Programmatic ads enable media buyers to purchase advertising space using a programmatic platform that leverages data insights and algorithms to reach the right users. This form of digital advertising is scalable, flexible, transparent, and it drives results!
If you’re new in the adtech space, you may be coming across unfamiliar programmatic terms. Understanding these terms is an important first step toward programmatic advertising success, and so we’ve put together this programmatic key terms glossary to guide you.
Below, we’re explaining 47 of the most common, need-to-know programmatic advertising terms.
Programmatic Advertising Glossary
1. Ad Exchange
An ad exchange is a digital marketplace for advertisers, who are looking to run ads, and publishers, who are looking to buy and sell ad space (known as inventory). Publishers can offer their inventory for sale in an ad exchange, and advertisers can bid on that inventory.
2. 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.
3. 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.
4. Ad Server
Ad servers are the technology that makes it possible for advertisers and publishers to manage, serve, and track ads across different advertising channels, like native, display, video, etc. It’s the ad servers that decide, in real-time, which ad to deliver to the advertising channel based on its relevance, targeting, budget, and campaign goals.
5. 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.
6. Behavioural Targeting
Behavioural targeting uses web user information like browsing history to figure out which ads will resonate the best with them. Ads are personalized using behavioural data like which websites a person has visited, or which emails they have opened.
7. 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.
8. Brand Lift Study
A brand lift study measures the impact of digital campaigns across programmatic channels. It typically will provide a picture of the consumer sentiment and brand affinity of people who have been exposed to the ads.
9. 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 vegan company’s ad being shown on a hunting equipment website would be a brand safety concern.
10. Click-Through Conversion (CTC)
Click-through conversions (CTC) measure the amount of times a user sees an ad, clicks on it, and converts during that visit. CTC usually records first-time clickers, and so it’s useful for tracking conversions that happen right away, without nurturing.
11. Click-Through Rate (CTR)
A click-through rate (CTR) is 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.
12. Connected TV (CTV)
A connected TV 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.
13. Contextual Advertising
Contextual advertising is 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.
15. Cookieless Advertising
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.
16. Cost Per Acquisition (CPA)
Cost per acquisition (CPA) is a digital marketing metric that measures the total cost of a defined goal, like a conversion. CPA is calculated by dividing the total campaign spend by the number of customers that were gained by that campaign.
17. Cost Per Click (CPC)
Cost per click (CPC) is a bidding model that figures out how much advertisers pay for each individual click on their digital ads. CPC is calculated by dividing total ad cost by the number of clicks received.
18. Cost Per Mille (CPM)
Cost per mille (CPM) refers to an impression-based bidding model, which is the cost per one thousand impressions—in other words, marketers pay a set price for every 1,000 impressions that an ad receives. “Mille” is the latin word for “thousand,” which is why cost per mille means cost per 1,000.
19. Cost Per Completed View (CPCV)
Cost per completed view (CPCV) is an ad pricing model where marketers pay a publisher every time their video is watched from start to finish. This helps marketers target high-quality users. CPCV is calculated by dividing the budget of an ad campaign by the total completed views.
20. Cross-device targeting
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.
21. Data Management Platform (DMP)
A data management platform (DMP) collects and organizes 1st, 2nd, and 3rd-party audience data from various online, offline, and mobile sources. That data is used to create detailed customer profiles. Customer profiles are profiles that describe shared characteristics about a specified group of customers. The DMP will then make the data anonymous, and share it with programmatic platforms like ad exchanges, demand-side platforms (DSPs), and supply-side platforms (SSPs).
Dayparting is a marketing strategy that can be used to deliver ads at the most optimized times. For example, a marketer might use dayparting to only run ads on weekdays between 5pm to 9pm and Saturdays 12pm to 6pm because they notice that’s when their ads earn the most engagement. Dayparting makes it possible to schedule ads for specific days of the week, at specific times.
23. Demand-Side Platform (DSP)
A demand-side platform (DSP) makes it possible for advertisers to buy and manage ad space from multiple publishers, and across different advertising channels. DSPs make this process simple because it can all be done through one interface.
24. Digital Out-of-Home (DOOH)
Digital out-of-home (DOOH) includes any digital advertising that is found in a public environment. For example, large digital billboards, road-side dynamic displays, and directory screens in malls and airports. DOOH ads come in a variety of formats and sizes.
25. 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.
26. Dynamic Retargeting
Dynamic retargeting makes it possible for advertisers to serve ads to a user featuring the most recent product page they’ve visited. A native or display ad that shows the exact product that a user viewed online is served, or a custom messaging based on that product’s headline or body copy.
27. First-Party Data
First-party data (also written as 1st-party data) is information that an organization collects and owns about their own customers’ behaviours and actions. This information is collected on the organization’s channels like their website, app, social media, or other mediums where their audience engages with them.
28. 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.
Incrementality gives marketers insight into whether ads impact signups or purchases by using a test vs. control format. This format allows marketers to compare results from a group of people who were shown an ad, and a comparable control group that didn’t see the ad, giving them a picture of how they gained new customers.
30. 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.
31. 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.
32. 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.
33. Multi-Channel Advertising
Multi-channel advertising makes it possible for advertisers to reach users across different platforms and advertising channels. This promotes larger campaign reach because advertisers are able to reach users who are only using some channels.
34. 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.
35. Native Outstream Video
Native outstream video ads are placed between the paragraphs of an article on a website. The video ads only play when they are in view. If a user scrolls past the native outstream video, it will stop playing.
36. Private Marketplace (PMP)
A private marketplace (PMP) refers to a digital marketplace where advertising inventory is bought and sold programmatically between exclusive parties. Publishers invite a limited group of advertisers to bid on premium ad space.
37. Programmatic Advertising
Programmatic advertising is a process of buying advertising space that is automatic, rather than through the traditional, manual process. This automatic process serves ads to users at the right time, and at the right price.
38. 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.
39. Programmatic Direct
Programmatic direct, also known as programmatic guaranteed, is an agreement made directly between a publisher and an advertiser through a programmatic ad buying system like a demand-side platform (DSP).
40. Programmatic Video
Programmatic video describes any video ad that is delivered to viewers programmatically, including native video ads and CTV ads. Viewers may see a video ad ahead of streaming a TV series, or while scrolling through a blog.
41. Real-Time Bidding (RTB)
Real-time bidding (RTB) is a process that enables digital advertising inventory to be bought and sold. It’s typically facilitated by a programmatic platform, DSP, or an ad exchange, and the process happens in an instant auction that takes less than a second.
Retargeting is a digital advertising strategy that enables advertisers to re-engage a user that 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.
43. Supply-Side Platform (SSP)
A supply-side platform (SSP) is an adtech platform that publishers use to manage, sell, and optimize their programmatic ad inventory. It enables this inventory to be sold to advertisers in an automated, efficient way.
44. Third-Party Data
Third-party data (also written as 3rd-party data) is information that’s collected and sold by independent organizations. It’s made available to marketers to use as part of their advertising initiatives.
Viewability is a digital advertising metric that measures how many impressions of an ad were actually viewed. According to the Interactive Advertising Bureau (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.”
46. View-Through Conversion (VTC)
A view-through conversion (VTC) happens when a user is served an ad for the first time, doesn’t click on the ad, but converts at a later time. View-through conversions are tracked using a view-through conversion window, which starts as the first impression is served and continues until there is a conversion within a certain number of days.
47. 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.