Glossary
The numbers that decide whether ads work
Scaling Socials maintains this glossary of 25 paid media and unit economics terms for Indian D2C founders. Each entry gives a one-sentence definition, the formula where there is one, a worked example in rupees, and the mistakes we see most often on real accounts.
8 terms
Unit economics
- AOV Average order value, or AOV, is the average revenue a single order generates, calculated as total revenue divided by the number of orders in a period.
- AOV uplift AOV uplift is the measured increase in average order value produced by a deliberate change such as a bundle, a shipping threshold or a post-purchase offer.
- CAC Customer acquisition cost, or CAC, is the total sales and marketing cost required to win one new paying customer over a given period.
- CLV:CAC ratio The CLV:CAC ratio compares the gross profit a customer contributes over their lifetime with the cost of acquiring them, expressed as a multiple.
- Contribution margin Contribution margin is the money a single sale leaves behind after every variable cost of fulfilling it, and it is the pool from which advertising and fixed costs must be paid.
- First-purchase profitability First-purchase profitability is whether the gross profit from a customer's very first order is greater than what it cost to acquire that customer.
- LTV Customer lifetime value, or LTV, is the total gross profit a customer contributes across every order they place, for as long as they keep buying.
- Payback period CAC payback period is the time it takes for the gross profit from a customer to cover what it cost to acquire them.
4 terms
Paid media metrics
- CPC Cost per click, or CPC, is the amount an advertiser pays each time someone clicks their ad, calculated as ad spend divided by total clicks.
- CPM Cost per mille, or CPM, is what an advertiser pays for one thousand impressions of an ad, regardless of whether anyone clicks it.
- CTR Click-through rate, or CTR, is the percentage of people who click an ad after seeing it, calculated as clicks divided by impressions.
- ROAS Return on ad spend, or ROAS, is the revenue an advertising campaign generates for every rupee spent on it, calculated as attributed revenue divided by ad spend.
3 terms
Conversion
- Checkout abandonment Checkout abandonment is the share of shoppers who begin the checkout process but leave before completing payment.
- CVR Conversion rate, or CVR, is the percentage of visitors to a site or landing page who complete a purchase in a given period.
- Landing page CVR Landing page conversion rate is the percentage of people arriving on a page from an ad who go on to complete a purchase in that visit.
4 terms
Measurement
- Attribution window An attribution window is the period after someone clicks or views an ad during which a resulting purchase will still be credited to that ad by the advertising platform.
- Blended ROAS Blended ROAS is total revenue from all sources divided by total advertising spend across all platforms, ignoring which channel any individual sale is attributed to.
- Incrementality Incrementality is the additional revenue an advertising campaign genuinely caused, as distinct from the revenue it was credited with by an attribution model.
- MER Marketing efficiency ratio, or MER, is total business revenue divided by total marketing spend across every channel, regardless of what any platform claims to have caused.
3 terms
Creative
- Creative fatigue Creative fatigue is the decline in an ad's performance caused by the same audience seeing it repeatedly, rather than by any change in the offer or the targeting.
- Hook rate Hook rate is the percentage of people who are still watching a video ad three seconds after it begins, measured as three-second views divided by impressions.
- Thumb-stop ratio Thumb-stop ratio is the share of impressions where a viewer stopped scrolling long enough to register the ad, commonly measured as three-second video views divided by reach.
2 terms
Campaign types
- Advantage+ Shopping Advantage+ Shopping is Meta's largely automated campaign type for ecommerce, which hands audience selection, placement and budget distribution to Meta's algorithm in exchange for less manual control.
- Performance Max Performance Max is Google's automated campaign type that serves a single set of assets across Search, Shopping, YouTube, Display, Gmail and Discover from one budget and one goal.
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