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eCommerce Acronyms?

Posted on July 13, 2010 by Zach

A while back Get Elastic wrote a blog entitled 99 eCommerce Acronyms which I thought was interesting and informational especially for those new to the industry. For myself I often get in trouble with acronym speak by babbling multi-letter gibberish which I realize, after the fact, some may not understand. So I decided to add a few so that hopefully people know where I am coming from.

ERS - A commonly used acronym for Effective Revenue Share, a measure of the profitability and effectiveness of a given ad campaign or channel. ERS is equal to Marketing Cost divided by Revenue (Cost/Revenue) expressed as a percentage. ERS will indicate the total percentage of revenue that is absorbed by marketing cost.

TRS - Total Revenue Share is a measure of the profitability of an item, ad campaign or channel including the product cost and marketing cost. TRS is equal to (Marketing Cost + Product Cost) / Revenue, expressed as a percentage. TRS will indicate the total percentage of your revenue that is absorbed by product cost and marketing cost.

CPO - Cost Per Order, sometimes called cost per acquisition, is the dollar amount spent on advertising or marketing in order to end with a sale. CPO is calculated by (Marketing Cost / Number of Orders). CPO can be used to evaluate the effectiveness of certain types of marketing, as well as seeing what type of marketing is working well with the targeted consumer demographics.

ROAS - Return on Ad Spend, is a metric used to convey the amount of revenue that is generated for every dollar spent on marketing costs. Calculated as Revenue / Cost and expressed as a percentage. This value is the inverse of ERS.

EPC - Earnings Per Click, a revenue analysis for online advertising. EPC is a relative measure of the effectiveness of a site or section of a site in generating revenue for the site owner or publisher as it is often used in affiliate marketing for every 100 outbound clicks generated.

SERP - Search Engine Results Page, is the listing of web pages returned by a search engine in response to a keyword query. The results normally include a list of web pages with titles, a link to the page, and a short description showing where the keywords have matched content within the page. A SERP may refer to a single page or the page number of links returned, or to the set of all links returned for a search query.

COGS - Cost of Goods Sold, is a financial accounting term which describes the direct costs attributable to the production, assembly or redistribution of goods sold by a company. This can include material cost and direct labor cost and excludes indirect costs like advertising or R&D (Research and Development). This is also referred to as cost of sales.

SaaS - Software as a Service, a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it.

Special thanks to Channel Adviser and their Glossary.



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