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E-Commerce Glossary

ThoughtMetric's glossary of the most important e-commerce terms

Marketing Metrics

Add To Cart (ATC)

The Add To Cart (ATC) metric represents the number of add to cart events.

Average Order Value

The average amount of money spent per transaction in a store or website.

Average Time on Site

The average duration visitors spend browsing a website during a session.

Bounce Rate

The percentage of visitors who leave a website after viewing only one page.

Cart abandonment rate

The percentage of online shoppers who add items to their cart but exit without completing the purchase.

Churn Rate

The percentage of customers who stop using a company's product or service during a given time frame.

Click through rate (CTR)

The percentage of people who click on a specific link out of the total users who view a page, email, or advertisement.

Conversion Rate

The percentage of visitors to a store who place an order.

Cost Of Goods (COGS)

The total cost of manufacturing or acquiring the products sold by a company during a specific period.

Cost Per 1000 Impressions (CPM)

The cost an advertiser pays for one thousand views or impressions of an advertisement.

Cost Per Acquisition (CPA)

The cost an advertiser pays to acquire a new customer, typically calculated by dividing the total campaign cost by the number of conversions.

Cost Per Click (CPC)

The amount an advertiser pays each time a user clicks on their online advertisement.

Cost Per Engagement (CPE)

The advertising cost allocated for each interaction or engagement with a targeted ad campaign, such as likes, shares, or comments.

Cost per purchase (CPP)

The amount an advertiser spends to acquire a single customer purchase through a specific marketing campaign.

Customer Acquisition Cost (CAC)

The total cost associated with acquiring a new customer, including all marketing and sales expenses.

Customer Lifetime Value (CLV)

The total revenue a business can expect from a single customer throughout their relationship with the company.

Frequency

The average number of times a target audience sees an advertisement over a specific period.

Impression

An Impression is counted each time an advertisement is displayed on a user's screen, regardless of whether it is clicked or not.

Marketing Efficiency Ratio (MER)

A metric that evaluates the effectiveness of a marketing campaign by comparing the revenue generated to the marketing spend.

Pageview

A pageview is recorded each time a user visits a webpage on a site.

Profit Margin

The percentage of revenue that remains as profit after all expenses are deducted from total sales.

Reach

The total number of unique individuals who see an advertisement or content

Refund rate

The percentage of sales that are returned by customers and refunded by the business.

Repeat customer rate

The percentage of customers who have made more than one purchase from a business within a given timeframe.

Return On Ad Spend (ROAS)

The revenue generated for every dollar spent on advertising.

Return on Investment (ROI)

Measures the profitability of an investment by comparing the net profit to the cost of the investment.

Revenue

The total amount of money a business receives from its sales of goods or services, before any expenses are deducted.

Session

A Session is a period of time a user is actively engaged with a website

Shopping cart abandonment rate

The percentage of online shoppers who add items to their cart but exit without completing the purchase.

A/B testing

A method of comparing two versions of a webpage or app to determine which one performs better.

Abandoned Cart

When a shopper adds items to their online shopping cart but leaves the site without completing the purchase.

Ad Copy

The text or written content used in advertising and promotional materials to convey a message or information about a product or service.

Ad Placement

The strategic positioning of advertisements on a website.

Affiliate Marketing

A performance-based marketing strategy where businesses pay commissions to external websites for traffic or sales generated through their referrals.

Attribution

The process of identifying and assigning credit to the marketing channels or touchpoints that contributed to a desired outcome or conversion, such as a sale or lead generation.

Attribution model

A set of rules or methodology used to determine how credit for conversions or outcomes is assigned to different marketing channels or touchpoints within a customer's journey.

Attribution Window

The timeframe during which conversions or actions are credited to specific marketing interactions.

Audiences

The specific group of individuals or demographics targeted by an advertising campaign.

Bid Strategy

The approach or method used to determine the maximum amount an advertiser is willing to pay for a click.

Bottom of Funnel (BOFU)

The stage in the marketing or sales funnel where leads are closest to making a purchase decision.

Campaign Budget Optimization (CBO)

A feature in digital advertising platforms that automatically allocates campaign budgets across ad sets to maximize overall performance.

Cohort Analysis

The examination of a group of individuals who share a common characteristic or experience over a specific period to uncover insights into their behavior or performance.

Conversion

The desired action taken by a user in response to a marketing effort, such as making a purchase.

Conversion Funnel

The step-by-step process that leads potential customers from initial awareness to eventual conversion, typically consisting of stages like awareness, consideration, and action.

Cookie

A small piece of data stored on a user's device by a website, used to remember information about the user's browsing behavior.

Creative

The visual and textual components of an advertisement designed to capture the audience's attention.

Customer Journey

The complete sum of experiences that customers go through when interacting with a brand.

Data-Driven Attribution

A method of assigning credit for conversions to different marketing touchpoints based on data analysis and algorithmic modeling.

Direct To Consumer (DTC)

A business model where products are sold directly to consumers, bypassing traditional retail channels.

First Touch Attribution

A marketing attribution model that assigns credit for conversions to the first interaction a customer has with a brand.

GCLID

Google Click Identifier, a parameter added to URLs for tracking clicks in Google Ads campaigns.

Gross Margin

The difference between revenue and the cost of goods sold, representing profitability before deducting operating expenses.

Influencer Marketing

Collaborative strategy where brands partner with individuals with large followings to promote products or services.

Key Performance Indicators (KPI)

Quantifiable metrics used to evaluate the success of an organization, project, or activity in achieving objectives.

Last Touch Attribution

A marketing attribution model that assigns credit for conversions to the last interaction a customer has with a brand before making a purchase.

Linear Attribution

A marketing attribution model that evenly distributes credit for conversions across all interactions a customer has with a brand.

Lookback Window

A specified period during which conversions are attributed to interactions with marketing channels or campaigns, allowing analysis of past performance.

Marketing Mix

A combination of marketing tactics or elements, including product, price, promotion, and place (distribution), tailored to achieve specific business objectives and target audience needs.

Net revenue retention

A metric measuring the total revenue retained from existing customers over a specific period, accounting for churn, upgrades, and downgrades.

Organic traffic

Website visitors who arrive at a site through unpaid, natural search engine results, excluding paid advertisements.

Paid Search

Advertising model where advertisers bid on keywords to display ads in search engine results, paying when users click on their ads.

Payback period

The amount of time it takes for an investment to generate enough cash flow to cover its initial cost, often used to assess investment feasibility and risk.

Pay Per Click (PPC)

An online advertising model where advertisers pay a fee each time their ad is clicked, typically used in search engine advertising platforms like Google Ads.

PII (Personally Identifiable Information)

Any data that could potentially identify a specific individual, such as name, address, social security number, or email address.

Position Based Attribution

A marketing attribution model that assigns credit for conversions to both the first and last interactions a customer has with a brand, as well as distributing some credit to intermediate touchpoints.

Remarketing

Reaching out to potential customers who have previously shown interest, aiming to re-engage and encourage conversion.

Time Decay Attribution

A marketing attribution model that assigns more credit to interactions that occur closer in time to a conversion, reflecting the diminishing influence of earlier touchpoints.

Tracking Pixel

A small, transparent image embedded in a web page or email to collect data on user behavior and interactions.

UTM

Urchin Tracking Module, parameters added to URLs for tracking campaign performance in Google Analytics.

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