Glossary
E-commerce and advertising terms, explained
The metrics, ad terms and store words you meet when you research products and run ads, each with what it means and how to use it.
All terms
A
- A/B testing Advertising
- Comparing two versions of an ad, page or email by showing each to a similar group and seeing which performs better. Change one thing at a time to learn what made the difference.
- Abandoned cart Retention
- A shopping cart that a visitor fills but leaves without buying. Stores try to win these sales back with reminder emails, texts and ads.
- Ad creative Advertising
- The content of an ad that people see and hear: the image or video, the copy, the headline and the call to action.
- Ad fatigue Advertising
- The drop in an ad's results that happens when the same people see it too often. Clicks fall, costs rise and the ad needs replacing.
- Ad library Advertising
- A searchable database of ads that shows what advertisers are running. Meta's Ad Library is public and covers ads on Facebook and Instagram.
- Ad reach Advertising
- The number of different people who saw an ad at least once. Unlike impressions, each person is counted only once.
- AOV (average order value) Metrics
- The average amount a customer spends per order. It is your revenue divided by the number of orders.
B
- Break-even ROAS Metrics
- The ROAS at which ad spend uses up the whole margin on a sale, so you neither make nor lose money. Below it, every sale from ads costs you money.
C
- CAC (customer acquisition cost) Metrics
- What it costs, on average, to win one new customer. It is your total acquisition spend divided by the number of new customers in the same period.
- COGS (cost of goods sold) Metrics
- The direct cost of the products you sold: what you paid to make or buy them and get them ready to sell. It leaves out overheads such as apps, rent or salaries.
- Contribution margin Metrics
- What a sale leaves after the costs that come with it: product, shipping, payment fees and often advertising. It is the money that pays your fixed costs and then becomes profit.
- Conversion funnel Store
- The steps a shopper goes through from first seeing your brand to buying. At each step some people drop out, so the group narrows like a funnel.
- Conversion rate Metrics
- The share of visits that end in a purchase or another goal. It shows how well your store turns traffic into sales.
- CPA (cost per acquisition) Metrics
- What you pay in advertising, on average, for one conversion, usually a purchase. It is ad spend divided by the number of conversions.
- CPC (cost per click) Metrics
- What you pay, on average, for one click on your ad. It is ad spend divided by the number of clicks.
- CPM (cost per mille) Metrics
- The price of showing an ad 1,000 times. It tells you how expensive it is to reach an audience, before anyone clicks.
- Cross-selling Store
- Offering products that go with the one a customer is buying, such as a case with a phone or a refill with a bottle.
- CTR (click-through rate) Metrics
- The share of people who click an ad after seeing it. It is clicks divided by impressions, shown as a percent.
- Customer lifetime value (CLV) Metrics
- The total value a customer brings your store over the whole time they keep buying. It is often measured as gross profit rather than revenue.
D
- Discount code Store
- A code shoppers enter at checkout to get a reduction, such as a percentage off, a fixed amount off or free shipping.
- Dropshipping Products
- A retail model where the store doesn't keep products in stock. When a customer orders, a supplier ships the item directly to them.
- DTC (direct to consumer) Products
- A business model where a brand sells straight to its customers through its own store and channels, rather than through retailers or wholesalers.
E
- Email flow Retention
- A series of emails sent automatically when a subscriber or customer does something, such as signing up, abandoning a cart or placing an order.
G
- Gross margin Metrics
- The share of revenue left after paying for the products you sold. It is revenue minus COGS, divided by revenue.
H
- Hook Advertising
- The opening of an ad, usually its first few seconds or first line, designed to stop people scrolling and make them watch or read on.
L
- Landing page Store
- The page people arrive on after clicking an ad or a link. For a store it is often a product page, a collection or a page built for one campaign.
- Lookalike audience Advertising
- An ad audience the platform builds from people who resemble a source list you provide, such as your customers. It helps you find new buyers who share their traits.
M
- MER (marketing efficiency ratio) Metrics
- Your store's total revenue divided by your total marketing spend over the same period. It gives one view of how efficient your marketing is across every channel.
N
- Net profit margin Metrics
- The share of revenue left as profit after every cost, including ads, fixed costs and taxes. It is net profit divided by revenue.
- Niche Products
- A specific segment of a larger market, defined by a shared need, interest or type of customer. Selling to a niche means serving fewer people, better.
P
- Print on demand Products
- A model where products such as T-shirts, mugs or posters are printed with your design only after a customer orders them. The print partner makes and ships each item.
- Private label Products
- Products made by a manufacturer and sold under your own brand name. You control the branding and often the specifications, while the factory handles production.
R
- Retargeting Advertising
- Showing ads to people who have already interacted with your brand, such as visitors who viewed a product or left items in their cart.
- ROAS (return on ad spend) Metrics
- The revenue your ads bring in for each euro you spend on them. A ROAS of 3 means 3 euros of sales for every euro of ad spend.
S
- Shopify app Store
- An add-on that extends what a Shopify store can do, such as reviews, email marketing, upsells or subscriptions. Most are installed from the Shopify App Store.
- Shopify theme Store
- The template that sets how a Shopify store looks and how its pages are laid out. You can customize a theme in the theme editor or by editing its code.
U
- UGC (user-generated content) Advertising
- Content made by customers or creators rather than by the brand, such as reviews, unboxings and testimonials. In ads, it usually means videos filmed in that personal style.
- Upselling Store
- Encouraging a customer to buy a more expensive version, a larger size or an upgraded package of the product they are already considering.
W
- Welcome series Retention
- The automated emails a new subscriber receives after signing up. It introduces the brand, delivers any sign-up offer and nudges toward a first purchase.
- Winning product Products
- A product that sells well and profitably, usually through paid ads, with demand that can grow as you scale. The term is common among dropshippers and new Shopify brands.
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