Plain-English definitions of the paid advertising terms that come up when you run Meta and Google ads.
Setting a fixed budget for each individual ad set.
Ad Set Budget Optimization, or ABO, is a Meta setting where you set a fixed budget for each ad set rather than letting the campaign distribute it. This gives you direct control over how much each audience or placement gets.
ABO is commonly used for testing, because it guarantees each ad set gets enough budget to gather data. Once winners are clear, many buyers move budget into a CBO campaign to scale.
Meta's suite of automated campaign and targeting tools.
Advantage+ is Meta's suite of automated tools for campaigns, audiences, and placements. Advantage+ Shopping Campaigns, for example, automate much of the setup and optimization of a purchase-focused campaign inside Meta.
These tools automate parts of a single campaign. They do not move budget across your whole account toward your targets or enforce the controls you set, which is the layer an automated ads manager adds on top.
Setting one budget at the campaign level and letting the platform distribute it.
Campaign Budget Optimization, or CBO, is a Meta setting where you set a single budget at the campaign level and let Meta distribute it across ad sets in real time, sending more to the ad sets that are performing best.
CBO is generally used to scale once you know which audiences and creatives work. Its counterpart is ABO, where you control the budget of each ad set yourself, which is often preferred for testing.
The percentage of people who click your ad after seeing it.
Click-through rate, or CTR, is the percentage of people who click your ad after seeing it, calculated as clicks divided by impressions. It is a quick signal of how relevant and compelling your ad is to the audience.
A higher CTR often lowers your costs, because platforms reward relevant ads with cheaper placements. Very low CTR usually points to a creative or targeting problem.
The average cost to acquire one customer or conversion.
Cost per acquisition, or CPA, is the average amount you pay to acquire one customer or complete one conversion, such as a purchase. It is total ad spend divided by the number of acquisitions.
CPA is a key profitability metric: as long as your CPA is below the value of a customer, the campaign is working. Optimizing toward a target CPA is a common goal for both manual buyers and automated systems.
The average amount you pay for one click on your ad.
Cost per click, or CPC, is the average amount you pay each time someone clicks your ad. It is total spend divided by clicks, and it reflects both how competitive your keywords or audiences are and how relevant your ad is.
A lower CPC means more traffic for the same budget, but clicks only matter if they convert, so CPC is best judged together with conversion rate and CPA.
The average amount you pay to generate one lead.
Cost per lead, or CPL, is the average amount you pay in advertising to generate one lead, such as a form fill or a sign-up. It is calculated by dividing total ad spend by the number of leads generated.
CPL is the core metric for lead-generation campaigns. Keeping it low and stable as you scale is the main job of optimization: without active management, CPL tends to creep upward.
The cost to show your ad one thousand times.
Cost per mille, or CPM, is the cost to show your ad one thousand times, where mille is Latin for thousand. It is a measure of how expensive it is to reach an audience, not of how well your ads convert.
CPM rises and falls with competition, season, and audience. It is useful for spotting when reach is getting more expensive, but it should always be read alongside conversion metrics like CPA and ROAS.
Scheduling ads to run only at certain times of day or week.
Dayparting, or ad scheduling, is running your ads only during certain hours or days when they perform best, rather than around the clock. If your leads convert during business hours, for example, you might pause spend overnight.
Done well, dayparting cuts wasted spend during low-converting windows. It is one of the controls you can set so an automated buyer only spends when it counts.
A new audience that resembles your existing customers.
A lookalike audience is a new audience the ad platform builds to resemble a source group you provide, such as your customers or website visitors. The platform finds people who share traits with that source, so you can reach new prospects who look like your best existing ones.
Lookalikes are a common way to scale prospecting on Meta. Their quality depends heavily on the source list you give the platform.
The person or system that plans, buys, and optimizes paid advertising.
A media buyer is the person, or increasingly the software, responsible for planning, purchasing, and optimizing paid advertising. On platforms like Meta and Google, that means choosing where budget goes, setting bids, launching campaigns, and adjusting them as performance changes.
The job is relentless because ad auctions move constantly. A good media buyer watches performance, shifts budget toward what is working, pauses what is not, and scales winners without letting costs run away.
The practice of purchasing and managing paid ad placements.
Media buying is the practice of purchasing and managing paid advertising placements to reach an audience at the lowest effective cost. In digital advertising it is done through self-serve platforms like Meta Ads and Google Ads, where buying happens through real-time auctions.
Modern media buying is less about negotiating placements and more about continuous optimization: managing budgets, bids, audiences, and creative so that every dollar of spend works as hard as possible.
Google's automated campaign type that runs across all its channels.
Performance Max, often shortened to PMax, is a Google Ads campaign type that runs across all of Google's channels, including Search, Display, YouTube, Gmail, and Maps, from a single campaign. You provide goals, budget, and creative assets, and Google's automation handles placement and bidding.
PMax can find conversions across surfaces you might not manage manually, but it gives you less visibility and control, which is why an account-level management layer with clear goals and controls is valuable alongside it.
Showing ads to people who already interacted with your brand.
Retargeting, also called remarketing, is showing ads to people who have already interacted with your brand, such as visiting your site or adding an item to a cart. Because these audiences already know you, retargeting usually converts at a lower cost than reaching new people.
It is a core part of most ad strategies, but it works only at the scale your existing audience allows, so it is typically paired with prospecting campaigns that bring in new people.
Revenue generated for every dollar of ad spend.
Return on ad spend, or ROAS, is the revenue generated for every dollar spent on advertising. A ROAS of 4 means you earned four dollars in revenue for every one dollar of ad spend.
ROAS is the headline profitability metric for ecommerce advertising. The target ROAS you need depends on your margins: a business with thin margins needs a higher ROAS to be profitable than one with high margins.
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