No matter how clever or creative an ad might be, placement is the key to making sure it’s seen by the intended audience. In the modern world of online advertising, programmatic advertising is the preferred way for advertisers to find the ad space that’s most likely to reach their target audience and buy it at the best price.
As a publisher, you own the ad space that advertisers need – so understanding programmatic can help you maximize your revenue from that valuable real estate. On the surface, the programmatic ad process is relatively simple:
- The publisher puts ad space on their website or app up for auction.
- Advertisers bid on the available ad space based on audience information.
- The highest bidder wins, and the winner’s ad is served to site visitors.
- The publisher receives payment based on the terms of the deal.
This entire process happens instantly and automatically – simple, right? The problem is, there’s a lot of complexity going on behind the scenes. As a result, the programmatic ecosystem includes a multitude of complex terms, jargon, and acronyms you need to understand before you can navigate it effectively – and they’re constantly changing.
To help you sort out the “alphabet soup” of programmatic, we’ve compiled this glossary of the most important terms and concepts.
Want to keep it handy? Download our PDF or bookmark this page so you can reference the glossary whenever you need a refresher.
A Programmatic Glossary for Publishers
Ad exchange: A computerized marketplace where supply side platforms (SSPs) and demand side platforms (DMPs) connect to buy and sell ad space.
Ad inventory: The ad space a publisher makes available on their website.
Ad network: The “middleman” in a programmatic transaction that bundles inventory from different publishers and offers it for sale to advertisers (for example, Google AdSense).
Ad unit: An individual advertising block used as a placeholder to demonstrate the size and placement of an ad within a website or app.
Advertiser: The buyer in a programmatic transaction; typically a company that wants to advertise on a publishers’ website or app.
Audience: The visitors to your website or app; these are the people an advertiser wants to reach.
CTR (click-through rate): A performance metric that shows how often a user clicks on an ad.
Conversion: A pre-determined action that the advertiser defines as a successful audience interaction (e.g., visiting a website, downloading an asset, signing up for membership, etc.).
CPC (cost per click): A method of pricing ads where payment is made every time a user clicks on an ad, without regard to the number of impressions.
CPE (cost per engagement): A method of pricing ads where payment is made when a user engages with the ad.
CPM (cost per mille): A method of pricing ads based on each 1,000 ad impressions.
Creative: The actual advertisement that a user will see when the ad is served.
Deal ID: A unique number assigned to each ad buy so publishers and advertisers can identify it.
DMP (data management platform): A system used by advertisers and publishers to collect, store, sort, and categorize user data; it allows publishers to gain insight on their audience and advertisers to optimize their buying strategies.
DSP (demand side platform): A platform that allows advertisers to identify the best inventory for reaching a target audience, automatically place bids, and gain insights into ad performance. DSPs are connected to SSPs via ad exchanges.
Engaged time: A measure of ad quality that considers both whether an ad is visible and whether a user is actively engaged on the page.
First look: An arrangement where certain advertisers are given priority access to a publisher’s ad inventory.
First-party data: Proprietary data you collect directly from users about their online behavior; this is the “gold standard” of user data in terms of accuracy and insights.
Frequency cap: A method of controlling how many times an ad will be served to an individual user.
Header bidding: An advanced programmatic technique where a publisher offers its inventory to multiple ad exchanges/SSPs simultaneously.
Impressions: The measure used to count the total number of times an ad is served/displayed.
Open auction: A marketplace where publishers offer their ad inventory to all bidders connected via the SSP, and the highest bidder wins the impression.
PMP (private marketplace): A marketplace where publishers offer higher-value ad inventory to a select group of buyers first, before the inventory goes to an open auction.
Price floor: The minimum price a publisher will accept for its ad inventory.
Publisher: The seller in a programmatic transaction; typically the owner of a website or app with advertising space to sell (i.e., YOU).
Recency cap: A method of controlling how much time must pass before an ad will be re-served to an individual user.
RTB (real-time biding): An automated process where a user’s information is sent to an ad exchange the moment they visit a page, triggering a real-time auction to win the ad slot.
Second-party data: Essentially someone else’s first-party data; it is typically purchased or shared through a partnership arrangement to supplement your own proprietary data.
SSP (supply-side platform): A platform that allows publishers to automate the sale of their ad inventory by connecting to DSPs and ad exchanges.
Viewability: Industry-standard measure of ad quality; a “viewable impression” is defined by the IAB as one where at least 50% of the ad’s area is displayed onscreen for at least one second.
Download our PDF or bookmark this page so you can reference the glossary whenever you need a refresher.
A word about cookies and third-party data…
In recent years, you’ve likely seen countless news stories about online data privacy and the coming elimination of third-party cookies. As a publisher, you may be wondering what this means for you.
We’ll explore this topic further in a future blog post, but for now, it’s important to understand that today’s advertisers rely heavily on cookies and third-party to develop their bid strategy for advertising. As third-party data becomes less readily available, publishers will need a strategy to communicate the value of their audience to advertisers.