Ecommerce and ad glossary
The words online sellers and media buyers use every day, explained simply. Metrics come with the formula and a worked example; every term links to the ones next to it.
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A
- Abandoned cartAn abandoned cart is a shopping cart where a visitor added products but left the store without completing the purchase, a common leak in ecommerce.
- Ad creativeAn ad creative is the visual and written content of an ad, such as the image or video, headline and copy, that people actually see and react to.
- Ad libraryAn ad library is a public, searchable database of ads running on a platform, letting anyone see which ads a brand or page is currently showing.
- Ad spy toolAn ad spy tool is software that collects and organizes competitors’ ads so you can research winning creatives, offers and landing pages faster.
- AdvertorialAn advertorial is an ad written to look and read like an editorial article, used to educate cold traffic and warm it up before a product page.
- Average order value (AOV)Average order value (AOV) is the average amount a customer spends per order, found by dividing total revenue by the number of orders in a period.
B
- BackorderA backorder is an order a customer places for a product that is out of stock, which the store accepts now and ships once new inventory arrives.
- BenchmarkA benchmark is a reference point, such as a typical industry range or your own past results, used to judge whether a metric is good, average or poor.
- Bounce rateBounce rate is the share of visits where someone lands on a page and leaves without interacting further, a quick signal of a page’s first impression.
- Break-even ROASBreak-even ROAS is the return on ad spend at which ad revenue exactly covers product costs and ad spend, leaving zero profit and zero loss.
C
- Cart recoveryCart recovery is the process of winning back shoppers who abandoned their cart or checkout, using reminders like emails, texts and retargeting ads.
- Cash on delivery (COD)Cash on delivery (COD) is a payment method where the customer pays for an online order in cash or by card when the courier delivers it.
- CheckoutCheckout is the final stage of an online purchase, where a shopper enters shipping and payment details and places the order.
- Churn rateChurn rate is the percentage of customers or subscribers who stop buying or cancel during a period, a key measure of retention and repeat revenue.
- Click-through rate (CTR)Click-through rate (CTR) is the percentage of people who click an ad or link after seeing it, calculated as clicks divided by impressions times 100.
- COGS (cost of goods sold)COGS (cost of goods sold) is the direct cost of producing or buying the products you sold in a period, including materials, manufacturing and inbound freight.
- Conversion funnelA conversion funnel is the series of steps a shopper takes from first seeing your brand to buying, showing where people drop off along the way.
- Conversion rateConversion rate is the share of visitors who complete a goal, usually a purchase, shown as a percentage of all visitors or sessions in a period.
- Conversion rate optimization (CRO)Conversion rate optimization (CRO) is the practice of improving a website so a larger share of visitors buy, sign up or take another goal action.
- Cost per acquisition (CPA)Cost per acquisition (CPA) is the average ad spend needed to win one conversion, such as a purchase or sign-up, calculated as spend divided by conversions.
- Cost per click (CPC)Cost per click (CPC) is the average amount an advertiser pays each time someone clicks an ad, calculated as total ad spend divided by clicks.
- Cost per mille (CPM)CPM (cost per mille) is the price an advertiser pays for 1,000 ad impressions, calculated as ad spend divided by impressions, multiplied by 1,000.
- Cross-sellingCross-selling is offering shoppers a related product alongside the one they are buying, such as a case with a phone, to raise order value and usefulness.
- Customer journeyThe customer journey is the full path a person takes from first hearing about a brand to buying and returning, across every ad, page and message they meet.
- Customer lifetime value (CLV)Customer lifetime value (CLV) is the total revenue or profit a store expects from one customer across every order they place over the relationship.
D
- Direct-to-consumer (DTC)Direct-to-consumer (DTC) is a model where a brand sells its products straight to customers through its own store, without retailers or wholesalers.
- Discount codeA discount code is a word or string a shopper enters at checkout to get money off, free shipping or another deal, often used to track a campaign or partner.
- DropshippingDropshipping is a retail model where a store sells products it does not stock; a supplier ships each order directly to the customer after it is placed.
- Dynamic pricingDynamic pricing is the practice of changing a product’s price over time based on demand, stock levels, competitor prices or time of day, rather than fixing it.
F
- Flash saleA flash sale is a short, time-limited promotion with a strong discount, often lasting hours or a day, designed to create urgency and a quick spike in sales.
- FulfillmentFulfillment is the process of getting an online order to the customer: storing stock, picking and packing items, shipping and handling returns.
G
H
- HeatmapA heatmap is a visual overlay on a web page that shows where visitors click, move and scroll, using warm colours for busy areas and cool colours for quiet ones.
- Hook (ad hook)A hook is the opening line, image or first few seconds of an ad that stops the scroll and gives a viewer a reason to keep watching or reading.
I
L
M
- Marketplace (online marketplace)A marketplace is a website or app where many independent sellers list products for buyers, and the platform handles traffic, trust and often payments.
- Mobile commerce (m-commerce)Mobile commerce is buying and selling online through smartphones and tablets, using mobile websites, apps, social shops and mobile payment methods.
- MOQ (minimum order quantity)MOQ, or minimum order quantity, is the smallest number of units a supplier or manufacturer will accept in a single order for a product.
N
O
- OmnichannelOmnichannel is a retail approach where every sales and marketing channel is connected, so customers get one consistent experience wherever they shop.
- One-click checkoutOne-click checkout lets returning shoppers pay with a single tap or click, using saved payment and shipping details instead of filling in forms.
- Order trackingOrder tracking lets customers see where their purchase is, from order confirmation through packing and shipping to delivery, usually via a tracking number.
P
- Pixel (tracking pixel)A pixel is a small piece of code on your website that tells ad platforms like Meta or TikTok what visitors do, such as viewing products or buying.
- Pre-orderA pre-order lets customers buy a product before it is in stock or released, paying now or reserving it to be shipped once it becomes available.
- Price anchoringPrice anchoring is a pricing tactic where showing a higher reference price first makes the actual price look like better value to shoppers.
- Product page (PDP)A product page, or product detail page (PDP), is the page in an online store that shows one product’s photos, price, details and buy button.
- Product variantA product variant is a specific version of a product, such as a size, colour or material, that has its own price, stock level and SKU.
- Profit marginProfit margin is the share of revenue a business keeps as profit after costs, shown as a percentage, and it shows how much each sale really earns.
R
- ReachReach is the number of unique people who saw your ad or content at least once during a period, no matter how many times each person saw it.
- Refund rateRefund rate is the share of orders that end in a full or partial refund, a key signal of product quality, listing accuracy and true profit.
- RemarketingRemarketing is re-engaging people who already interacted with your brand, often by email or SMS, to bring them back and complete a purchase.
- RetargetingRetargeting is showing paid ads to people who already visited your site or engaged with your content, to bring warm prospects back to buy.
- Return rateReturn rate is the share of sold items customers send back, a metric that shapes true margin, inventory planning and product page quality.
- ROAS (return on ad spend)ROAS (return on ad spend) is revenue generated from ads divided by what those ads cost, showing how many dollars come back for each dollar spent.
- ROI (return on investment)ROI (return on investment) is the profit an investment makes relative to its total cost, shown as a percentage, to judge if money was well spent.
S
- Sales funnelA sales funnel is the series of steps a shopper moves through, from first seeing your brand to buying, used to find where customers drop off.
- Shipping costShipping cost is what it costs to get an order to the customer, including carrier fees, packaging and handling, and it strongly shapes margin.
- SKU (stock keeping unit)A SKU (stock keeping unit) is a unique code a store gives each sellable product variant, so it can track stock, sales and reorders accurately.
- Supply chainA supply chain is the full path a product takes from raw materials and manufacturing to your warehouse and the customer’s door.
- Swipe fileA swipe file is a saved collection of proven ads, headlines, landing pages and emails that marketers study for ideas when creating their own.
U
- UGC (user-generated content)UGC (user-generated content) is photos, videos and reviews made by real customers or creators, used in ads and stores as authentic social proof.
- UpsellingUpselling is encouraging a customer to buy a pricier version, larger size or extra item at purchase time, raising order value at little added cost.