It is the fundamental cost of providing liquidity. Nobody trades with your resting order because they want to do you a favour; they trade because at that moment your price is the attractive one.
It is measured by looking at where the price sits shortly after your fills. A passive strategy with a good spread capture and terrible one-second markouts is not earning the spread — it is renting it out to informed traders.
Example: 10,000 passive buys at an average of 30.00 with a quoted spread of 4 cents implies $200 of theoretical capture. If the midpoint one second after each fill averages 29.985, the realised markout is negative 1.5 cents, or negative $150 — the spread plus more, handed to better-informed counterparties.
Related: toxic-flow, resting-order, queue-position, realised-spread