Glossary
The vocabulary of digital advertising, A to Z, with what each term is actually used for.
Definitions only get you so far; what matters is which decision a term supports. Each entry says what it means and what it is good for.
A–C
| Term | Meaning | What it decides |
|---|---|---|
| Ad set | The level holding audience, placement, budget and schedule | Where signal concentrates or fragments |
| Attribution window | How long after a click or view a conversion is credited | How much of the result you can see |
| AOV — average order value | Revenue divided by orders | How much you can afford per order |
| Bid strategy | The rule the platform follows when bidding | Cost control versus volume |
| Blended CAC | Total marketing spend divided by all new customers | Whether the business is profitable, not the campaign |
| Broad targeting | Leaving audience selection to the model | Whether creative or targeting drives delivery |
| CAC — customer acquisition cost | Cost to acquire one paying customer | Whether growth is affordable |
| Contribution margin | Revenue minus variable costs, per order | The real budget available for acquisition |
| Conversion rate | Conversions divided by clicks | Whether the page delivers on the ad |
| Cost cap | Maximum average cost the platform may pay per result | Protecting efficiency while scaling |
| CPA — cost per acquisition | Spend divided by conversions | Campaign-level efficiency |
| CPC — cost per click | Spend divided by clicks | Ad relevance and competition |
| CPM — cost per thousand impressions | Spend divided by impressions × 1000 | Competition and creative quality, read together |
| Creative fatigue | Decay from repeated exposure to the same audience | When to refresh rather than re-bid |
| CTR — click-through rate | Clicks divided by impressions | Whether the promise motivates action |
D–L
| Term | Meaning | What it decides |
|---|---|---|
| Dayparting | Restricting delivery to certain hours or days | Rarely useful; usually costs learning |
| Dynamic creative | Platform assembling assets into combinations | Fast variant testing, weak concept testing |
| Frequency | Average impressions per person | Fatigue risk and audience exhaustion |
| Funnel | The stages between not knowing you and buying | Which message a given ad should carry |
| Hold rate | Longer-view rate on video | Whether content sustains the hook |
| Hook rate | Early-view rate on video | Whether the opening earns attention |
| Impression | One delivery of an ad | The unit everything is priced against |
| Incrementality | Sales that would not have happened without the ad | The only measure of real ad value |
| Learning phase | Period until delivery is optimized for an ad set | Why frequent edits raise costs |
| Lookalike audience | Model-built audience resembling a seed list | Retargeting-adjacent prospecting |
| LTV — lifetime value | Total margin a customer produces over time | The ceiling on what you may pay to acquire |
M–R
| Term | Meaning | What it decides |
|---|---|---|
| MER — marketing efficiency ratio | Total revenue divided by total ad spend | Whether the account works as a whole |
| Modelled conversion | An estimated, not observed, conversion | How much of the report is inference |
| Objective | The outcome the campaign optimizes for | What the algorithm will actually chase |
| Payback period | Time until a customer repays acquisition cost | How aggressively you can fund growth |
| Placement | The surface where the ad appears | Format requirements and cost differences |
| Prospecting | Advertising to people who do not know you | Whether the funnel refills |
| Retargeting | Advertising to people who already engaged | Harvest, not growth |
| ROAS — return on ad spend | Revenue divided by ad spend | Campaign efficiency, in platform terms |
S–Z
| Term | Meaning | What it decides |
|---|---|---|
| Server-side tracking | Sending events from your server, not the browser | Signal quality under consent limits |
| Statistical significance | Confidence a difference is not chance | When a test may be called |
| Thumb stop | The moment a scroll halts | The job of the first frame |
| UGC — user-generated content | Creative made in a real-user register | Trust and cost at the top of the funnel |
| Unit economics | Per-order revenue, cost and margin | Whether spending more helps or hurts |
| View-through conversion | Conversion after seeing, not clicking | How much credit to discount |
Two terms are worth keeping apart: ROAS is measured inside the platform and counts what the platform can attribute; MER is measured in your bank account. When they disagree, MER is the one that pays salaries.