Ecommerce Marketing Glossary: 40 Terms Every Growing Brand Should Know

Ecommerce has no shortage of acronyms.

ROAS. CAC. AOV. MER. CVR. CPM. PMax.

Then there are the terms that sound simple until three people in a meeting use them to mean three slightly different things.

This glossary is meant to fix that.

It is not a dictionary of every marketing term ever invented. It is a practical reference for founders, ecommerce managers, marketers, and operators who need to understand the language behind acquisition, conversion, measurement, merchandising, and growth.

Use it as a quick reference. Then follow the deeper links where a term deserves more than a paragraph.

1. Average Order Value (AOV)

Average Order Value is the average revenue generated by an order.

A simple formula is:

AOV = revenue ÷ number of orders

If a store generates $100,000 from 1,000 orders, its AOV is $100.

AOV matters because larger orders can create more room to support acquisition costs, assuming the extra revenue also carries healthy margin.

Shopify includes AOV in its marketing performance reporting and defines it based on order value after discounts. Shopify's marketing performance guide

Related: How to Increase Average Order Value Without Relying on Bigger Discounts

2. Attribution

Attribution is the process of assigning credit for a conversion to marketing interactions.

A customer may see a Meta ad, click a Google ad, return through email, and then purchase directly.

Different platforms may assign credit differently.

Google Ads currently supports data-driven and last-click attribution models for eligible conversion actions. Google's attribution model documentation

The important point is that attribution is a model for assigning credit. It is not a perfect record of causality.

Related: Ecommerce Attribution: Why Google Ads, Meta and Shopify Never Agree

3. Blended CAC

Blended CAC looks at total acquisition spend relative to total new customers.

For example:

Total paid acquisition spend: $100,000
New customers: 2,000

Blended CAC = $50

This gives a broader business-level view than relying only on the CAC reported by individual platforms.

4. Branded Search

Branded search refers to searches containing your company or brand name.

Someone searching “Acme running shoes” already knows Acme exists.

That makes branded traffic different from someone searching “best trail running shoes.”

Branded traffic often converts efficiently, but it should not automatically be treated as equivalent to new demand creation.

Related: Branded vs Non-Branded Google Ads: How Ecommerce Brands Should Measure Them

5. Cart Abandonment

Cart abandonment happens when a shopper adds something to their cart but leaves before completing the purchase.

Common reasons include:

• unexpected shipping costs
• comparison shopping
• unclear delivery timing
• payment friction
• distraction
• promotion-code hunting

A cart abandonment problem should be diagnosed before being “fixed.” Not every abandoned cart represents a customer who was genuinely ready to buy.

6. Clickthrough Rate (CTR)

Clickthrough Rate, or CTR, measures how often people click after seeing an ad or link.

A basic formula is:

CTR = clicks ÷ impressions × 100

Shopify includes CTR among its channel-performance metrics. Shopify's marketing performance guide

CTR can help diagnose whether advertising earns attention, but a high CTR does not guarantee profitable traffic.

7. Contribution Margin

Contribution margin is the amount left after subtracting the variable costs associated with generating an order.

Those costs might include:

• product cost
• fulfillment
• payment fees
• shipping subsidies
• commissions
• discounts

Contribution margin is especially important in paid acquisition because it helps answer:

How much money is actually available to pay for acquiring the customer?

ROAS alone cannot answer that.

8. Conversion

A conversion is an action a business wants someone to complete.

For ecommerce, the most important conversion is usually a purchase.

But advertising platforms can also track actions such as:

• add to cart
• checkout
• lead
• signup
• app install

Always know which conversion an advertising report is actually measuring.

9. Conversion Rate (CVR)

Conversion rate measures the percentage of sessions or visitors that complete a desired action.

For ecommerce, that usually means purchasing.

Shopify defines online-store conversion rate as the percentage of online-store sessions that result in an order. Shopify's marketing performance documentation

If 100 out of 5,000 sessions buy:

100 ÷ 5,000 = 2% conversion rate

Related: What Is a Good Ecommerce Conversion Rate?

10. Conversion Rate Optimization (CRO)

Conversion Rate Optimization, or CRO, is the process of improving the customer journey so more qualified visitors complete valuable actions.

Good ecommerce CRO can involve:

• product pages
• collection pages
• navigation
• mobile UX
• offers
• reviews
• site search
• cart
• checkout
• merchandising
• AOV

CRO should not be reduced to changing button colors.

Related: Ecommerce Conversion Rate Optimization: What CRO Is and Why It Matters

11. Cost Per Acquisition (CPA)

CPA measures the cost of generating a conversion or acquisition event.

The exact meaning depends on what the platform calls an acquisition.

For an ecommerce advertiser, CPA may mean cost per purchase.

That is not necessarily the same as CAC because purchases can come from returning customers.

12. Cost Per Click (CPC)

Cost Per Click is the average amount paid for a click.

The basic formula is:

CPC = advertising spend ÷ clicks

CPC can help explain traffic costs.

But cheaper clicks are not automatically better clicks.

A $2 click that converts profitably is more valuable than a $0.50 click that never purchases.

13. Cost Per Mille (CPM)

CPM means cost per thousand impressions.

It measures how much it costs to deliver 1,000 ad impressions.

CPM is commonly used when evaluating paid social and display advertising.

It tells you what attention costs, not whether the attention produced customers.

14. Customer Acquisition Cost (CAC)

Customer Acquisition Cost is the cost of acquiring a new customer.

A simple formula is:

CAC = acquisition spend ÷ new customers

CAC is one of the most useful ecommerce metrics because it connects marketing spend to actual customer growth.

Related: What Is Customer Acquisition Cost in Ecommerce?

15. Customer Lifetime Value (LTV or CLV)

Customer Lifetime Value estimates how much economic value a customer generates over their relationship with the business.

Some teams use revenue-based LTV.

Others use contribution or profit-based LTV.

That difference matters.

Lifetime value can justify spending more to acquire a customer, but only when the underlying repeat-purchase assumptions are supported by actual customer behavior.

16. Customer Journey

The customer journey is the sequence of interactions a customer has before and after purchasing.

It might include:

Meta ad → website → email signup → Google search → product page → purchase.

The journey matters because customers rarely experience marketing channels in the neat silos used in reporting dashboards.

17. Demand Capture

Demand capture means reaching people who already demonstrate meaningful intent.

Google Search and Shopping are common examples.

Someone searching for “black leather Chelsea boots” is already expressing demand for a type of product.

The advertiser's job is largely to capture that demand effectively.

18. Demand Creation

Demand creation means generating interest before someone actively searches for the product.

Paid social often plays this role.

A customer scrolling Instagram may not have planned to shop until an ad introduces a relevant product or problem.

Growing brands usually need to understand both demand creation and demand capture.

19. Frequency

Frequency measures how often the same person is shown an ad on average.

It is commonly discussed in paid social.

Higher frequency is not automatically bad, but rising frequency alongside worsening performance can be one indicator of creative fatigue or limited audience breadth.

20. Google Merchant Center

Google Merchant Center is where retailers manage product information used across Google's commerce experiences.

Product data can include:

• title
• price
• availability
• image
• identifiers
• shipping information

Merchant Center is foundational for Shopping and retail-focused Performance Max campaigns.

21. Google Shopping Ads

Google Shopping Ads are product-based Google ads that can display information such as product image, title, price, and store.

Google says Shopping ads use product information from Merchant Center rather than traditional keyword targeting to determine how products appear. Google's Shopping Ads documentation

That makes product data part of media strategy.

Related: Google Ads for Ecommerce: A Beginner's Guide

22. Gross Margin

Gross margin reflects how much revenue remains after accounting for cost of goods sold.

It is important, but it is not always the same as contribution margin.

Advertising decisions often require going further and accounting for additional variable expenses such as fulfillment, payment processing, and shipping subsidies.

23. Incrementality

Incrementality asks what happened because of the marketing activity that would not otherwise have happened.

That is different from attribution.

An advertising platform may receive credit for a purchase without proving that the purchase would not have occurred without the ad.

This distinction becomes especially important for branded traffic, remarketing, and loyal customers.

24. Landing Page

A landing page is the page someone reaches after clicking an advertisement or other marketing link.

The best landing page is not necessarily a specially designed standalone page.

It is the page that best matches the visitor's intent.

That might be:

• a product page
• a collection page
• a custom campaign page
• occasionally the homepage

Related: Ecommerce Landing Page Optimization: Turning Paid Traffic Into Revenue

25. Marketing Efficiency Ratio (MER)

MER, often called Marketing Efficiency Ratio, compares total revenue with total marketing or advertising spend.

A common simplified formula is:

MER = total revenue ÷ total ad spend

Unlike platform ROAS, MER looks at business-level revenue rather than requiring a channel to receive attribution credit.

It is useful, but it also has limitations. Returning customers and non-paid revenue can influence it.

Related: MER vs ROAS: Which Metric Should Ecommerce Brands Use?

26. Marginal CAC

Marginal CAC asks how much the additional customers generated by additional spend cost.

Suppose spend rises by $20,000 and you acquire 250 additional customers.

Marginal CAC:

$20,000 ÷ 250 = $80

Marginal CAC is especially useful when evaluating whether increased spending still makes economic sense.

27. Marginal ROAS

Marginal ROAS measures the additional conversion value generated by additional advertising spend.

Google defines it as the increase in conversion value divided by the increase in spend. Google Ads glossary

It answers a better scaling question than blended ROAS:

What did the next dollar produce?

28. New Customer Revenue

New customer revenue is the revenue generated from first-time buyers.

This is useful because total revenue can include customers who already know and purchase from the brand.

For brands focused on acquisition, separating new-customer revenue can provide a clearer view of whether marketing is actually expanding the customer base.

29. Non-Branded Search

Non-branded search refers to searches that do not contain your brand name.

Examples:

“best travel backpack”

“organic face moisturizer”

“men's trail shoes”

Non-branded search can help brands reach customers who have product intent without already knowing the company.

30. Performance Max (PMax)

Performance Max, often shortened to PMax, is Google's goal-based campaign type that can run across multiple Google advertising channels.

Google describes Performance Max as a campaign type that can access inventory including Search, YouTube, Display, Discover, Gmail, Maps, and product-focused placements while optimizing around advertiser goals. Google's Performance Max overview

For ecommerce brands, PMax can also use Merchant Center product data.

Related: Performance Max for Ecommerce: What It Is and When to Use It

31. Product Feed

A product feed is structured data describing the products a retailer sells.

It may contain:

• product titles
• descriptions
• prices
• availability
• images
• brand
• identifiers
• product categories

For Google Shopping, product-feed quality influences how well Google can understand and match products with relevant demand.

Related: Google Shopping Feed Optimization: What Actually Improves Performance

32. Prospecting

Prospecting means advertising to potential customers who have not yet purchased from or meaningfully engaged with the brand.

Paid social prospecting is intended to expand the customer base rather than simply capture existing demand.

Prospecting traffic may convert differently from remarketing or branded traffic, which is why acquisition performance should be segmented where practical.

33. Remarketing

Remarketing means advertising to people who already have some relationship with the brand.

That can include:

• website visitors
• product viewers
• cart abandoners
• email subscribers
• previous customers

Remarketing often reports strong efficiency because these audiences already possess awareness or intent.

That does not make it equivalent to new-customer acquisition.

34. Return on Ad Spend (ROAS)

ROAS measures attributed revenue relative to advertising spend.

The formula is:

ROAS = attributed revenue ÷ ad spend

Google defines ROAS as total conversion value divided by total spend. Google Ads glossary

A 4x ROAS means the platform attributed $4 in conversion value for every $1 spent.

ROAS is useful.

It is not a profitability metric.

Related: What Is ROAS in Ecommerce? How to Calculate It and What It Really Tells You

35. Return on Investment (ROI)

ROI looks at return relative to investment, usually using profit rather than revenue.

That is why ROI and ROAS should not be used interchangeably.

Google explicitly distinguishes the two: ROAS is based on conversion value relative to spend, while ROI is based on profit relative to spend. Google Ads glossary

36. Revenue Per Visitor (RPV)

Revenue Per Visitor measures how much revenue the average visitor or session generates.

A simplified formula is:

RPV = revenue ÷ visitors

It is useful in CRO because it combines conversion behavior and order value.

A change that lowers conversion rate slightly but significantly raises AOV could still improve revenue per visitor.

37. Search Intent

Search intent describes what someone is trying to accomplish when they search.

Examples include:

• learning
• comparing
• finding a specific brand
• buying a product

Understanding intent matters because not all searches have the same commercial value.

“what are trail shoes?” and “buy men's waterproof trail shoes size 10” represent very different levels of purchase intent.

38. Smart Bidding

Smart Bidding is Google's automated bidding technology that uses machine learning to optimize toward conversion or conversion-value goals.

Google currently includes strategies such as Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value within its automated bidding ecosystem. Google Ads glossary

Automation can optimize bidding.

It does not decide what your customer is worth.

39. Target ROAS (tROAS)

Target ROAS is a bidding target used to tell Google the average return on ad spend you want the system to pursue.

For example:

A 400% target ROAS means roughly $4 of conversion value for every $1 of advertising spend.

A higher target can make bidding more selective, so setting an aggressive number can restrict volume.

40. Unit Economics

Unit economics describes the revenue and costs associated with selling to a customer or fulfilling an order.

For ecommerce, that can include:

• selling price
• product cost
• shipping
• fulfillment
• payment fees
• discounts
• CAC
• repeat contribution

Unit economics are what turn marketing metrics into business decisions.

A 5x ROAS sounds impressive.

Whether it is actually good depends on the economics underneath it.

Which ecommerce metrics should you actually pay attention to?

Knowing the terminology is useful.

Tracking every metric is not.

For most growing ecommerce brands, a much smaller set deserves regular attention:

• revenue
• conversion rate
• AOV
• CAC
• ROAS
• MER
• contribution margin
• new-customer revenue
• repeat purchase behavior
• revenue per visitor

Those metrics connect marketing activity to the health of the ecommerce business.

The next article in this series covers them in more detail:

The 10 Ecommerce Metrics That Actually Matter for Growth

The point of the glossary is better decisions, not more jargon

Marketing language becomes a problem when the terminology starts replacing the business question.

ROAS is not the goal.

CAC is not the goal.

Conversion rate is not the goal.

Even revenue is incomplete without understanding the economics underneath it.

The useful question is always some variation of:

What is happening in the business, why is it happening, and what should we do next?

The metrics and terminology help answer that question.

They should never become a substitute for it.

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