Performance vocabulary on TikTok Shop borrows from both classic commerce and digital advertising. Knowing how to tell these metrics apart, and which one to look at depending on the question at hand, avoids many decisions made on shaky ground.
GMV measures volume, not profitability
GMV, gross merchandise value, shows how much sales flow through the storefront, before costs. It is a good indicator of traction and growth, but says nothing about the real profitability behind that growth. A brand can see GMV double while eroding margin if that growth is funded through coupons or high commissions.
ROAS evaluates direct ad efficiency
ROAS, return on ad spend, compares the revenue generated by a campaign to its cost. It is the most immediate metric to judge a TikTok Shop Ads campaign, but it ignores production, logistics and affiliate commission costs, which can paint an overly optimistic picture of real profitability.
ROI accounts for all costs
ROI, return on investment, factors in every cost incurred, ad budget, commissions paid, creative production cost, to assess whether the overall effort was profitable. It is the most reliable metric for arbitrating between levers, live shopping, affiliation, ads, over a given period.
Conversion rate reveals traffic quality
A high volume of views or clicks guarantees nothing if the conversion rate stays low. Tracking this rate by creator and by content type quickly identifies the most qualified traffic sources, rather than judging performance on audience volume alone.
- GMV: sales volume, with no profitability read
- ROAS: the direct efficiency of an ad campaign
- ROI: overall profitability once all costs are factored in
- Conversion rate: the real quality of the traffic generated
Our monthly reports track all four metrics for every brand we support. See what that would look like for yours.