Performance Marketing Glossary

Two ways of controlling budget on Meta: with ABO the budget sits at ad-set level, with CBO at campaign level, where the algorithm distributes it dynamically across the best ad sets.

AI-automated shopping campaign from Meta that largely optimizes audiences, placements and creatives on its own. It is only as good as the product feed and the signal quality you feed it.

The average order value (revenue ÷ orders). A profitability lever: a higher AOV lowers the relative share of CAC and shipping costs per order.

The period during which a conversion is credited to an ad (e.g. 7-day click / 1-day view). It determines what Meta optimizes toward – but it is the platform's view, not the whole truth.

The ROAS at which a campaign covers its variable costs (selling price ÷ contribution margin). Below it, advertising burns money – which is why the target ROAS belongs clearly above it.

The average cost of winning a new customer. A key profitability indicator – especially when scaling, you should keep an eye on CAC.

Server-side interface that sends conversion events directly to Meta – in parallel to the browser pixel. It provides more complete data when browser tracking is blocked.

The total contribution margin a customer delivers over the entire business relationship. Anyone who increases CLV can justify higher acquisition costs.

The principle of bundling budget into a few broad ad sets instead of spreading it across many small ones. It gives the algorithm more signals per unit and keeps ad sets in stable delivery.

What remains per sale after variable costs (cost of goods, shipping, returns, fees). The real benchmark for profitable scaling – not revenue alone.

A bidding strategy with a target CPA as an efficiency guardrail. It gives more control than “highest volume”, but can choke delivery if the cap is set too tight.

The cost of a single click on an ad. It says something about creative and audience relevance, but on its own it is no measure of success – what matters is what happens after the click.

Cost per 1,000 impressions. Rising CPMs are the most important early warning sign of tired creatives (creative fatigue).

A system that continuously delivers new angles and variants instead of one-off campaign assets. A prerequisite for scaling, because ads tire over time (rising CPMs).

A structured process for testing ad creatives against each other. A proven approach is to separate exploration creatives (new angles) from iteration creatives (variants of winners).

TikTok Shop's commission model: creators link products in videos and LIVEs and earn a commission per sale. For brands, a scalable content and revenue channel – the best affiliate videos can additionally be amplified as ads.

TikTok's official platform for finding and briefing creators for collaborations – with data on reach, audience and performance. The starting point for UGC production and affiliate partnerships.

A commerce model in which products create demand in the feed instead of being found via search – the algorithm shows products before anyone looks for them. The core principle behind TikTok Shop and a key difference to marketplaces like Amazon.

Merging a pixel and a Conversions API event into a single one (same event_id). Without it, Meta counts purchases twice and optimizes on the wrong numbers.

A metric (0–10) for how well transmitted events can be matched to real users. As a rule of thumb it should be above 7 so that delivery optimizes cleanly.

Enriching the product feed with real performance KPIs and clean templates to improve dynamic catalog campaigns (e.g. Advantage+ Shopping, PMax).

A fulfilment programme in which TikTok handles storage, shipping and parts of customer service for shop orders – comparable to FBA on Amazon. The alternative to shipping yourself; relevant for delivery SLAs and your seller score.

Optimizing content and data to be chosen and cited by AI systems (ChatGPT, Perplexity, Google AI) as a recommendation – the counterpart to SEO for generative search.

The gross value of all products sold through a channel – the central revenue metric in TikTok Shop. GMV alone says nothing about profitability: only after commission, creator payouts and returns does the contribution margin emerge.

TikTok's campaign type for TikTok Shop: the system automatically optimises bids, audiences and placements towards maximum shop revenue, drawing on affiliate content as creative. You steer via target ROI and budget instead of individual ad groups.

The first 1–3 seconds of an ad that stop the scroll. The single most important lever in the creative – without a hook, the rest doesn't matter.

The revenue a channel truly generates on top of what would have happened anyway. It shows whether budget drives real growth or merely collects existing purchases.

The initial phase in which Meta optimizes an ad set until it delivers stably – roughly 50 conversions per week as a guideline. Too many small ad sets never exit the learning phase.

Live broadcasts on TikTok with directly linked products: viewers add items to their basket without leaving the stream. Works especially well for products that benefit from demonstration and for limited-availability drops.

An audience that finds statistically similar users based on a source group (e.g. buyers). Under creative-driven delivery it loses importance.

Total revenue divided by total ad spend across all channels. A robust north star when the attribution of individual platforms becomes unreliable.

Umbrella term for all ads delivered via Meta Ads Manager on Facebook, Instagram, Messenger and the Audience Network. Facebook ads and Instagram ads are channels within Meta Ads – steered through a shared budget and creative setup.

An AI system at the retrieval layer that decides which ads qualify before the auction – based on creative signals. This effectively turns the creative into the targeting.

A code snippet that captures user actions in the browser and reports them to Meta. Ideally complemented by the server-side Conversions API (CAPI).

The event a campaign optimizes toward (ideally “Purchase”). The algorithm looks for people who trigger exactly this event – the choice decides between revenue and cheap clicks.

Collective term for paid ads on social media platforms such as Meta, TikTok and Snapchat – as opposed to organic reach. A paid social agency steers budgets, audiences and creatives across several platforms towards measurable business goals.

Marketing optimised for measurable actions such as purchases or leads, steered via KPIs like ROAS, MER and CAC. Paid social is one of the most important performance marketing channels in e-commerce.

A structured data source with products, prices, availability and images. The basis for Advantage+ Shopping and dynamic retargeting – only as good as the required fields it contains.

The shop area directly on a brand's or creator's TikTok profile: users browse the range and buy without leaving the app – TikTok Shop's storefront beyond feed and LIVE.

The targeted re-engagement of users who have already interacted with your brand – such as website visitors or cart abandoners.

Revenue per euro of ad spend (revenue ÷ ad spend). Platform ROAS becomes less reliable under automated campaigns – complement it with MER and a profit view.

An organic or promoted TikTok video with a pinned product card from TikTok Shop – the purchase starts with one tap from the video. The standard format through which shop revenue is generated in the For You feed.

A TikTok format that promotes organic creator posts as an ad. It keeps the native feel and credibility of the original post.

A code snippet or server-side Events API reporting actions such as purchases from your own online shop back to TikTok. The basis for conversion optimisation, retargeting and evaluating campaigns outside TikTok Shop.

TikTok's integrated shop: products are discovered and bought directly in the app – via shoppable videos, LIVE shopping and the Product Showcase, without switching to an external online shop. Sales run through the Seller Center; TikTok retains a commission.

Authentic content generated by users or creators. It feels more native in the feed than glossy productions and often beats them on performance in paid social.

An ad format that embeds TikTok Shop products directly into promoted videos – including product card and in-app checkout. The link between classic TikTok ads and the shop catalogue.