Marketing Science Glossary

Attribution bias is the systematic error in assigning credit to marketing channels, typically favoring channels that are 'easier to track' (...

Attribution modeling is the rule-based process of assigning credit for a conversion to specific touchpoints. Common models include Last-Clic...

Attribution measures correlation (User saw ad -> User bought). Incrementality measures causation (Ad caused purchase). Attribution answers '...

Baseline demand represents the volume of customer interest and sales that exists independently of current paid marketing efforts. It is driv...

Baseline revenue is the portion of total revenue not explained by paid marketing spend. It includes organic demand, brand equity, repeat cus...

Blended CAC is Total Spend / Total New Customers. Incremental CAC is Total Spend / *Net New Paying* Customers generated by that spend. Blend...

Budget reallocation is the process of shifting spend from low-incrementality channels to high-incrementality channels. SpendSignal recommend...

Budget Reallocation Strategy is the systematic process of moving funds from saturated, low-marginal-return channels to unsaturated, high-mar...

Causal impact is the difference between an observed outcome (e.g., revenue) and a counterfactual prediction of what would have happened with...

CFO-Grade Marketing Metrics are financial indicators that a Chief Financial Officer accepts as valid proof of value. They rely on cash flow,...

Channel saturation occurs when you have reached the maximum effective reach of a specific audience or keyword set. At this point, additional...

Contribution Margin is the profitability of a product after deducting Variable Costs (COGS, Shipping, Payment Processing) and Variable Marke...

Correlation indicates that two variables move together (e.g., ad spend and sales). Causation indicates that one variable produces change in ...

Correlation-based attribution assigns credit based on the sequential occurrence of events (Ad -> Sale). It assumes that because the marketin...

A counterfactual is a modeled alternate reality used to estimate causality. In marketing measurement, it represents what total revenue would...

Counterfactual revenue is the modeled estimation of what revenue would have been in a parallel universe where a specific marketing intervent...

Decision Metrics (Strategy) tell you *where* to spend money (e.g., Incremental ROAS, CAC, Payback). Execution Metrics (Tactics) tell you *ho...

Demand creation channels are marketing avenues that introduce your brand to new audiences who were not previously looking for you. Examples ...

Demand harvesting refers to marketing activities that capture existing intent. These channels (Brand Search, Retargeting, Affiliate) convert...

Diminishing returns describe the decline in incremental revenue as spend increases. This effect is universal in marketing: the first $1,000 ...

Financial Truth in Marketing is the state where marketing performance reports exactly match the bank account reality. It requires stripping ...

Incremental CAC is the cost to acquire a customer who *would not have converted otherwise*. It removes 'organic' and 'baseline' customers fr...

Incremental ROAS (iROAS) measures the revenue that would not have occurred without a specific marketing channel, divided by the spend on tha...

Incrementality is the portion of revenue that would not have occurred without a specific marketing action. It measures causation, not correl...

The incrementality curve visualizes the relationship between spend volume and incremental revenue. It is typically non-linear: starting stee...

Incrementality-based measurement is the gold standard of marketing analytics. It credits marketing only for the *lift* it generates above th...

Marginal returns represent the revenue generated by the *next* unit of spend in a channel. Unlike average ROAS, which looks at the total pil...

Marginal ROAS represents the return on investment for the *last* dollar spent. Unlike Average ROAS (total revenue / total spend), Marginal R...

Marketing Budget Governance is the set of rules, approvals, and audits that control how marketing money is deployed. It moves marketing from...

Marketing Cash Efficiency (MCE) measures how much 'Cash Flow' is generated for every dollar of marketing spend, adjusted for payment terms a...

Marketing Mix Modeling (MMM) is a statistical approach that estimates the impact of different marketing channels on total revenue using aggr...

Marketing Payback Period is the number of months it takes for a new customer's cumulative contribution margin to equal the cost to acquire t...

The Marketing ROI Fallacy is the mistaken belief that maximizing ROI should be the primary goal of marketing. In reality, maximizing ROI inh...

The optimal media mix is the specific allocation of budget across channels that maximizes total revenue for a given total spend level. It is...

Platform bias arises because advertising platforms (Meta, Google) measure success using self-reported attribution models that systematically...

Platform self-attribution is the practice where ad networks (Facebook, Google, TikTok) grade their own homework. They use generous lookback ...

Portfolio Optimization applies Modern Portfolio Theory (MPT) to marketing. Instead of stocks and bonds, you have Brand Search (Low Risk, Low...

Portfolio-Level ROI measures the return of the entire marketing investment as a single asset class. It focuses on the holistic relationship ...

Profit-Adjusted ROAS (paROAS) is the Return on Ad Spend calculated using Contribution Margin rather than Gross Revenue. It tells you how muc...

ROAD measures the return of the marketing portfolio after applying SpendSignal’s recommended budget reallocations. It is a CFO-grade metric ...

Spend Accountability assigns specific ownership of P&L results to individuals. It answers the question: 'Who is responsible if this campaign...

Spend elasticity measures the responsiveness of revenue to changes in marketing spend. If elasticity is high (>1.0), doubling spend more tha...

True ROAS is a synonym for Incremental ROAS (iROAS). It represents the actual revenue generated by a channel that would not have occurred ot...

Unattributed revenue is revenue that cannot be assigned to a specific paid channel through attribution systems. In SpendSignal, this revenue...

Vanity Metrics are data points that make you look good but do not help you make decisions. Examples: Clicks, Impressions, Likes, Total Reven...