E-commerce marketing glossary

Plain-language definitions of the advertising, search, and conversion terms e-commerce teams use every day — with formulas, examples, and why each one matters.

A

A/B testing — Split testing: A/B testing compares two versions of a page, ad, or email by showing each to a random share of visitors and measuring which performs better.
ABO — Ad set budget optimization: ABO (ad set budget optimization) sets a separate budget on each ad set instead of one shared campaign budget.
Ad set — Ad group: An ad set is the level of a Meta campaign that holds targeting, placements, schedule, and (with ABO) budget; Google calls the equivalent an ad group.
Advantage+ Shopping Campaigns — ASC: Advantage+ Shopping Campaigns (ASC) are Meta campaigns that automate targeting, placements, and budget for e-commerce sales.
AEO — Answer engine optimization: AEO (answer engine optimization) is structuring content so search features and assistants can lift a direct answer from it — featured snippets, People Also Ask, voice answers.
AOV — Average order value: AOV (average order value) is the average amount a customer spends per order.
Attribution — Marketing attribution: Attribution is how credit for a conversion is assigned to the ads and channels a customer interacted with before buying.
Attribution window: An attribution window is the time after a click or view during which a conversion can be credited to an ad.

C

CAC — Customer acquisition cost: CAC (customer acquisition cost) is the total cost of acquiring one new customer, including ad spend and other marketing costs.
Cart abandonment — Cart abandonment rate: Cart abandonment is when a shopper adds items to their cart but leaves without completing the purchase.
CBO — Campaign budget optimization: CBO (campaign budget optimization, now called Advantage campaign budget on Meta) sets one budget at the campaign level and lets the platform distribute it across ad sets.
Checkout friction: Checkout friction is anything in the checkout that adds effort, doubt, or surprise — extra form fields, late shipping costs, missing payment methods.
Conversion rate — CVR: Conversion rate (CVR) is the percentage of visitors or sessions that complete a goal, usually a purchase.
Conversions API — Server-side tracking: The Conversions API (CAPI) sends conversion events from your server or store platform directly to the ad platform, instead of relying only on the browser pixel.
CPA — Cost per acquisition: CPA (cost per acquisition) is the average ad spend needed to generate one conversion, usually a purchase.
CPC — Cost per click: CPC (cost per click) is the average amount paid for each click on an ad.
CPM — Cost per mille: CPM (cost per mille) is the cost of 1,000 ad impressions.
Creative fatigue — Ad fatigue: Creative fatigue is the decline in an ad's performance as the same audience sees it repeatedly.
Creative testing: Creative testing is the structured process of comparing ad creatives — hooks, formats, messages, visuals — to learn which drive results.
CRO — Conversion rate optimization: CRO (conversion rate optimization) is the practice of increasing the share of visitors who buy by removing friction and testing improvements to the store.
CTR — Click-through rate: CTR (click-through rate) is the percentage of people who click an ad after seeing it.

F

Frequency — Ad frequency: Frequency is the average number of times each person in an audience has seen an ad.

G

GEO — Generative engine optimization: GEO (generative engine optimization) is making your brand and products easy for AI answer engines — ChatGPT, Perplexity, Gemini — to understand and cite.

H

Hook — Ad hook: A hook is the opening of an ad — the first one to three seconds of a video, or the headline and image of a static — designed to stop someone scrolling.
Hook rate — Thumb-stop rate: Hook rate is the share of impressions in which viewers watch the first few seconds of a video ad.

I

Internal linking: Internal linking is linking between pages on your own site to guide visitors and pass ranking authority to important pages.

L

llms.txt: llms.txt is a plain-text file at a site's root that points AI systems to the site's most useful pages, in Markdown.
Lookalike audience: A lookalike audience is an ad audience of new people who resemble an existing group, such as past purchasers.
LTV — Customer lifetime value: LTV (customer lifetime value) is the total revenue — or gross profit — a customer generates over their relationship with your store.

M

MER — Marketing efficiency ratio: MER (marketing efficiency ratio) is total store revenue divided by total marketing spend across all channels.

N

Negative keywords: Negative keywords are search terms you exclude so your ads don't show for irrelevant queries.

P

Performance Max — PMax: Performance Max (PMax) is a Google Ads campaign type that runs across Search, Shopping, YouTube, Display, Gmail, and Maps from one campaign, using asset groups.
Pixel — Tracking pixel: A pixel is a snippet of code on your website that reports visitor actions — page views, add-to-carts, purchases — back to an ad platform.

R

Responsive search ad — RSA: A responsive search ad (RSA) is a Google search ad built from up to 15 headlines and 4 descriptions that Google combines automatically.
Retargeting — Remarketing: Retargeting shows ads to people who have already interacted with your store — visited, viewed a product, or added to cart — but haven't bought.
ROAS — Return on ad spend: ROAS (return on ad spend) is the revenue generated for every unit of currency spent on advertising.

S

Search intent: Search intent is what a searcher actually wants from a query — to learn something, compare options, or buy.
SEO — Search engine optimization: SEO (search engine optimization) is improving a website so it ranks higher in organic search results for relevant queries.
Spark Ads: Spark Ads are TikTok ads that boost an existing organic post — yours or a creator's — keeping its likes, comments, and profile link.
Statistical significance: Statistical significance is the confidence that a difference between test variants is real rather than random noise.
Structured data — Schema markup: Structured data (schema markup) is code, usually JSON-LD, that describes a page's content — products, prices, reviews, FAQs — in a format machines can read.

T

Thumb-stop ratio — Scroll-stop rate: Thumb-stop ratio is the percentage of people who stop scrolling to watch a video ad — another name for hook rate.
tROAS — Target return on ad spend: tROAS (target ROAS) is a Google Ads bidding strategy that aims to achieve a set return on ad spend.

U

UGC — User-generated content: UGC (user-generated content) is content — reviews, photos, videos — created by customers or creators rather than by the brand itself.
UGC ads — User-generated content ads: UGC ads are paid ads built in the style of user-generated content — a person talking to camera about a product, filmed casually.
Upsell: An upsell encourages a customer to buy a higher-value version, a larger size, or an add-on to what they're already buying.