Published October 28, 2026
Your media buyer says ROAS is up, and your finance lead says the month lost money. You're both right about different numbers, and until everyone in the room uses the same definitions, you'll spend your meetings arguing about words instead of deciding.
So for each term you get a short definition and the decision it should change, across profit, measurement, paid media, retention, the store, AI search and Amazon. Where a term has its own article in this series, its row links there. Platform details are as of 28 October 2026.
The right term depends on the decision in front of you, so start from the question and pick the number that answers it.
Judge growth on your store's own data first and on platform reports second, because Shopify records every order once while each ad platform counts the orders it can claim.
| Question you are asking | Term to use | Where the number comes from |
|---|---|---|
| Can we afford to grow faster? | Contribution margin, maximum CAC | Shopify orders plus your cost data |
| Is paid media paying for itself overall? | MER, aMER | Shopify revenue and total ad spend |
| Which campaign deserves more budget? | ROAS against a target, incrementality | Platform reports, checked by a holdout test |
| Are we keeping the customers we buy? | Repeat purchase rate, payback period | Shopify customer reports by cohort |
| Where does the store lose orders? | Conversion rate, cart abandonment | Shopify funnel report, GA4 funnel exploration |
| Do AI assistants recommend us? | AI visibility, GEO | Prompt tracking, GA4 and Shopify AI channels |
Profit terms come first because every spending target you set is built from them. Contribution margin per order is the number to find before any other, since without it you can't set a sensible ROAS or CAC.
| Term | What it means | What it should change |
|---|---|---|
| Contribution margin | Revenue from an order after its variable costs. Finance teams often split it into layers, after product cost (CM1), after shipping, fees and fulfillment (CM2) and after marketing (CM3) | CM2 sets the ceiling on what you can spend to win an order; CM3 must stay positive |
| Gross margin | Revenue after the cost of the goods sold, before shipping, fees and marketing | Pricing and product mix; on its own it understates breakeven ROAS |
| Breakeven ROAS | The ROAS at which ad spend uses up the whole margin, which works out as one divided by the margin left after product cost, shipping, payment fees and fulfillment | The floor below which a campaign loses money on the first order, explained in what is a good ROAS for a DTC brand |
| Customer acquisition cost (CAC) | Acquisition costs in a period divided by the number of new customers, in Shopify's definition | Whether spend is buying new customers at a price the margin supports |
| New-customer CAC (nCAC) | Spend divided by first-time customers only, where blended CAC divides by every customer who ordered | The cost of growth itself, since blended CAC looks better as returning buyers increase |
| Maximum CAC | The most you are willing to pay for a new customer, set from the margin they bring in over a payback window | The target media buyers bid toward on new-customer campaigns |
| Payback period | How long a new customer takes to return their acquisition cost in contribution margin | How much cash growth ties up, and how fast you can safely scale |
| Customer lifetime value (LTV) | The contribution margin a customer brings in over their whole relationship with the brand. Many tools report it as revenue, so check which | Long-range planning; for budget decisions we prefer a 90-day value you can measure |
| Average order value (AOV) | Revenue divided by the number of orders | Bundles, free-shipping thresholds and offers, since a higher AOV raises the CAC you can afford |
| Return rate and net sales | The share of sales refunded, and revenue after returns and discounts | Which revenue figure every other ratio uses; a brand with high returns should build targets on net sales |
If your CAC rises while spend stays flat, read why customer acquisition cost keeps rising before you change your bids.
ROAS, MER and aMER all divide revenue by ad spend, and the difference lies in which revenue and which spend. ROAS is a campaign number, MER is a business number, and acquisition MER isolates new customers.
Pick the one that matches the decision you're making, and use the same name for it in every report you send.
| Term | What it means | What it should change |
|---|---|---|
| ROAS | Revenue a platform attributes to an ad, divided by its cost. Google's guidance gives the example that a target of 500% means $5 in conversion value per $1 of spend | Bids and budgets between campaigns on one platform |
| Target ROAS | The ROAS a bidding system aims for. The higher the target, the fewer auctions the bidder will chase | The trade-off between volume and efficiency, covered in how to set ROAS targets by channel and customer type |
| MER (marketing efficiency ratio) | Total store revenue divided by total ad spend. Common Thread Collective calls it a North Star metric for the business, not a tool for ad-level decisions | Whether marketing as a whole pays, regardless of which platform claims the sale |
| Acquisition MER (aMER) | First-time customer revenue divided by total ad spend, a metric Common Thread Collective uses to track acquisition | Whether spend is growing the customer file or recycling existing buyers |
| Attribution window | The number of days after a click or view during which a platform credits a sale to an ad | How two ROAS figures compare; a 7-day click number and a 1-day click number are different measurements |
| Blended ROAS | Another name for MER, which Common Thread Collective lists among its aliases | Use one name in reports so nobody compares it with platform ROAS by mistake |
Attribution reports who touched a sale, and incrementality asks whether the sale would have happened anyway. Google researchers describe geo experiments as one approach Google has used to measure how well its ads work.
Before you trust a platform's ROAS, ask what test sits behind it. A ROAS figure nobody can trace to a test or to your Shopify orders is a red flag.
| Term | What it means | What it should change |
|---|---|---|
| Attribution | The rules a platform or analytics tool uses to give credit for a sale to one or more touchpoints | Day-to-day optimization inside a platform, with the bias of that platform in mind |
| Incrementality | The share of sales that would not have happened without the ad | How far to trust each platform's reported ROAS |
| Holdout test | An experiment that withholds ads from a random or matched group and compares their sales with a group that saw ads | The incrementality factor you apply to a channel's numbers |
| Geo experiment | A holdout test run by region, with ads switched off or changed in some areas and kept in others | Testing channels, such as TV or YouTube, where user-level holdouts are hard |
| Marketing mix modeling (MMM) | A statistical model that estimates each channel's contribution from spend and sales over time. Robyn's documentation recommends calibrating a model with experimental results | Budget splits across channels, once a brand has enough history and spend variation |
| Saturation | The point where each extra dollar in a channel buys less, a response that rises at a declining rate in Meta's Robyn documentation | Where to stop scaling a channel and move budget elsewhere |
| Post-purchase survey | A question at checkout or on the thank-you page asking how the customer heard about the brand | A check on channels that attribution misses, such as podcasts, word of mouth and AI assistants |
| Conversions API | Meta's way of sending purchase events from your server rather than only from the browser pixel | How complete Meta's purchase data is, which affects both reporting and bidding |
Choosing between a test and a model depends on your stage, and when a DTC brand needs incrementality testing or MMM sets out the order.
Paid media terms decide whether your ad spend finds new customers or pays again for existing ones. Prospecting and retargeting need separate targets, and these settings are how the platforms let you set them.
| Term | What it means | What it should change |
|---|---|---|
| Prospecting | Campaigns aimed at people who have not bought from the brand | Customer file growth; judge them on new-customer revenue |
| Retargeting | Campaigns aimed at site visitors, cart abandoners or past buyers | Hold them to a higher target, since many of these buyers would return anyway |
| Brand search | Paid search ads on your own brand name | Fund it as protection where competitors bid on your name |
| Performance Max | Google's campaign type that reaches Search, YouTube, Display, Discover, Gmail and Maps from one campaign | Feed quality, brand exclusions and conversion data, which steer it more than manual settings |
| Advantage+ | Meta's automated campaign options for audiences, placements and catalog ads, including Advantage+ sales campaigns | How much creative variety and catalog accuracy you supply |
| New customer acquisition goal | A Google Ads customer lifecycle goal that prioritizes bidding to reach new customers | Whether reported ROAS includes an added value for new customers, so check before comparing periods |
| Customer Match | Uploading your customer list to Google through Customer Match so it can recognize existing buyers | How accurately Google separates new from returning customers |
| CPM and CPA | Cost per thousand impressions, and cost per acquisition (a purchase or another chosen action) | CPM shows what attention costs; CPA shows what each result costs before you check its margin |
| Custom labels | Merchant Center fields that group products for bidding, for example by margin or season | Spend by margin and stock, explained in whether ad spend should follow inventory and margin |
Retention terms connect acquisition to profit, because for many brands the second order is where a new customer turns profitable. Shopify counts a returning customer as one whose order history already includes at least one order.
Read your returning rate beside a cohort view, so a strong old cohort doesn't hide a weak new one.
| Term | What it means | What it should change |
|---|---|---|
| Repeat purchase rate | The share of customers in a group who place a second order within a set period | Product, offer and flow changes aimed at the second order, covered in how DTC brands get customers to buy again |
| Returning customer rate | Returning customers as a share of all customers who ordered in a period | A quick health check; it mixes old and new cohorts, so read it beside a cohort view |
| Cohort | A group of customers who first bought in the same period, tracked together over time | Whether the customers bought this quarter behave better or worse than last year's |
| Flow | An automated email or SMS series triggered by a customer action, such as an abandoned cart or a first order | Revenue that arrives without adding campaign sends |
| Campaign (email and SMS) | A one-off send to a list or segment | Send frequency and list fatigue |
| Smart Sending | A Klaviyo setting that skips recipients who were sent a message recently | How flows and campaigns overlap in one inbox |
| Apple Mail Privacy Protection | An Apple Mail feature that loads email content automatically, which inflates open rates | Judge email on clicks and revenue, as set out in how email and SMS can earn more without sending more |
| Win-back | A flow sent to customers who have not bought in longer than their usual reorder interval | When to spend on reactivation and when to let a customer go |
Store terms move the focus from traffic to what happens after a visitor arrives. A site-wide conversion rate hides where orders are lost, so read your conversion rate by device, traffic source and funnel step.
| Term | What it means | What it should change |
|---|---|---|
| Conversion rate | The share of sessions that end in a purchase. Shopify changed how it measures sessions from 21 to 23 September 2026, so compare periods with care | Where to test first, read by device, source and page type, as in where DTC stores lose orders |
| Cart abandonment rate | The share of carts created that do not become orders. Baymard Institute keeps a list of published abandonment rates | Shipping cost display, checkout steps and payment options |
| Funnel | The steps from landing page to purchase, read in Shopify's Conversion rate breakdown report | Which step to fix first |
| A/B test | Showing two versions of a page to random groups and comparing results | Changes made on evidence instead of opinion |
| Replatforming | Moving the store to a new ecommerce platform | Redirects, tracking and product IDs, listed in what breaks in an ecommerce replatforming |
| 301 redirect | A permanent redirect from an old URL to a new one, which Shopify handles through its URL redirects settings | Whether search rankings and links survive a site change |
AI search terms are new enough that teams and vendors still use them loosely. Shopify's enterprise blog frames GEO as optimizing your brand and products so they appear when consumers search with AI tools like ChatGPT.
When a vendor pitches you one of these labels, ask what it delivers rather than what it's called.
| Term | What it means | What it should change |
|---|---|---|
| GEO (generative engine optimization) | Work that makes a brand and its products appear and be described correctly in AI assistant answers | Content, product data and outside mentions, defined fully in what generative engine optimization is for ecommerce |
| AEO (answer engine optimization) | A closely related term many agencies and vendors use, with a scope that overlaps heavily with GEO | Compare proposals on deliverables, not on the label |
| AI Overviews and AI Mode | Google's AI answers in Search. Google says a page needs to be indexed and eligible to be shown with a snippet to appear | Keep strong SEO foundations, since Google's AI features draw on its search index |
| AI visibility | How often, and how accurately, AI assistants mention a brand across a set of prompts | Prompt tracking over many runs, as set out in how to measure DTC AI search visibility |
| AI Assistant channel | A GA4 channel for traffic from assistants like ChatGPT, Gemini, Deepseek, Copilot and Grok; it excludes Google's AI Overviews and AI Mode | How AI referral traffic shows up in your reports, covered in tracking AI traffic in GA4 and Shopify |
| Agentic commerce | Shopping in which AI agents search, compare and sometimes buy on a shopper's behalf | Product data, checkout readiness and policies that an agent can read, explained in what agentic commerce means for DTC brands |
| Agentic Storefronts | Shopify's settings that let customers discover and buy your products in AI channels such as ChatGPT, Google AI Mode and Gemini, and Microsoft Copilot | Which assistants can show and sell your catalog, covered in how to get products into ChatGPT and Google AI Mode |
| Product feed | A structured file of products, prices, stock and attributes sent to Google Merchant Center, Meta or AI channels | What assistants and shopping ads know about each product |
| Structured data (schema) | Markup on a page that labels facts such as price, availability and reviews for machines | Product page accuracy in search and AI answers, detailed in technical AEO for ecommerce sites |
| llms.txt | A proposed text file listing a site's key pages for AI systems. Google's guide says its Search ignores llms.txt files | A low priority beside feeds, schema and content |
Amazon terms carry their own rules, and if you sell on your own store and on Amazon, you need both sets. The question that links them is whether Amazon sales add to your store or take from it, which growing on Amazon without taking sales from your store works through.
| Term | What it means | What it should change |
|---|---|---|
| Brand Registry | Amazon's program for brand owners, which requires an active registered trademark or a pending registration | Control of listings and access to brand tools |
| Featured Offer | The offer Amazon shows by default on a product page, once called the Buy Box. A product must be eligible for the Featured Offer to run Sponsored Products ads | Pricing, stock and fulfillment, since losing it can stop ads |
| Sponsored Products | Amazon's cost-per-click ads for individual listings | Amazon search visibility and launch velocity |
| FBA (Fulfillment by Amazon) | Amazon's service that stores, picks, packs and ships a seller's inventory | Prime eligibility, fees and stock planning across both channels |
| Halo effect | Sales that ads on one channel drive on another, such as Meta ads that lift Amazon sales | How to judge DTC ad spend when part of the return lands on Amazon |
We are a performance marketing and AI search agency, and we report each of these terms from the store's own data so every channel is judged by the same definitions.
Get a clear picture of where your store is losing revenue, what to stop now and which actions to take first with our DTC Growth Audit.
DTC Growth AuditEach week, look at net sales and orders, MER, new-customer revenue and what it cost to acquire, conversion rate, order value, returning customer rate and stock on your best sellers, and leave contribution margin for the monthly review, as which metrics a DTC brand should review every week lays out.
Each platform counts the sales it can link to its own ads within its attribution window, so two platforms can claim the same order. Shopify records each order a single time, which makes it the reference for total revenue, and measuring growth beyond platform ROAS shows how to report the gap to finance.
GEO builds on SEO. Google says a page must be indexed and eligible for a snippet to appear as a supporting link in AI Overviews or AI Mode, so a store with weak search foundations is unlikely to do well in AI answers either. The longer answer is in what GEO means for ecommerce.
Mike Le
Co-Founder, CB/I Digital and Conative AI
Mike Le co-founded CB/I Digital in New York in 2007 and has helped brands grow through search, paid media and data ever since. He started the agency's AI team in 2019 and later started Conative AI. He writes about how customers find and choose brands now that AI answers sit between them and the search results.
Follow Mike on LinkedInCopyright © 2026 CB/I DIGITAL INC. All rights reserved | Privacy Policy