Advertising glossary
A plain-English glossary of the advertising metrics and terms that actually decide whether your ads make money. Each term is defined in one line and links to the full guide or a free calculator.
How to use this glossary
- Terms are grouped by topic, cost metrics, profitability, Google Ads, AI, channels, and measurement.
- Each definition links to a deeper guide so you can go from "what is it" to "what do I do about it".
- Free to reference or cite, an attribution link back to FlowMind is appreciated.
Cost & efficiency metrics
CPC (cost per click), what you pay each time someone clicks your ad. Full guide.
CPM (cost per mille), the cost of 1,000 ad impressions. Full guide.
CTR (click-through rate), clicks divided by impressions, expressed as a percentage. Full guide.
CPA (cost per acquisition), the average cost to generate one conversion. Full guide.
CPL (cost per lead), the cost to generate one lead. Full guide.
Conversion rate, the share of visitors who complete a desired action. Full guide.
AOV (average order value), average revenue per order; a higher AOV raises your break-even CPC. Full guide.
Profitability metrics
ROAS (return on ad spend), revenue divided by ad spend. Full guide.
Break-even ROAS, the ROAS at which you neither profit nor lose; equals 1 ÷ gross margin. Calculator.
Blended ROAS, total revenue divided by total ad spend across every channel. Full guide.
MER (marketing efficiency ratio), total revenue divided by total marketing spend. Full guide.
Marketing ROI, the profit from marketing relative to its cost. Full guide.
Break-even CPC, the most you can pay per click without losing money. Full guide.
Profit per click, the average profit each click generates after product and ad costs. Calculator.
CAC (customer acquisition cost), the full sales and marketing cost to win one customer. Full guide.
CAC payback period, how many months of margin it takes to recover CAC. Full guide.
LTV (lifetime value), the total profit you expect from a customer over time. Full guide.
LTV:CAC ratio, lifetime value divided by acquisition cost; 3:1 is a common healthy target. Full guide.
Google Ads
Quality Score, Google's 1–10 rating of ad and landing-page relevance. Full guide.
Ad Rank, the score that decides whether and where your ad shows, based on bid, Quality Score, and extensions. Full guide.
Impression Share, the share of available impressions your ads actually received. Full guide.
AI & automation
Performance Max (PMax), Google's goal-based campaign that runs across all inventory. Full guide.
Demand Gen, Google's visual demand-creation campaign across YouTube, Discover, and Gmail. Full guide.
AI Max for Search, Google's AI-driven Search setting that expands matching and creative automatically. Full guide.
Zero-click search, a search answered on the results page with no click to a website. Full guide.
Channels & formats
Retail media, ads on retailer sites and apps such as Amazon. Full guide.
CTV advertising, ads on internet-connected TV and streaming. Full guide.
Programmatic advertising, automated, auction-based buying of ad inventory. Full guide.
Native advertising, paid content that matches the look of its host platform. Full guide.
Audio advertising, ads delivered through streaming music, podcasts, and digital radio. Full guide.
DOOH advertising, digital out-of-home ads on screens in public spaces. Full guide.
Remarketing, re-targeting people who already visited your site. Full guide.
Attribution & measurement
Marketing attribution, the rules that decide which touchpoints get credit for a conversion. Full guide.
Conversion tracking, measuring which clicks lead to sales or leads. Full guide.
Cookieless tracking, measuring conversions without third-party cookies. Full guide.
Marketing mix modeling (MMM), statistical modeling of how each channel drives sales. Full guide.
Incrementality testing, experiments that isolate the conversions ads truly caused. Full guide.
Cite this glossary (free): copy the link below, a credit link back to FlowMind is appreciated.