E-commerce Glossary

Ad Spend

Total amount invested in paid advertising over a given period (Meta Ads, Google Ads, TikTok Ads, etc.).

Ad spend is the sum of expenses across all advertising platforms. It is a major cost item for most e-commerce businesses, typically between 15% and 30% of revenue.

The optimal budget depends on your margin and growth goals. Simple rule: your ad spend should not exceed your contribution margin (gross margin - variable costs).

Example: if your contribution margin is 40%, your theoretical maximum ad spend is 40% of revenue. In practice, aim for 15-25% to maintain a sufficient net margin.

Fullmetrix centralizes Meta Ads, Google Ads, and TikTok Ads spend to calculate blended ROAS, POAS, and MER (Marketing Efficiency Ratio) automatically.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition
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