DTC Operator Glossary

All terms (alphabetical)

A

• ABO (Ad Set Budget Optimization) — ABO is the Meta campaign structure where you set a fixed budget per ad set and the algorithm optimizes within each ad set independently.
• Ad Frequency — Ad frequency is the average number of times each unique user in your audience has seen a specific ad over a given window (typically 7 or 30 days).
• AOV (Average Order Value) — AOV is the average dollar amount per order, calculated as total revenue divided by total orders across a defined window.
• AOV Uplift — AOV uplift is the incremental dollar lift in average order value attributable to a specific merchandising, upsell, or bundling change.
• ASIN (Amazon Standard Identification Number) — An ASIN is Amazon's unique 10-character product identifier, assigned when a product is first listed on Amazon.
• Attribution — Attribution is the methodology used to credit revenue to marketing touchpoints — first-click, last-click, linear, time-decay, or data-driven multi-touch.

B

• Blended CAC — Blended CAC is total marketing spend divided by total new customers, regardless of whether each customer was attributed to a paid source.
• Bundle Rate — Bundle rate is the percentage of orders that include a bundle SKU or multi-product offer (buy 3, save 15%; starter kit; build-your-own pack).

C

• CAC (Customer Acquisition Cost) — CAC is the total cost to acquire a new customer, calculated as marketing spend divided by new customers acquired in the same window.
• CAPI (Conversions API) — CAPI (Conversions API) is a server-side API that sends conversion events from your backend directly to ad platforms like Meta and TikTok, bypassing the browser pixel.
• CBO (Campaign Budget Optimization) — CBO is a Meta campaign structure where you set a single budget at the campaign level and the algorithm distributes spend across ad sets based on which is performing best in real time.
• Churn Rate — Churn rate is the percentage of customers (or subscribers) who stop buying or cancel in a given period, typically measured monthly.
• Cohort Analysis — Cohort analysis groups customers by a shared attribute (usually first-order month) and tracks how that group behaves over time — revenue, retention, repeat rate, refund rate.
• Contribution Margin — Contribution margin is revenue minus all variable costs to deliver that revenue — COGS, payment processing, fulfillment, last-mile shipping, and the specific marketing spend that produced the order.
• Creative Fatigue — Creative fatigue is the decline in ad performance — falling CTR, rising CPM, falling ROAS — as the target audience sees the same creative repeatedly.

G

• Gross Margin — Gross margin is revenue minus cost of goods sold (COGS), expressed as a percentage of revenue.
• GTIN (Global Trade Item Number) — A GTIN is the universal product identifier used across global supply chains and retail channels.

I

• Incrementality — Incrementality measures how many orders or how much revenue a marketing channel actually caused, versus how many would have happened anyway.

L

• Lookalike Audience — A lookalike audience is a Meta or Google ad audience generated from a seed list (customers, high-value purchasers, recent buyers) by the platform's matching algorithm.
• LTV (Lifetime Value) — LTV is the projected total revenue a customer will generate over their relationship with your brand.

M

• MER (Marketing Efficiency Ratio) — MER is total revenue divided by total marketing spend across all channels — paid, agency fees, creator partnerships, email tools, the works.

N

• NPS (Net Promoter Score) — NPS is the score derived from asking 'how likely are you to recommend this brand to a friend' on a 0-10 scale.

P

• Payback Period — Payback period is the number of days or months it takes for the contribution margin from a customer cohort to fully cover the CAC spent to acquire that cohort.

R

• Repeat Purchase Rate — Repeat purchase rate (RPR) is the percentage of customers who place a second order within a given window, regardless of product or timing.
• Replenishment Rate — Replenishment rate is the percentage of customers who reorder a consumable product within its expected use cycle (e.g., a 30-day supply being reordered by day 45).
• Retention Rate — Retention rate is the percentage of customers from a starting cohort who are still active (have purchased or remained subscribed) at a later point.
• ROAS (Return on Ad Spend) — ROAS is revenue divided by ad spend, usually reported per platform (Meta ROAS, Google ROAS) and as a blended figure across all paid channels.

S

• Subscription Attach Rate — Subscription attach rate is the percentage of eligible new customers who select a subscription option at checkout (vs.

T

• TOFU / MOFU / BOFU — TOFU (top of funnel), MOFU (middle of funnel), and BOFU (bottom of funnel) describe where a user is in their journey from awareness to purchase.

V

• Viral Coefficient — Viral coefficient (K-factor) is the number of new customers each existing customer generates through referral.