Knowledge / Glossary
The concepts.
Explained.
Definitions, formulas and examples of the concepts we use in marketing. Find the term you need and see how it works in practice.
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Follow the sale through to contribution.
Same revenue. A different contribution margin changes what you can afford to spend.
01Sales value does not tell you how much is left.
a cohort analysis? How to read one
A cohort analysis divides customers into groups (cohorts) by a shared starting point — typically their first purchase month — and follows each group's behavior over time, e.g. retention, repeat purchases and accumulated CLTV.
Read articlea data layer
A data layer is a structured JavaScript object on a website where important data (product, price, order, customer) is placed consistently, so tags and tracking tools can read it reliably.
Read articlea post-purchase flow
A post-purchase flow is an automated sequence triggered after a purchase, with an order confirmation, product onboarding and a nudge toward the next order.
Read articlea replenishment flow
A replenishment flow triggers based on when a customer is expected to be running low on a consumable product, reminding them to reorder in time.
Read articlea sign-up popup
A sign-up popup is an overlay on the website that asks visitors to subscribe to email or SMS, often in exchange for an incentive like a discount or access.
Read articlea sunset flow
A sunset flow gradually steps profiles that haven't engaged over a longer period down and eventually out of active sending, to protect your sender reputation.
Read articlea welcome flow
A welcome flow is an automated email/SMS sequence triggered when someone joins your list: typically a welcome, brand story and a nudge toward the first purchase.
Read articlea winback flow
A winback flow triggers when a former customer has been inactive for a while, and tries to get them buying again before they're considered lost.
Read articleAd Rank
Ad Rank is Google’s set of auction values determining eligibility and placement. It considers bid, ad quality, thresholds, competition, context and expected asset impact.
Read articleAdvantage+ Shopping (ASC)
Advantage+ Shopping Campaigns (ASC) is a heavily automated Meta campaign type for e-commerce, where the algorithm itself controls audience, placement and creative mix toward a single conversion goal.
Read articlean abandoned checkout flow
An abandoned checkout flow is triggered when a customer starts the purchase but doesn't complete it, reminding them to finish the order via email or SMS.
Read articlean attribution window
An attribution window is the time period after a click or view within which a subsequent conversion is credited to the ad. Meta's default is 7-day click and 1-day view.
Read articleAOV
AOV (Average Order Value) is your total revenue divided by the number of orders in a given period. It's what an average customer puts in the cart per purchase.
Read articleattribution
Attribution is the method that distributes the credit for a conversion across the touchpoints the customer encountered along the way. The model decides which channel gets the credit, and therefore where budget flows.
Read articleblended ROAS
Blended ROAS is your total revenue divided by your total ad spend across every channel. Unlike platform ROAS, it isn't built on attribution and therefore can't be double-counted.
Read articlebreak-even ROAS
Break-even ROAS is the ROAS at which contribution margin exactly covers the ad cost — neither loss nor gain. It's calculated as 1 divided by your margin.
Read articlebrowse abandonment
A browse abandonment flow triggers when a customer views a product or category without adding anything to the cart, and follows up with a relevant reminder.
Read articleCAC
CAC (Customer Acquisition Cost) is the sales and marketing cost included in the calculation divided by new customers in the same period. Specify the scope, such as ad spend only or fully loaded acquisition cost.
Read articleCBO vs. ABO in Meta: what's the difference
ABO (Ad Set Budget Optimization) means budget is set manually per ad set. CBO (Campaign Budget Optimization / Advantage+ campaign budget) means a single budget is set at campaign level, and Meta distributes it automatically toward the best-performing ad sets.
Read articlechurn rate
Churn rate is the share of customers or subscribers who leave you in a given period. A 32% churn means just under a third of customers aren't back next period.
Read articleCLTV
CLTV (Customer Lifetime Value) is the total gross profit an average customer contributes across their entire lifetime as a customer, from first purchase to last.
Read articleConsent Mode v2
Consent Mode adapts Google tag behaviour to consent. It does not collect consent or guarantee lawful processing by itself.
Read articlecontribution margin
Contribution margin is revenue minus the variable costs (cost of goods, shipping, fees, returns). It's the amount each order contributes toward covering fixed costs and creating profit.
Read articleconversion rate (CVR)
Conversion rate (CVR) is the number of conversions divided by the number of visitors, expressed as a percentage. If 2 out of 100 visitors buy, CVR is 2%.
Read articlecookieless tracking
“Cookieless” describes a digital landscape where third-party cookies are gone and first-party cookies are restricted, forcing measurement and targeting onto new methods.
Read articleCPC
CPC (Cost Per Click) is ad spend divided by the number of clicks. Pay €55 for 100 clicks and your CPC is €0.55.
Read articleCPM
CPM (Cost Per Mille) is the price for 1,000 ad impressions. Spend €6 to reach 1,000 people and your CPM is €6.
Read articleCTR
CTR (Click-Through Rate) is the number of clicks divided by the number of impressions, expressed as a percentage. If an ad gets 30 clicks from 1,000 impressions, CTR is 3%.
Read articlededuplication
Deduplication is the process that prevents the same conversion from being counted multiple times when it's sent from both the browser (pixel) and the server (CAPI), typically by both sources sharing the same event_id.
Read articledeliverability
Deliverability is the share of your sent emails that actually land in the recipient's inbox rather than in spam or getting rejected entirely.
Read articledouble opt-in
Double opt-in is a sign-up method where a new contact must confirm their subscription via a link in an email before they're added to your active list.
Read articleEvent Match Quality (EMQ)
Event Match Quality (EMQ) is a score from 0 to 10 that measures how well Meta can match a conversion event to a user, based on the customer parameters you send (hashed email, phone, name, external ID and more).
Read articlefirst-party data
First-party data is data you collect directly from your own customers and channels (purchases, website behavior, email engagement, contact details) and which you own and control.
Read articleGA4? Google Analytics 4 explained
GA4 (Google Analytics 4) is Google's analytics platform where all measurement is built around events rather than page views, and where web and app can be measured in a single property.
Read articleGoogle Merchant Center
Google Merchant Center is the platform where you upload and manage your product feed, so products can appear in Shopping ads, Performance Max and free product listings.
Read articlegross margin
Gross margin is gross profit as a percentage of revenue — that is, revenue minus cost of goods, divided by revenue. Sell for €100 with €40 in cost of goods, and gross margin is 60%.
Read articlehold rate
Hold rate is the share of viewers who keep watching the ad after the first few seconds, typically measured as the share who reach ThruPlay or watch a meaningful portion of the video.
Read articlehook rate
Hook rate is the share of ad impressions that turn into 3-second video views, that is, how many people stop in the first few seconds instead of scrolling past.
Read articleimpression share
Impression share is the number of impressions your ads received, divided by the estimated number of impressions they were eligible to get.
Read articleincrementality
Incrementality is the added effect a marketing effort creates: the sales that happened only because the ad ran. Sales you'd have gotten anyway aren't incremental, whatever the platform credits.
Read articleiOS 14 / ATT
App Tracking Transparency (ATT), introduced with iOS 14.5, requires apps to ask permission before tracking users across other apps and websites. Most users opt out, which reduced the data platforms like Meta receive.
Read articlelist growth
List growth is the rate at which your email and SMS list grows with new, consented contacts, net of unsubscribes and removals.
Read articleMarketing Mix Modeling (MMM)? Explained
Marketing Mix Modeling (MMM) is a statistical method that estimates how much each marketing channel (and factors like seasonality and price) contributes to total sales, based on aggregated, historical data instead of individual tracking and attribution.
Read articleMaximize Conversion Value
Maximize Conversion Value is a smart bidding strategy that spends the entire budget to achieve the highest possible total conversion value, optionally with a tROAS target.
Read articleMER
MER (Marketing Efficiency Ratio) is your total revenue divided by your total marketing spend across every channel. It ignores the platforms' own attribution and shows how efficiently the whole marketing machine is working.
Read articlenCAC
nCAC (new Customer Acquisition Cost) is marketing spend divided by the number of first-time buyers. Unlike ordinary CAC, it counts only new customers — not repeat purchases from existing ones.
Read articlenet margin
Net margin is net profit as a percentage of revenue — that is, what's left once both variable and fixed costs, tax and interest are subtracted.
Read articlepayback period
Payback period (CAC payback) is the time it takes before the profit a new customer generates has covered what it cost to acquire them. The shorter the payback, the faster capital can be reinvested in growth.
Read articlePerformance Max (PMax) in Google Ads
Performance Max (PMax) is a Google campaign type that runs across all of Google's inventory (Search, Shopping, YouTube, Display, Gmail and Maps), steered by one algorithm toward a single conversion goal.
Read articlePMax cannibalization
PMax cannibalization is when Performance Max spends budget on, and credits itself for, conversions that would have happened regardless (typically brand searches and bestsellers), so its reported performance is artificially inflated.
Read articlePOAS
POAS (Profit on Ad Spend) is gross profit before advertising divided by ad spend. Here, gross profit means revenue minus product costs and other variable costs.
Read articleProfitmetrics
Profitmetrics is a tool that calculates the real profit (contribution margin) per order and sends it back to the ad platforms as the conversion value, so bidding can optimize for profit rather than revenue.
Read articleprospecting
Prospecting is top-of-funnel advertising aimed at new, cold audiences that have had no prior contact with the brand. The purpose is to build awareness and win entirely new customers.
Read articlepurchase frequency
Purchase frequency is the average number of purchases per customer in a given period. If a customer buys 2.4 times a year on average, the annual purchase frequency is 2.4.
Read articleQuality Score
Quality Score is Google’s diagnostic 1–10 rating at keyword level. It reflects expected click-through rate, ad relevance and landing page experience. The score is not a direct auction input.
Read articlerefund and return rate
Refund and return rate is the share of orders (or revenue) that end up returned or refunded in a given period.
Read articlerepeat purchase rate
Repeat purchase rate is the share of customers who have made more than one purchase. If 35% of customers have come back, the repeat purchase rate is 35%.
Read articleretargeting
Retargeting (remarketing) is advertising aimed at people who've already interacted with you: visited the site, viewed a product, or added to cart without buying.
Read articleretention rate
Retention rate is the share of customers who are still active from one period to the next. A 68% retention means a good two-thirds of customers buy again.
Read articleRFM segmentation
RFM segmentation scores each customer on three dimensions: Recency (how recently they bought), Frequency (how often) and Monetary (how much for). The scores divide the base into segments like VIPs, loyal, dormant and lost.
Read articleROAS? Formula, calculation and a good ROAS
ROAS (Return on Ad Spend) is the revenue generated by ads divided by ad spend. A ROAS of 4 means €4 in revenue for every ad euro, but says nothing about what you actually keep.
Read articleROI
ROI (Return on Investment) is the net return on an investment divided by the investment's cost: (return − cost) / cost, expressed as a percentage.
Read articleserver-side GTM
Server-side GTM (sGTM) is a Google Tag Manager container that runs on your own server instead of in the user's browser, so data is processed and sent to the platforms server-side rather than client-side.
Read articleserver-side tracking
Server-side tracking sends conversion events from your own server (e.g. via a server-side Google Tag Manager container and Meta's Conversions API) instead of from the user's browser, so data isn't lost to ad blockers, cookie restrictions and iOS limitations.
Read articleSMS marketing
SMS marketing is marketing via text messages to customers who've given consent, typically used for time-sensitive messages like launches, offers and flow-triggered reminders.
Read articleStandard Shopping
Standard Shopping is a Google campaign type that shows product ads (image, price, store) based on your product feed, with more manual control than Performance Max.
Read articlethe learning phase
The learning phase is the period where Meta's delivery system is still gathering data to figure out who converts on a new or significantly edited ad set. It's typically exited after roughly 50 optimisation events per week.
Read articlethe Meta pixel
The Meta pixel is a piece of JavaScript placed on your website that records visitor actions (page views, add-to-carts, purchases), so Meta can measure conversions and optimise ads.
Read articletROAS
tROAS (target ROAS) is a smart bidding strategy in Google Ads that automatically adjusts bids to hit a set target for return on ad spend.
Read articleUGC? Meaning and why it works
UGC (User Generated Content) is ad content in a raw, authentic format that looks like it was created by an ordinary user or customer, rather than a polished, produced spot.
Read articleWhat are Advantage+ catalog ads (DPA)
Advantage+ catalog ads (formerly Dynamic Product Ads, DPA) are ads that automatically pull products from your catalog and show each user the items most relevant to them, for example products they've viewed or added to cart.
Read articleWhat are brand vs generic searches
Brand searches are searches that contain your name (people who already know you). Generic (non-brand) searches are category and product searches from people who haven't yet chosen you.
Read articleWhat are custom audiences
A custom audience is an audience you build from your own data: customer lists, website visitors (via pixel/CAPI), app activity, video viewers or engagement on Meta.
Read articleWhat are custom labels
Custom labels (custom_label_0 through 4) are optional fields in the product feed where you can tag products with your own criteria, for example margin, bestseller status, season or stock level.
Read articleWhat are enhanced conversions
Enhanced conversions is a Google Ads feature that supplements conversion data with hashed first-party information (like email), so Google can better match conversions to the clicks that created them.
Read articleWhat are lookalike audiences
A lookalike audience is an audience Meta builds by finding new users who statistically resemble a seed audience you provide, for example your buyers or your most valuable customers.
Read articleWhat are match types
Match types determine how closely a user's search must match your keyword before your ad shows: broad match (widest), phrase match (medium) and exact match (narrowest).
Read articleWhat are negative keywords
Negative keywords are search terms you exclude from your campaigns, so your ads don't show on searches that contain them.
Read articleWhat are search term insights
Search term insights (search terms) are the report of the actual search queries users typed when your ads showed, as opposed to the keywords you chose to bid on.
Read articleWhat are SPF, DKIM and DMARC
SPF, DKIM and DMARC are email authentication standards that let the recipient's mail server verify that an email really was sent from the domain it claims, and therefore isn't spoofed.
Read articleWhat are UTM parameters
UTM parameters are small tags you add to the end of a link (source, medium, campaign and more), so analytics tools can record which source, channel and campaign a visitor came from.
Read articleWhat's the difference between flows and campaigns
A campaign is a single email or SMS sent to a segment at a set time. A flow is an automated sequence triggered by a customer's behavior (like a sign-up or a purchase) that runs on its own.
Read articlezero-party data
Zero-party data is data the customer proactively and voluntarily shares with you (like preferences, size, goals or birthday), typically via quizzes, profile questions or preference centers.
Read articleYour next step
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