The words, minus the fog

Return on ad spend — how much revenue an ad platform says your spend produced. It's the metric every ad account leads with.

Where it misleads: It's measured in revenue, not profit, and platforms count attribution in their own favor. A 4x ROAS on 20% margins is a loss with confetti.

Marketing efficiency ratio — blended across every channel, using revenue that actually arrived rather than platform-attributed revenue.

Where it misleads: It says nothing about which campaign worked. It's a company pulse, not a campaign decision tool.

Customer acquisition cost — what it costs to bring in one new buyer across all channels.

Where it misleads: Check what it's divided by: if it counts all ad spend but only 'new' customers, the definition varies by who's reporting it. Compare it to LTV, and discount LTV for return rates.

Average order value. A useful lever — bundles, thresholds, upsells — when margin survives the change.

Where it misleads: AOV growth from discounts or heavy bundles can be net-negative. Ask what each extra dollar of AOV costs.

Cost of goods sold — what the unit in the customer's hands actually cost you, including freight and packaging.

Where it misleads: Founders often record invoice cost only, forgetting inbound shipping and packaging. The gap is usually 5–10 points of margin.

The money a product (or channel, or campaign) contributes toward fixed costs and profit, before ads and overhead.

Where it misleads: It's the number that decides break-even ROAS — and it's the one most dashboards never show per SKU.

Margin before operating costs. Useful for comparing products; incomplete for steering a business.

Where it misleads: A healthy gross margin with unhealthy fees and shipping is a common blind spot for marketplace sellers.

What you actually keep. For most DTC brands, single digits — which is why cost-side surprises sting so much.

Where it misleads: Net margin includes ad spend; when spend scales faster than profit, net margin is the first thing to slide.

The ROAS at which a campaign stops making money. Contribution margin of 30% → break-even ROAS of ~3.3x.

Where it misleads: It changes when your costs change. A break-even computed in January is fiction by June.

Lifetime value — ideally measured in contribution profit, not revenue.

Where it misleads: LTV measured in revenue pairs badly with CAC measured in spend. Compare the same currency on both sides, or the ratio lies.

How many days until you stock out at the current sell-through rate.

Where it misleads: It's an average — a spike from a viral moment or a Q4 rush outruns it. Good forecasts watch the trend, not just the average.