Marketing terms, in plain language

Every term with the formula, a worked example in rupees, and the nuance most definitions leave out. Written so a business owner can use them, not just recognise them.

Paid Advertising

ROAS

ROAS = Revenue / Ad Spend

Return on ad spend: the revenue generated for every rupee spent on advertising, expressed as a multiple.

Full definition

CAC

CAC = Total Acquisition Spend / New Customers Acquired

Customer acquisition cost, the total sales and marketing spend required to win one new customer.

Full definition

CTR

CTR = (Clicks / Impressions) x 100

Click-through rate, the percentage of people who clicked after seeing your ad or search listing.

Full definition

CPC

CPC = Total Spend / Total Clicks

Cost per click. The amount you pay each time someone clicks your ad.

Full definition

CPL

CPL = Ad Spend / Leads Generated

Cost per lead. The advertising spend required to generate one enquiry.

Full definition

Performance Max

A Google Ads campaign type that serves across Search, Shopping, Display, YouTube, Discover, Gmail and Maps from a single set of assets, with placement decisions automated.

Full definition

CPM

CPM = (Ad Spend / Impressions) x 1000

Cost per mille, the amount you pay for one thousand ad impressions.

Full definition

CPA

CPA = Ad Spend / Conversions

Cost per acquisition, the advertising spend required to produce one conversion.

Full definition

Quality Score

Components: expected CTR, ad relevance, landing page experience

A Google Ads diagnostic scored from 1 to 10 that estimates how relevant your keyword, ad and landing page are to a searcher.

Full definition

Conversion Rate

Conversion Rate = (Conversions / Sessions) x 100

The percentage of visitors who complete the action you are measuring, whether that is a purchase, a form submission or a call.

Full definition

Learning Phase

Meta exits learning at roughly 50 optimisation events per ad set per week

The period after a campaign launch or significant edit during which the ad platform gathers conversion data before delivery stabilises.

Full definition

Attribution Window

Common settings: 7-day click, 1-day view

The period after seeing or clicking an ad within which a platform will claim credit for a resulting conversion.

Full definition

Conversions API

A server-to-server connection that sends conversion events directly from your systems to an ad platform, rather than relying on the visitor's browser.

Full definition

Negative Keywords

Terms you exclude from a Google Ads campaign so your ads never appear against them.

Full definition

Creative Fatigue

Watch: frequency rising, CTR falling, CPM stable or rising

The decline in ad performance that occurs as your audience sees the same creative repeatedly.

Full definition

MER

MER = Total Revenue / Total Ad Spend

Marketing efficiency ratio, total revenue divided by total advertising spend across every channel.

Full definition

SEO & Discovery

Google Business Profile

The free business listing that powers your presence in Google Maps and the local pack of search results.

Full definition

AEO

Answer engine optimisation, optimising your content to be the source cited inside AI-generated answers rather than merely ranked in a list of links.

Full definition

Search Intent

Four types: informational, navigational, commercial, transactional

What a person is actually trying to accomplish when they type a query, as distinct from the words they used.

Full definition

E-E-A-T

Experience + Expertise + Authoritativeness + Trust

Experience, Expertise, Authoritativeness and Trust, the framework Google's quality raters use to assess content quality.

Full definition

Topical Authority

The depth and completeness of a site's coverage of a subject, which influences how readily it ranks for related queries.

Full definition

AI Overviews

Google's AI-generated answers that appear above traditional results, synthesising information from multiple sources with citations.

Full definition

Zero-click Search

A search that ends without the user clicking through to any website, because the answer appeared in the results.

Full definition

Local Pack

Ranking factors: relevance, distance, prominence

The block of three business listings with a map that appears above organic results for searches with local intent.

Full definition

Keyword Cannibalisation

Two or more pages on the same site competing for the same query, so search engines must choose between them.

Full definition

Canonical Tag

An HTML tag declaring which URL is the authoritative version of a page when the same content is reachable at several addresses.

Full definition

Internal Linking

Links between pages on your own site, which distribute authority and tell search engines how your content relates.

Full definition

eCommerce & Unit Economics

AOV

AOV = Total Revenue / Number of Orders

Average order value, the average amount a customer spends in a single transaction.

Full definition

ACOS

ACOS = (Ad Spend / Ad Revenue) x 100

Advertising cost of sale, the percentage of advertising-attributed revenue consumed by the advertising itself. The inverse of ROAS, used mainly on Amazon.

Full definition

LTV

LTV = AOV x Purchase Frequency x Gross Margin x Customer Lifespan

Lifetime value, the total contribution margin a customer generates across the whole of their relationship with your business.

Full definition

RTO

RTO Rate = (Returned Orders / Total Orders) x 100

Return to origin. An order that fails delivery and comes back to the seller, most commonly on cash-on-delivery shipments in India.

Full definition

Contribution Margin

Contribution Margin = Selling Price - (COGS + Shipping + Packaging + Gateway Fees + Returns Provision)

What remains from a sale after every variable cost of fulfilling it, available to cover fixed costs and profit.

Full definition

Break-even ROAS

Break-even ROAS = 1 / Contribution Margin (as a decimal)

The return on ad spend at which a campaign covers its costs exactly, producing neither profit nor loss on the marginal sale.

Full definition

Cash on Delivery

A payment method where the customer pays when the parcel arrives rather than at checkout.

Full definition

Prepaid Ratio

Prepaid Ratio = (Prepaid Orders / Total Orders) x 100

The share of orders paid for at checkout rather than on delivery.

Full definition

Cohort Analysis

Grouping customers by when they first bought, then tracking how each group behaves over time.

Full definition

Cart Abandonment

Abandonment Rate = (1 - (Purchases / Carts Created)) x 100

The share of shoppers who add items to a cart and leave without completing the purchase.

Full definition

Google Merchant Center

The platform where you submit product data to Google so it can appear in Shopping ads and free product listings.

Full definition

Product Feed

A structured file of your product data that shopping platforms use to match products to searches and display them.

Full definition

Technical

Core Web Vitals

LCP under 2.5s · INP under 200ms · CLS under 0.1

A set of Google page-experience metrics measuring how quickly a page loads, how fast it responds to input, and how much the layout shifts while loading.

Full definition