In the world of digital advertising, it’s important to keep up with the industry’s specialized terms. Programmatic advertising is a popular choice among agencies and advertisers due to its efficiency, wide coverage, and ability to grow. Programmatic advertising involves automated platforms where buyers (advertisers) and sellers (publishers) engage in transactions. Although the concept is simple, countless terms and acronyms are associated with it. To clarify these terms, Luna Media has created a glossary that explains them in a clear and understandable way.
Ad Exchange: An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, often through real-time auctions. They are similar to stock exchanges but for ad space. Ad exchanges connect SSPs and DSPs, facilitating a vast range of inventory and audience targeting.
Ad Fraud: Ad fraud is also known as click fraud. It’s when a scammer tries to inflate the amount of impressions, clicks, or conversions that an ad campaign earns. This wastes the advertiser’s budget and earns money for the scammer. Bots are usually used for this type of fraud.
Ad Inventory: Ad inventory is also known as media inventory. It’s the amount of ad space that a publisher, like a website, has available to sell to an advertiser.
Ad Network: Aggregates inventory from different publishers for sale, an example is Google AdWords.
Ad Server: A platform that distributes ads to end-devices (ie. your phone) and tracks performance metrics.
Ads.txt: Stands for “Authorised Digital Sellers”, and is a txt file in which a publisher records who can sell inventory on the site. This text file is integrated into programmatic platforms and provides buyers and combating ad fraud.
Agency Trading Desk: A trading system developed by large agency holding companies to make programmatic purchasing more efficient for their customers. Agency Trading Desks usually access several DSPs and so have a larger inventory and data streams.
Application Programming Interface (API): APIs enable connection to external applications, facilitating data transfer from multiple platforms to a unified dashboard.
Audience Targeting: Audience targeting separates consumers into segments that are based on their interests or demographic data. This makes it easier for advertisers to reach receptive audiences. Examples of audience targeting include affinity segments and custom segments.
Automated Guaranteed: An automated transaction where an advertiser buys placements at a fixed price over a fixed period of time. This can be compared to traditional non-programmatic media buying.
Banner ads: Banner ads are advertisements that are usually displayed at the top or side of a web page. They typically contain some form of multimedia to grab users’ attention and entice them to click on your ad, like images.
Behavioral Targeting: Behavioral targeting uses web user information like browsing history to figure out which ads will resonate the best with them. Ads are personalized using behavioral data like which websites a person has visited, or which emails they have opened.
Bid: A bid is the amount of money an advertiser places in a PPC auction for a keyword to help secure an ad placement for a top spot in the search results.
Bid Request and Response: A bid request is a piece of code that sends ad inventory details to the ad exchange. This way, advertisers can see what ad space is available for their ads. If an advertiser is interested in using that inventory, they can send back a bid response.
Brand Safety: Brand safety is a strategy or practice that helps advertisers avoid ad placements in contexts that could potentially hurt their brand identity or reputation. For example, a smoking company’s ad is shown on a parenting website.
Click-Through Conversion (CTC): Measure the number of times a user sees an ad, clicks on it, and converts during that visit. CTC usually records first-time clickers, so it’s useful for tracking conversions that happen right away.
Click-Through Rate (CTR): A digital advertising metric that uses a ratio to show how often users who see an ad end up clicking it. CTR is the number of clicks that an ad receives, divided by the number of times that the ad is shown.
Connected TV (CTV): A CTV is a device that connects to (or is built into) a television, making it possible for that device to stream video content. CTV advertising delivers ads through those devices to viewers watching streamed content.
Contextual Advertising: a targeting method that leverages the context next to which an ad appears on the web to deliver highly relevant ads to the right audience, at the right moment.
Conversion rate: Conversion rate is a metric that enables you to view how many users who saw your ad followed through with your CTA compared to the number of users who didn’t.
Cookie: a small piece of data sent from a website and stored on the user’s computer by the web browser. This small, unique identifier makes it possible for a website to remember a visitor and their actions as they browse through different pages. Cookies enable marketers to deliver personalized content to web users.
Cookieless Advertising: uses metadata like keywords and website content to place digital ads based on the environment in which an ad appears. Ads are served to users based on the content they are consuming at that moment in time.
Cost Per Action (CPA): Average cost of previously defined action (like conversion).
Cost Per Click (CPC): Average cost per ad click and an alternative to CPM.
Cost Per Mille (CPM): Price for 1,000 ad impressions or displayed ads.
Cost Per View (CPV): The cost for one video play when a pre-defined minimum viewing time is reached.
Cross-device targeting: makes it possible for advertisers to deliver ads to a specific audience, across multiple devices. Ads can be shown on different devices, like a smartphone, smart TV, and a computer.
Data Management Platform (DMP): DMPs collect and manage data from various sources, including first-party data (from within an organization) and third-party data (from outside sources). This data is used to create audience segments, which are then targeted with specific ads, enhancing the relevance and effectiveness of ad campaigns.
Deal ID: Contains the special terms for a deal.
Demand-Side Platform (DSP): A DSP allows advertisers and agencies to automate the purchase of display, video, mobile, and search ads. It facilitates the management of multiple ad exchange and data exchange accounts through a single interface. DSPs optimize bidding, targeting, and real-time ad placement across numerous networks.
Digital Out-of-Home (DOOH): DOOH includes any digital advertising that is found in a public environment. For example, large digital billboards, roadside dynamic displays, and directory screens in malls and airports. DOOH ads come in a variety of formats and sizes.
Display Advertising: Display ads are digital advertising media that use images and text, and can be interactive. These ads appear on websites and vary in shape and size to fit in different locations on a web page, including within the content.
First-Party Data: First-party data is information collected directly from your audience or customers. This includes data from behaviors, actions, or interests demonstrated across your website or app. It is the most valuable kind of data as it is collected from your core audience.
First Price Auction: The winning bidder pays the price offered for the ad impression.
Floor Price: The floor price is the minimum or lowest amount you are willing to sell your ad inventory for. Floor price can dictate how much digital ads the minimum cost of digital ads through an ad exchange or supply-side platform (SSP).
Frequency Capping: Frequency capping, or impression capping, makes it possible for marketers to limit the number of times an ad is shown to individual people. This helps marketers avoid overwhelming their audience with the same ad repeatedly.
Header Bidding: Allows publishers to bypass the traditional waterfall method, where demand partners/SSPs are called in a predetermined order. Instead, Header Bidding allows publishers to host unified auctions where all demand partners compete simultaneously in real-time. You can read more about in-app header bidding here.
Impressions: Impressions count the number of times a user sees your advertisement, even if that user views your ad multiple times.
In-Game Advertising: In-game ads are non-intrusive ads that appear in video games. Ads appear during gameplay on in-game objects, such as billboards, walls, jerseys, and more. In-game ads can be delivered through programmatic advertising on gaming consoles, mobile devices, or on computers.
In-Stream Video: In-stream video is a classic video advertising format in which a video ad is played before, during, or after a video that a person is already watching. Since the viewer is already watching content, they are receptive to the video ad.
Linear TV: Linear TV enables audiences to watch scheduled TV programs, broadcasted through a traditional television network. Viewers access the content through a subscription to a cable or satellite service, or by over-the-air broadcasting.
Native Advertising: Native advertising integrates high-quality advertising content into the organic experience of a platform. Native ads fit into the design and feel of the websites where they are shown, which creates an immersive user experience for the viewer.
Native DSP: Specialized DSPs for Native Advertising. On the other hand, traditional DSPs were mostly developed for display ads or videos. Native DSPs can optimize for post-click engagement.
Open Auction: A publisher lets all bidders have access to their inventory. The highest bidder wins the impression.
Post-Click Engagement: Measures user engagement to optimize campaigns.
Pre-Bid Targeting: Targets specific inventory types, usually visible, fraud-proof, brand-safe, or contextually relevant inventory, before bidding.
Preferred Deal/Unreserved Fixed Rate: Deal type in PMPs where there is a predefined price.
Private Auction: Deal type in PMPs where only select advertisers can bid on inventory.
Private Marketplace (PMP): Higher-value ad groups that are grouped together by a publisher or SSP and are not available in an open auction. Only selected advertisers can bid on these placements. Subdivided into Preferred Deal, Private Auction, and Automated Guaranteed.
Programmatic Advertising: Programmatic Advertising refers to the automated buying and selling of online advertising. This process uses AI and real-time bidding (RTB) for inventory across mobile, display, video, and social channels. It’s efficient and streamlines the ad-buying process through automation and targeting.
Programmatic Audio: Programmatic audio automates the selling and insertion of audio ads into audio content. Audio ads are delivered to listeners through various platforms, including audiobooks, podcasts, and streaming playlists.
Programmatic Direct: Direct transactions between publishers and advertisers that take place in the programmatic ad buying system.
Real-Time Bidding (RTB): RTB is a digital ad buying process that allows advertisers to bid on ad inventory in real-time. This method ensures more precise targeting and efficient use of advertising budgets. The process takes place within milliseconds, as a user loads a webpage or an app.
Retargeting: Retargeting is a digital advertising strategy that enables advertisers to re-engage a user who has shown interest in their brand or product. Retargeting ads are delivered to a user based on their previous intent-based actions on the web.
Return on ad spend (ROAS): ROAS refers to how much money you earn in comparison to how much you spend on your advertisements.
Second-Party Data: Purchased first-party data or via a DMP.
Second Price Auction: The winning bid pays one cent more than the next highest bid.
Supply-Side Platform (SSP): An SSP is a technology platform that enables publishers to manage their advertising space inventory, fill it with ads, and receive revenue. SSPs are designed to maximize the prices their inventory fetches by connecting to multiple ad exchanges and demand-side platforms, ensuring wide exposure and competitive pricing.
Tech Tax: Costs associated with programmatic booking technology.
Third-Party Data: Third-party data is information that’s collected by an entity that doesn’t have a direct relationship with the user the data is collected from. This type of data is purchased from external sources and used to augment a company’s existing data sets for broader audience targeting.
Video Ad-Serving Template (VAST): A uniform template to structure tags and metadata transferred from an ad server to a video player. Standardizes video ad delivery to compatible players.
Video Completion Rate (VCR): Video completion rate (VCR) is a video marketing metric that measures how many viewers watched a video ad from start to finish. This rate helps advertisers figure out whether or not their audience is finding the content they’ve produced engaging.
Viewability: Viewability is a digital advertising metric that measures how many impressions of an ad were actually viewed. According to the IAB, at least 50% of an ad must be in view for at least one second for display ads and two seconds for video ads for them to count as being “viewed.”
