given period.

NPS (net promoter score) measures loyalty by asking how likely customers are to recommend you, from 0 to 10: the share of promoters minus the share of detractors.

A SKU (stock keeping unit) is a unique code a store gives each product variant it sells, so it can track inventory and sales for that exact item.

A landing page is a page built for one campaign or audience, with one goal, usually where ad or email traffic lands.

A PDP (product detail page) is the page for one product, with its photos, price, variants, details and add-to-cart button.

A PLP (product listing page) is a page that lists many products, such as a category, collection or search results page.

A Shopify collection is a group of products shown together on one page, picked by hand or by rules such as tag, type or price.

Shopify metafields are custom fields that store extra information on products, collections or customers, such as ingredients, dimensions or care instructions.

The hero section is the first full-width block a visitor sees on a page, usually a headline, an image and the main call to action.

A CTA (call to action) is the button or line that tells a visitor the next step to take, such as "Shop now" or "Build your pillow".

A listicle is an article built as a numbered list, such as "5 reasons to switch", which DTC brands use as a pre-sell page between an ad and the product.

An advertorial is an ad written to read like an editorial article, used to warm up cold traffic before it reaches a product page.

Social proof is evidence that other people buy and like a product, such as reviews, ratings, customer counts and press mentions.

A heatmap is a picture of a page that shows where visitors click, move and how far they scroll, with hot colors for the most activity.

A/B testing is showing two versions of a page or element to split traffic and measuring which one converts better.

A value proposition is the one clear reason a customer should buy from you: what you offer, who it's for and why it beats the alternatives.

A lead magnet is something free, such as a sample, discount, quiz result or guide, offered in exchange for a visitor's contact details.

A pre-order is a purchase of a product before it's in stock or released, paid now or at shipping.

A sales funnel is the path from first hearing about a brand to buying, split into stages that each lose some people.

Top of funnel (TOFU) is the awareness stage, where people first discover a brand and aren't yet looking to buy.

Middle of funnel (MOFU) is the consideration stage, where people compare options and need reasons to trust you.

Bottom of funnel (BOFU) is the decision stage, where people are ready to buy and the offer and checkout do the work.

Upselling is offering a customer a bigger, better or more expensive version of what they're already buying.

Cross-selling is offering a customer products that go with what they're buying, such as a case with a phone.

Omnichannel is selling across your own site, retail stores, marketplaces and social as one connected experience, with shared inventory and customer data.

Dropshipping is a way to run a store without holding inventory: you sell the product, and a supplier ships it straight to the customer.

DTC (direct to consumer) is a brand selling straight to shoppers through its own site instead of through retailers or wholesalers.

A 3PL (third-party logistics provider) stores your inventory and picks, packs and ships your orders for a fee.

Print on demand is selling custom-printed products, like shirts or mugs, that a partner prints and ships only after each order comes in.

Private label is selling a product made by a manufacturer under your own brand name, often with your own packaging or formula.

A subscription model charges customers on a schedule, such as monthly, for repeat delivery of a product or ongoing access to a service.

Headless commerce separates a store's front end, the pages shoppers see, from its commerce back end, such as cart, checkout and inventory.