Whether you work in the advertising industry, want to advertise for your brand or just gain a better understanding of digital advertising definitions and terms, you have come to the right place.
We have compiled a list of must-know advertising definitions, terminology and industry “lingo” to help anyone become well-versed in this complex space in no time.
An advertiser is a buyer of advertising inventory. Across the industry an advertiser is often referred to as “the demand side” or “the buy side”
A publisher is a seller of advertising inventory – this can include a website, app or even a content channel where the ads would be displayed. Publishers are also often referred to as “the supply side” or “the sell side”
Programmatic advertising is the process of automating the buying and selling of ad inventory in near real-time through an automated bidding system. Programmatic advertising enables brands or agencies to purchase ad impressions with publisher sites or apps through a complex ecosystem.
The programmatic advertising ecosystem consists of connecting core components including an ad exchange and bidder.
An ad exchange is a piece of technology that conducts real-time auctions for ad inventory. An ad exchange can be considered a virtual marketplace where advertisers can secure digital ad inventory across multiple publishers in real-time.
Supply-side Platforms (SSPs) all operate ad exchanges in addition to other technology tools for publishers.
In order to buy inventory across ad exchanges, buyers need access to an additional piece of technology to access or “bid” on inventory
A bidder is the piece of technology that enables the buying of publisher inventory on ad exchanges.
Demand-side platforms (DSPs) provide buyers with a platform which consists of a bidder in addition to other pieces of buy-side advertiser technology.
Real-Time Bidding (RTB)
When internet publishers sell inventory programmatically, they most commonly utilize a process known as real-time bidding (RTB). Real-time bidding is simply the process that takes place to have buyers bid within an auction to win an ad spot on a publisher’s site in “real-time.” For each available RTB impression, an ad exchange conducts an auction. The ad exchange sends a bid request, which is essentially a description of the impression, to multiple potential bidders.
Bidders evaluate the bid request to decide if it is a match for their campaign targeting criteria, and if so, also how much it is worth to the bidding advertiser. Bidders then send a bid response (a specific price) back to the ad exchange. The winning bidder is then awarded the ad impression by the ad exchange.
Private Marketplaces (PMPs)
In addition to bidding on ad inventory in an open exchange market, publishers are often willing to provide preferred access to inventory in exchange for commitments from buyers. In the traditional advertising world, these commitments were negotiated via insertion orders or media contracts. In the programmatic landscape, private marketplaces (PMPs) facilitate similar commitments in a more automated fashion.
Once publishers and advertisers agree on the terms of a private marketplace, the publisher’s ad exchange assigns a deal ID to the transaction. All qualifying bid requests are populated based on the parameters set for this deal ID, and the advertiser’s bidder targets this deal ID.
Private marketplaces do create some disruption to the typical “highest bid wins” model of programmatic transactions, but have come to be a preferred method for some buyers who want to ensure access to more transparent and premium inventory sources.
Third Party Ad Serving
Most enterprise marketers deliver digital impressions through a third party ad server. This third party ad server manages creative delivery across nearly all publishers on an advertiser’s media plan.
Third Party Ad Served
Third party ad serving centralizes creative management for advertisers, but requires standardized ad formats that are supported by all publishers.
Site served advertising is when the publisher is in full control of the way ads are rendered on their site properties. This enables publishers to implement custom ad formats that are tightly integrated with organic content.
In these cases, the publisher often loads an impression tracker from the advertiser’s ad server.
Header bidding is an advanced programmatic technique where a publisher can offer inventory to a variety of ad exchanges before making calls to their ad server. The concept is that by letting multiple demand buyers bid on the their inventory at the same time, the publisher increase their overall yield and earn more revenue.
Header bidding is generally considered a cleaner and better technology integration between ad tech companies and publishers. And ultimately, header bidding enables the publisher’s ad server to make an informed choice about which ad exchange will best monetize each available impression.
Viewability is the metric which is used to track ad impressions that were actually seen by a person.
There are three kinds of non-viewable impressions: ads that are out of view, ads that appear for a very short period of time, and ads served to non-human traffic. Advertisers and publishers can utilize viewability impression trackers to measure the success rate with which they serve viewable impressions.
For several advertiser, the most important goal for them is their return on investment (ROI). To do, these advertisers need to attribute their advertising to conversions for their campaign. By needing to track this across multiple supply sources, brands can use an advertiser ad servers as a common source of this attribution data.
Attribution systems require access to data sets that contain records of each consumer’s path to purchase. When a user converts, the attribution system can analyze the user’s prior ad exposure and make a judgment about which ads should be assigned credit for influencing the purchase.
There are multiple types of attribution models, including Last Click, Last View and Multi-Touch
Below is an example of where credit is given across the different attribution models –
We hope this information helped you gain a better understanding of some of the more common terms and practices used in programmatic advertising.