Countermove Academy · 85 terms
Glossary
Every term the lessons use, in plain English, with the formula where one helps and a link to the lesson that teaches it.
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- 60:40 split
Binet and Field's average across IPA cases: about 60% of media on brand building and 40% on activation. A benchmark, not a rule.
A
- A&P also advertising and promotion
Advertising and promotion: the media and content budget, usually shown as a share of net sales. Trade spend on deals sits elsewhere, in gross-to-net.
- Activation also sales activation, performance marketing
Media that sells to people ready to buy now, such as offers, search and retail media. Its effect is large in the weeks it runs and fades fast.
- Adstock also carry-over
The part of an ad's effect that is still selling in later weeks or quarters. Activation's fades within weeks; brand media's lasts quarters.
- Attribution also last-click attribution
Giving credit for a sale to the ads a buyer saw or clicked. Click-based attribution credits the last ad clicked and misses TV and posters.
- Average return
Total return from a channel divided by total spend on it. It can look healthy while the last euros lose money.
B
- Baseline also baseline sales
What would have sold in the same weeks without a promotion or campaign. Lift and incremental sales are measured against it.
Lesson 25: How to evaluate a promotion: lift against a baseline
- Brand building also brand media
Media that works slowly through memory and lasts, reaching people who are not buying yet. It lowers price sensitivity over time.
- Branding (of an ad)
How well people who remember an ad can name the brand it was for. Weakly branded ads partly build memory for the category leader.
- Break-even (return on spend)
€1 of gross profit back for each €1 spent: the spend just pays for itself. As an ROI, break-even is 0%.
- Break-even volume
How much volume a price rise can lose before gross profit falls, or a price cut must gain before it rises.
Formula: Old gross profit per unit ÷ new gross profit per unit − 1
- Business case
A request for money now against the extra cash a project should earn later, judged on payback and net present value.
C
- Category also market
The set of products shoppers choose between, such as soft drinks. Market share only means something once the category, channels and period are defined.
Lesson 24: How to calculate market share, with a worked example
- Channel stuffing
Repeatedly loading retailers with more stock than shoppers buy to hit sales targets. Regulators treat it as misleading.
- Consensus also consensus forecast, beat and miss
The profit analysts expect for a quarter. Results above it are a beat, below it a miss, and the share price reacts to the gap.
- Cost of goods also COGS
What it costs to make and deliver the units sold. Net sales minus cost of goods is gross profit.
- Creative quality
How much a campaign gets out of each euro of media: whether people notice it, know which brand it was for, feel something and are given a reason to buy.
- Credible range
In a Bayesian model, the range the true value probably sits in. If a channel's range crosses break-even, the model cannot yet say it pays back.
D
- Deal elasticity
How much volume responds to a temporary deal. It is several times larger than the response to the same cut in the shelf price.
- Deseasonalised sales also seasonally adjusted sales, deseasonalized sales
Sales divided by the period's seasonal index, so quarters can be compared with each other. What is left is the trend plus whatever you and your rivals did.
Formula: Actual sales ÷ seasonal index
Lesson 28: Seasonality in sales: the seasonal index, with a worked example
- Digital shelf
How a brand is found and chosen online: its rank in a retailer's search, its star rating and reviews, and its product page.
- Diminishing returns also saturation
Each extra euro in a channel adds less than the one before, because later euros mostly reach people already reached.
- Dirichlet model
A model of how shoppers spread their purchases across brands. It turns a brand's share into how many people buy it and how often.
- Distinctive brand assets
Colours, characters, sounds and shapes people link to one brand. Used consistently, they make every ad easier to credit to it.
- Double jeopardy
Small brands have fewer buyers, and those buyers buy them slightly less often. The gap between brands is mostly in how many people buy.
E
- EBITDA
Earnings before interest, tax, depreciation and amortisation: gross profit less media and overheads.
- Excess share of voice also ESOV
Share of voice minus share of market, in points. Positive ESOV tends to grow share, about half a point a year per 10 points on Binet and Field's average.
Formula: Share of voice − share of market
F
- Flaw of averages
A plan built on average assumptions does not deliver the average result, above all when results are lopsided or there is a target to clear. Sam Savage's term.
G
- Gross profit
Net sales minus cost of goods: the money every other cost is paid from. Return on marketing is best measured in it.
Formula: Net sales − cost of goods
- Gross sales
Shipments to retailers at list price, before any trade spend comes off.
- Gross-to-net
The walk from gross sales at list price to net sales, after trading terms, deal funding, loading discounts and listing fees.
H
- Habitual buyers also loyal buyers
Shoppers who mostly buy the brand they know. They react weakly to price and hardly to deals, which is why share moves slowly.
- Hill curve
A saturation curve used in mix models: response rises with spend and flattens, so double the spend never means double the sales.
I
- Incremental sales
Sales a promotion or campaign caused: what sold minus what would have sold anyway.
Formula: Actual sales − baseline
Lesson 25: How to evaluate a promotion: lift against a baseline
- Incrementality
The sales or profit a lever adds compared with not using it. The honest test is the same period with the lever switched off: a holdout or geo test, or in Countermove a re-run without it.
Formula: Result with the lever − result without it
L
- Lift also sales lift, deal lift
The extra volume while a promotion or campaign runs, as a percentage of the baseline.
Formula: Actual sales ÷ baseline − 1
- Lift test
An experiment: switch a channel off in some regions for a while and compare their sales with the rest. It measures the channel's effect directly.
M
- Marginal return
What the next euro of spend returns. Budget decisions change the next euro, so this is the return that counts.
- Marketing mix model also MMM, media mix model
A regression of weekly sales on media, price, deals and outside factors such as season, with carry-over and saturation for each channel.
- Marketing ROI also ROMI, return on marketing investment
The extra gross profit a campaign earned minus what it cost, divided by what it cost. Break-even is 0%.
Formula: (Incremental gross profit − spend) ÷ spend
Lesson 26: Marketing ROI formula: ROI, ROAS and gross profit
- Mental availability
How likely category buyers are to think of your brand when they are about to buy. Brand media builds it slowly, and it fades slowly.
- Monte Carlo simulation also many worlds
Running the same plan many times while the uncertain parts vary, so the results form a range: its middle, its spread and the odds of hitting a target.
N
- Net income
Profit after every cost, interest and tax: the bottom line investors value the company on.
- Net present value also NPV
The extra cash a project brings over the years, each year discounted at the cost of capital, less what it costs. Above zero, it earns more than that rate.
Formula: Discounted extra cash − investment
- Net sales
What the company books as revenue: shipments at list price minus trade spend.
Formula: Gross sales − trade spend
- Numeric distribution
The share of stores that stock you, every store counted the same. Thousands of small shops can add many points of it and very little of the money.
Formula: Stores stocking you ÷ all stores
P
- P/E multiple also price/earnings ratio, earnings multiple
The share price divided by a year's earnings per share: what investors pay for each euro of profit. Faster growth raises it; higher interest rates lower it.
Formula: Share price ÷ earnings per share
- Pantry loading also stockpiling, pull-forward
Shoppers buying ahead on deal and buying less afterwards, which causes the post-deal dip.
- Payback
How long spend takes to return €1 of gross profit for each €1. Activation pays back fast and stops; brand media starts low and keeps adding.
- Payback period
How long a project's extra cash takes to repay what went in. Simple, but it ignores what comes after payback and the time value of money.
Formula: Money committed ÷ extra cash per year
- Penetration
The share of people who buy your brand at least once in a period. Brands grow mainly by adding buyers.
Formula: Buyers ÷ adults
- Physical availability
How easy the brand is to find and buy: on shelf, online and in AI assistants' answers.
- Post-deal dip
The shortfall in sales after a promotion, as shoppers use up what they stocked. Take it off the lift before judging the deal.
- Pre-testing
Testing an ad with a sample of people before it airs. It gives a noisy read and the chance to scrap a weak ad.
- Price elasticity
The percentage change in volume for a 1% change in price. At −1.5, a 1% price rise loses about 1.5% of volume.
Formula: % change in volume ÷ % change in price
- Price index
Your regular shelf price against the market average, where 100 is parity.
Formula: Your price ÷ market average × 100
Lesson 24: How to calculate market share, with a worked example
- Price war
Rivals cutting in turn to answer each other's cuts, until all have lower prices and much the same shares.
- Prior
What earlier studies say about a value before your own data is fitted. With little data the prior steers the estimate; with a lot, your data wins.
- Purchase frequency
How often each buyer of the brand buys it in a period. It barely moves with brand size.
Formula: Purchases ÷ buyers
R
- Rate of sale
How fast a product sells where it is stocked, which separates being on shelf from being chosen. Countermove shows it in the Situation Room.
Formula: Units ÷ weighted distribution
Used in the game
- Relative price
Your average price against the category's. Above 1, shoppers pay you a premium.
Formula: Value share ÷ volume share
Lesson 24: How to calculate market share, with a worked example
- Response curve
Return plotted against spend for one channel. It flattens as the channel saturates; the best spend is where the next euro returns exactly €1.
- Retail media also sponsored search
Advertising sold by retailers, such as sponsored results in their own search. It buys position straight away, with diminishing returns, and the position goes when the spend stops.
- Retailer stock weeks
How many weeks of sales retailers hold. Four to five is normal; more means stock was pushed in and orders will fall.
Formula: Retailer stock ÷ weekly sell-out
- Return on spend
Gross profit earned per €1 spent. Below €1 the spend loses money; above €1 it pays back.
Formula: Incremental gross profit ÷ spend
- ROAS also return on ad spend
Incremental revenue divided by ad spend. It leaves out the cost of goods, so a ROAS above 1 can still lose money.
Formula: Incremental revenue ÷ spend
Lesson 26: Marketing ROI formula: ROI, ROAS and gross profit
S
- Seasonal baseline
What would have sold in a period with nothing changed, season included. Judge a campaign or deal against it, not against the period before, or the season's rise or fall counts as the move's.
Lesson 28: Seasonality in sales: the seasonal index, with a worked example
- Seasonal index also seasonal factor, seasonality index
How much a quarter or month sells against an average one, because of the time of year alone. 1.10 means 10% above an average quarter; the indices average 1.
Formula: Period's average sales ÷ average of all periods
Lesson 28: Seasonality in sales: the seasonal index, with a worked example
- Sell-in
What you ship to retailers. Revenue is booked on it.
- Sell-out
What shoppers buy from retailers, as retail audits measure it. The truest read of demand.
- Share points also percentage points
The unit for a change in share: 20% to 22% is up 2 points, which is a 10% rise in share. Say which one you mean.
Lesson 24: How to calculate market share, with a worked example
- State dependence
Having bought a brand makes buying it again more likely: habit, which carries part of each change in share into later quarters.
- Switchers
Shoppers who react to price, deals and ads, and move between brands. Most deal money still goes to loyal buyers who would have bought anyway.
T
- Trade loading
Pushing extra stock into retailers, usually with a discount, so shipments run ahead of what shoppers buy. Later orders fall.
- Trade spend
What you pay retailers to sell your product: trading terms, deal funding, loading discounts and listing fees. It comes off gross sales.
Formula: Gross sales − net sales
V
W
- War gaming also competitive war game
Playing out a move against rivals who answer by their own goals and habits, to see how they are likely to respond. Done on a model, it gives the odds of each answer rather than one guess.
- Wear-out
An ad losing effect with repetition. Weak and rational ads wear out faster than strong, emotional ones.
- Weighted distribution also ACV distribution
The share of category sales made in stores that stock you. Big stores count more, and sales follow it rather than the store count.
Formula: Category sales in your stores ÷ all category sales