---
title: "Ecommerce ads glossary: ROAS, POAS, LTV | Product Metrics"
description: "Plain definitions of the metrics and Google Shopping terms behind product-level ad decisions, each with a formula, a worked example and a per-product view."
canonical: "https://www.productmetrics.io/glossary"
pageType: hub
language: en
publisher: "Product Metrics"
dateModified: 2026-10-07
---

> Content index: https://www.productmetrics.io/llms.txt

# Glossary

Plain definitions of the metrics and Google Shopping terms behind product-level ad decisions. Each entry gives a formula where one exists, a worked example in euros, and what the term means for one product.

## Return and margin metrics

- [ACOS vs ROAS](https://www.productmetrics.io/glossary/acos-vs-roas): ACOS is ad spend as a percentage of ad revenue, while ROAS is ad revenue divided by ad spend, so each is the inverse of the other.
- [Blended ROAS](https://www.productmetrics.io/blog/marketing-efficiency-ratio-vs-roas): ROAS on total revenue and total ad spend, instead of one campaign’s numbers.
- [Break-even ROAS](https://www.productmetrics.io/break-even-roas-calculator): The lowest ROAS at which a product covers its costs: 1 ÷ its margin.
- [COGS](https://www.productmetrics.io/glossary/cost-of-goods-sold): Cost of goods sold (COGS) is what it cost you to buy or make the products you sold in a period.
- [Contribution margin](https://www.productmetrics.io/glossary/contribution-margin): Contribution margin is the revenue from a sale minus its variable costs, such as product cost, shipping, payment fees and returns.
- [Cost per acquisition (CPA)](https://www.productmetrics.io/glossary/cost-per-acquisition): Cost per acquisition (CPA), also called cost per action, is ad spend divided by the number of conversions it brought, such as sales.
- [Gross margin](https://www.productmetrics.io/glossary/gross-margin): Gross margin is the share of revenue left after subtracting the cost of goods sold, shown as a percentage.
- [Gross vs net margin](https://www.productmetrics.io/glossary/gross-margin-vs-net-margin): Gross margin is the share of revenue left after the cost of goods sold, while net margin is the share left after every cost.
- [Marketing ROI](https://www.productmetrics.io/glossary/marketing-roi): Marketing ROI is the profit your marketing earns after its cost, shown as a percentage of that cost.
- [Markup vs margin](https://www.productmetrics.io/glossary/markup-vs-margin): Markup is profit as a share of cost, while margin is profit as a share of the selling price, so margin is always the smaller figure.
- [MER](https://www.productmetrics.io/blog/marketing-efficiency-ratio-vs-roas): Marketing efficiency ratio: total revenue divided by total marketing spend, across every channel.
- [POAS](https://www.productmetrics.io/blog/poas-vs-roas): Profit on ad spend: profit divided by ad spend, so 1 is break-even.
- [ROAS](https://www.productmetrics.io/glossary/roas): Return on ad spend (ROAS) is the revenue your ads generate for every euro you spend on them.
- [ROAS vs ROI](https://www.productmetrics.io/glossary/roas-vs-roi): ROAS divides the revenue from ads by ad spend, while ROI divides the profit left after costs and ad spend by that spend, so only ROI counts margin.
- [Target ROAS](https://www.productmetrics.io/blog/target-roas-from-margin): The average conversion value you tell Google Ads to aim for per unit of ad spend.
- [Variable cost](https://www.productmetrics.io/glossary/variable-cost): A variable cost is a cost that rises and falls with the number of orders you take, such as product cost, shipping and payment fees.

## Customers and measurement

- [CAC](https://www.productmetrics.io/glossary/cac): CAC stands for customer acquisition cost: the marketing spend in a period divided by the number of new customers it brought.
- [CAC vs CPA](https://www.productmetrics.io/glossary/cac-vs-cpa): CPA divides ad spend by every conversion, while CAC divides it by new customers only, so CPA looks cheaper whenever returning customers buy too.
- [Cohort analysis](https://www.productmetrics.io/glossary/cohort-analysis): Cohort analysis groups customers by a shared starting point, such as the month of their first order, and follows each group over time to compare what they do.
- [Cross-selling](https://www.productmetrics.io/glossary/cross-selling): Cross-selling is selling a related product alongside the one a customer is already buying, such as running socks with a pair of running shoes.
- [Data-driven attribution](https://www.productmetrics.io/glossary/data-driven-attribution): Data-driven attribution is a Google Ads attribution model that shares the credit for a conversion across the ad interactions before it, based on your account’s own data.
- [Incrementality](https://www.productmetrics.io/glossary/incrementality): Incrementality is the share of your sales that happened because of your advertising and would not have happened without it.
- [Last click attribution](https://www.productmetrics.io/glossary/last-click-attribution): Last click attribution gives all the credit for a conversion to the last click before it, and none to the clicks that came earlier.
- [LTV](https://www.productmetrics.io/blog/ltv-cac-ratio-ecommerce): Lifetime value: what a customer brings in over time, as revenue or, better, as profit.
- [Market basket analysis](https://www.productmetrics.io/glossary/market-basket-analysis): Market basket analysis finds which products are bought together by counting how many orders contain each combination of products.
- [nCAC](https://www.productmetrics.io/blog/customer-acquisition-cost-formula): New customer acquisition cost: ad spend divided by the new customers it brought.
- [Predicted LTV](https://www.productmetrics.io/blog/predicted-ltv): An estimate of what a customer will bring in over a set period, as opposed to observed lifetime value, which is what they have already brought in.
- [Repeat purchase rate](https://www.productmetrics.io/glossary/repeat-purchase-rate): Repeat purchase rate is the share of customers who ordered in a period and placed two or more orders in that same period.

## Shopping and Google Ads

- [Conversion value](https://www.productmetrics.io/glossary/conversion-value): Conversion value is the amount you tell Google Ads a conversion is worth, such as sales revenue or profit margin.
- [Custom labels](https://www.productmetrics.io/glossary/custom-labels): Custom labels are five attributes in a product feed, custom_label_0 to custom_label_4, that you fill with your own text to group products in campaigns.
- [Google Merchant Center](https://www.productmetrics.io/glossary/google-merchant-center): Google Merchant Center is a free Google tool where a shop uploads and manages its product data, so its products can appear on Google Shopping and across Google.
- [GTIN](https://www.productmetrics.io/glossary/gtin): A GTIN (Global Trade Item Number) is a unique number that identifies a product that can be priced, ordered or invoiced, usually shown as a barcode.
- [Maximize conversion value](https://www.productmetrics.io/glossary/maximize-conversion-value): Maximize conversion value is a Google Ads Smart Bidding strategy that helps you get the most conversion value from your budget.
- [MPN](https://www.productmetrics.io/glossary/mpn): An MPN (manufacturer part number) is the code a manufacturer assigns to identify one product among all the products it makes.
- [Performance Max](https://www.productmetrics.io/performance-max): A Google Ads campaign type that serves ads across Google’s channels, using the Merchant Center product feed for shops.
- [Product feed](https://www.productmetrics.io/glossary/product-feed): A product feed is a file or data source that lists your products, one per row, with attributes such as ID, title, price and availability.
- [Smart Bidding](https://www.productmetrics.io/glossary/smart-bidding): Smart Bidding is a set of Google Ads bidding strategies that use Google AI to optimise for conversions or conversion value in every auction.
- [Supplemental feed](https://www.productmetrics.io/glossary/supplemental-feed): A Google Merchant Center supplemental feed is a secondary data source that adds details to, or overrides details in, the products of your primary feed.

## Inventory and pricing

- [Days of inventory](https://www.productmetrics.io/glossary/days-of-inventory): Days of inventory, also called stock cover or weeks of cover, is how many days your current stock lasts at your recent selling rate.
- [Inventory turnover](https://www.productmetrics.io/glossary/inventory-turnover): Inventory turnover is how many times you sell your average stock in a period, calculated as cost of goods sold divided by average inventory value at cost.
- [Lead time](https://www.productmetrics.io/glossary/lead-time): Lead time is the time between placing an order with a supplier and receiving the stock, usually counted in days or weeks.
- [Price elasticity](https://www.productmetrics.io/glossary/price-elasticity): Price elasticity of demand is how strongly the units you sell respond to a price change: the percentage change in quantity divided by the percentage change in price.
- [Reorder point](https://www.productmetrics.io/glossary/reorder-point): The reorder point is the stock level at which you place a new order, so the stock you hold lasts through the supplier lead time with a buffer left.
- [Safety stock](https://www.productmetrics.io/glossary/safety-stock): Safety stock is the extra stock you hold beyond expected demand, so a sudden rise in sales or a late delivery does not leave you out of stock.
- [Sell-through rate](https://www.productmetrics.io/glossary/sell-through-rate): Sell-through rate is the share of the units available in a period that you sold, written as a percentage.
- [Slow-moving inventory](https://www.productmetrics.io/glossary/slow-moving-inventory): Slow-moving inventory is stock that sells much more slowly than the rest of your products, so it stays on the shelf and ties up money.
- [Stockout](https://www.productmetrics.io/glossary/stockout): A stockout is when a product has no units left to ship, so a shopper who wants it cannot buy it.

## Tracking

- [First-party cookie](https://www.productmetrics.io/glossary/first-party-cookie): A first-party cookie is a cookie set by the site the visitor is on, such as your shop, rather than by another domain.
- [GCLID](https://www.productmetrics.io/glossary/gclid): A GCLID, short for Google Click Identifier, is a parameter that Google Ads auto-tagging adds to the landing page URL after someone clicks your ad.

## Product Metrics terms

- [Full Signal Tracking](https://www.productmetrics.io/server-side-tracking): Server-side delivery of every purchase to Google Ads from an endpoint on your own domain, with five conversion actions: revenue, profit, new customers, returning customers and lifetime value.
- [Growth-share matrix](https://www.productmetrics.io/glossary/growth-share-matrix): The growth-share matrix, or BCG matrix, is a Boston Consulting Group framework that divides businesses into four types by market share and market growth.
- [Product Segmentation](https://www.productmetrics.io/product-segmentation): Product Metrics ML puts each product in one of six segments, by volume and return, and writes it to a Merchant Center label.

## About these entries

_Examples use illustrative data. Written by Berend Vrakking, founder of Product Metrics._

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Published by Product Metrics (Berend Vrakking, founder).

HTML version: https://www.productmetrics.io/glossary