Ad dashboards, agency reports and job posts for e-commerce marketers are full of acronyms: CPA, ROAS, MER, CVR, PMax. Most of them are simple ratios, and once you know what each one divides by what, you can read any report and tell where the money is going. This glossary covers the terms you will meet most often when running Meta and Google ads for an online store, grouped by what they measure.
Cost metrics
CPA (Cost Per Acquisition)
Ad spend ÷ number of purchases. What it costs to get one order.
CAC (Customer Acquisition Cost)
The same idea as CPA, but per new customer, and it often includes all marketing costs (agency fees, tools, content), not only ad spend. A returning customer who buys again lowers your CPA but not your CAC.
CPM (Cost Per Mille)
Cost per 1,000 ad impressions. It tells you how expensive the audience is to reach. CPMs rise with competition, for example around Black Friday or in narrow, heavily targeted audiences.
CPC (Cost Per Click)
Ad spend ÷ clicks.
Performance metrics
CTR (Click-Through Rate)
Clicks ÷ impressions. It shows whether the ad itself is appealing to the people who see it.
CVR (Conversion Rate)
Orders ÷ site visits. It shows whether the website and the offer turn visitors into buyers.
AOV (Average Order Value)
Revenue ÷ number of orders.
ROAS (Return On Ad Spend)
Revenue attributed to ads ÷ ad spend, reported per platform. A ROAS of 3 means €3 of revenue for every €1 spent. Each platform counts the sales it believes it caused, so the ROAS figures from Meta and Google usually add up to more revenue than the store actually made.
MER (Marketing Efficiency Ratio)
Total revenue ÷ total marketing spend. A "blended" ROAS that ignores each platform's attribution claims. Because it comes from your own sales figures, it is the number to trust when platform reports disagree.
LTV (Lifetime Value)
The total revenue (or profit) one customer brings over time, including repeat orders. A high LTV lets you pay more to acquire a customer than their first order is worth.
Break-even CPA
The maximum you can pay per order without losing money, based on AOV and margin: break-even CPA = AOV × margin. With an €80 average order and a 50% margin after product cost, shipping and payment fees, you can spend up to €40 per order. The matching break-even ROAS is 1 ÷ margin, so 2.0 in this example.
Meta and Google Ads terms
LPV (Landing Page View)
A click where the page actually loaded. A big gap between clicks and landing page views usually means a slow site: people clicked, then left before the page appeared.
ATC / IC (Add To Cart / Initiate Checkout)
The funnel events before a purchase. Comparing them shows where visitors drop off: many add-to-carts but few checkouts points at shipping costs or the cart page; many checkouts but few purchases points at the checkout or payment step.
Frequency
The average number of times each person saw the ad. High frequency suggests audience saturation or creative fatigue: the same people keep seeing an ad they have already ignored.
Learning phase
The period when Meta's algorithm is still optimising an ad set. It needs roughly 50 conversions per week to exit, and significant edits to the ad set (budget, targeting, creative) reset it. Results during learning are less stable, so avoid judging or changing an ad set too early.
Prospecting vs retargeting
Prospecting shows ads to new people. Retargeting shows ads to people who have already visited the site or engaged with the brand. Retargeting almost always reports a better ROAS, partly because many of those people would have bought anyway.
Attribution
The rules that decide which ad or channel gets credit for a sale, for example 7-day click or 1-day view. A longer window or view-through credit makes the same campaign look better, so compare numbers only under the same attribution setting.
PMax (Performance Max)
Google's automated campaign type that runs across Search, Shopping, YouTube, Display, Gmail and Maps from a single campaign. It needs good product feed data and conversion tracking, and it tends to take credit for brand searches unless you exclude them.
Impression share
The percentage of available impressions your Google ads actually received. A low impression share caused by budget means you could spend more on searches you are already winning; caused by rank, it means your bids or ad quality are too low.
Brand vs non-brand
Brand searches contain your brand name; non-brand searches are generic, such as "linen summer dress". Brand campaigns look very profitable because those people were already looking for you. Report them separately, or the brand traffic will hide a weak non-brand performance.
Search terms
The actual queries people typed that triggered your ads, as opposed to the keywords you bid on. Reviewing them regularly is how you find new keywords and add negatives for irrelevant searches.
General e-commerce terms
DTC (Direct To Consumer)
A brand selling through its own online store rather than through retailers or marketplaces.
CRO (Conversion Rate Optimisation)
Improving the site so that more visitors buy: faster pages, clearer product pages, a simpler checkout, better trust signals.
CRM
Strictly, Customer Relationship Management. In e-commerce marketing it usually means email and SMS marketing and customer retention, run in tools like Klaviyo.
Flows
Automated email or SMS sequences triggered by what a customer does, such as welcome, abandoned checkout and post-purchase flows.
GA4
Google Analytics 4, Google's current analytics platform.
Pixel / tags
Tracking code on the site that reports events (purchases, add to cart, page views) back to Meta and Google. If the pixel misses purchases, the platforms optimise on incomplete data and every metric above becomes less reliable. Server-side tracking (Meta Conversions API, Google enhanced conversions) fills in much of what browsers block.
How the metrics connect
These metrics are not independent. The three that matter most for diagnosis chain together:
- CPC = CPM ÷ (1,000 × CTR)
- CPA = CPC ÷ CVR (taking each click as a site visit)
For example: a €10 CPM with a 1% CTR gives a €1 CPC. With a 2% conversion rate, that becomes a €50 CPA. If your break-even CPA is €40, you are losing money on every order.
So a high CPA always comes from one (or more) of three places:
- An expensive audience — high CPM. Look at targeting, placements and seasonality.
- A weak ad — low CTR. Test new creative, hooks and offers.
- A weak site or offer — low CVR. Look at page speed, the gap between clicks and landing page views, product pages, shipping costs and checkout.
Before changing campaigns, split a disappointing CPA into these three parts. Doubling the CTR and doubling the conversion rate have the same effect on CPA, but they need completely different fixes, and only one of them is done inside the ad account.