If you’re jumping into programmatic advertising—that is, turning over your digital ad buys to software—it’s time to learn your SSPs from your DMPs. Don’t worry—we’ve got you covered with this easy-breezy glossary about the programmatic world. Once you’ve got a good grasp of the language, be sure to learn how programmatic buying works on LinkedIn.
First, here are the four broad types of programmatic advertising:
- Preferred deal — A non-auction model with a fixed cost for delivery based on a desired metric (impressions, clicks, video views, etc.)
- Programmatic guaranteed/direct — A non-auction model with a fixed CPM and guaranteed inventory.
- Private marketplace/exchange — An auction model using real-time bidding and price floors. It’s open to groups of buyers only by invitation.
- Open exchange buy — An auction model based on real-time bidding and variable CPM, open to any buyer.
Now, onto the acronyms, terms, and phrases you will encounter in the programmatic world:
Impression — A digital ad called from its source and counted once.
Inventory — Space a publisher makes available for advertising.
Network — Aggregators that package and sell inventories together at increased margins.
Server — A platform that stores and delivers digital ads to web browsers or mobile apps. It also provides performance data of those ads.
Tag — A snippet of web code that communicates with ad servers to make the correct digital ad appear on a webpage or in an app.
Blacklist — A list of IP addresses suspected to be either fraudulent or sources of spam and have been placed on an anti-spam database. There are open/public blacklist databases, but companies often keep their own private blacklists. Its opposite is a whitelist.
Bots — Also known as web robots, these software applications perform simple tasks on the Internet. While they have some constructive uses, they’re most often associated with fraudulent activities, such as mimicking a human's view of an ad.
Bot traffic — Otherwise known as non-human traffic, bot traffic consists of ad impressions made by robots rather than real people.
Brand safety — This technology ensures ads don’t appear in any context that might damage the brand image or reputation. With programmatic advertising, brands don’t always know where their ads will appear, so enacting a brand safety protocol should limit exposure to publishers whose content doesn’t fit with your brand.
Cookie sync or match — The process of linking the user identifier (the cookie ID) from one technology to another. It helps advertisers better target people and bid to reach them.
CPA — Cost per action is the average cost of a single user action or conversion during a marketing campaign.
CPM — Cost per thousand (M is the Roman numeral for 1,000). In the digital ad world, this is most often applied to the cost advertisers pay for impressions, though it can also be attached to clicks, video views, or other audience metrics.
DMP — Data management platforms allow agencies, publishers, and marketers to manage and merge a variety of data to break audiences into segments for improved targeting.
DCO — Dynamic creative optimization allows marketers to create multiple versions of the same ad from a single ad tag. This helps funnel the most relevant ads to individual users.
Deal ID — A unique number assigned to an automated ad buy that allows the buyer and seller to identify one another.
DSP — Demand-side platforms enable advertisers and agencies to automate the purchase of display, video, mobile, and search ads. A DSP assesses the attributes of every single ad impression and can assign a bid based on those attributes. By removing rate negotiation and manual ad insertion orders, this speeds the purchase of targeted advertising across a wide variety of publishers and platforms.
Exchanges — Auction-based, often highly automated digital marketplaces of display, video, and mobile inventory. These are open to advertisers, publishers, ad networks, demand-side platforms, and sell-side platforms.
First-party data — First-party data about visitor behavior collected directly by digital publishers. This type of information, such as subscription and social media data, is often more accurate—and seen as more valuable—than data coming from external sources.
Long-tail ad inventory — This is aggregated inventory from less popular or well-known publishers. Programmatic enables advertisers to combine disparate sources of long-tail inventory to target niche audiences.
Programmatic A/B testing — The automated testing of different versions of an ad to determine the highest performers and to remove ineffective versions.
Price floor — The lowest price a seller will accept for impressions.
RTB — Real-time bidding enables the buying and selling of digital advertising through auctions in the fraction of the time it takes for a webpage to load. Auctions take place through media marketplaces such as ad exchanges, and the price is based on immediate demand.
Remnant inventory — A publisher’s non-premium inventory, usually sold at a discount by a third party through non-guaranteed programmatic buys.
Second-party data — This is first-party data owned by someone else, traded or shared by mutual agreement.
Second price auction — The winner of an ad impression pays just one cent more than the next highest bidder. This limits the risk of overpaying for impressions and maintains efficiency in programmatic.
SSP — A supply-side platform is software enabling publishers to automatically sell display, video and mobile ad impressions, maximizing the prices they can charge for these. SSPs allow publishers to access large pools of potential buyers—ad exchanges, networks, and DSPs—in real time, and to set a price floor.
Targeting — This serves relevant advertising based on various criteria. There are different types of targeting: Behavioral (users), contextual (web content), demographic (age, gender, etc.) and geographic, among other criteria.
Third-party data — Information aggregated from platforms and websites owned by third parties. It comes from a wide variety of sources, such as surveys and panels, cookie-based tracking, opt-in digital tracking, public records, registration data, and offline transactions such as loyalty programs.
Trading desk — These perform digital media trading as a managed service and are seen as experts in data and technology. Those not owned by large agency holding groups are known as independent trading desks.
Viewability — A metric that tracks whether users can actually see the ads. For example, some ads might record impressions even though a user didn’t scroll to that part of a webpage.
Whitelist — A database of approved websites where an advertiser is happy for its ads to appear. It's the opposite of a blacklist.
Win rate — A ratio measuring the effectiveness of bid strategy. It’s calculated by dividing the total number of impressions by the total number of bids submitted.
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