Programmatic advertising glossary – part 1

Programmatic definition

Simply speaking, programmatic advertising is an excellent way to help each publisher monetize their content and for each advertiser to reach the desired customer. In short, it is a huge ecosystem where ad inventory is bought and sold. An algorithm determines where ad budget is best spent, so there is no need for time-consuming face-to-face negotiations, direct inquiries, and bidding. What’s more, the programmatic systems analyze data and prepare best-targeted ads. It’s profitable for both parties, and it all happens within milliseconds – in the blink of an eye 🙂 !

As easy as ABC

Our list is in alphabetical order to make your journey through programmatic terms as simple as possible. The first part of the glossary starts with A and ends with L, whereas the second half begins with M and goes all the way up to Y. Hop right in and enjoy the ride!

A as Ads

In the world of programmatic, it’s actually all about the ads! Publishers want to get the highest price for displaying ads next to their content, and advertisers want to reach their potential clients while paying a reasonable price for it. There are several types of an ad; for instance, it can be a banner, a video, but it can also be native and responsive. Native ads blend well with website or app content, they are less intrusive than typical ads. On the other hand, responsive ads adjust automatically to the ad slot. To see different examples of ad formats we offer, visit our Ad Gallery.

B as Blank Ads

Blank ads or unfilled impressions are a problem you might encounter when monetizing your content. They are those odd empty spots you can sometimes see, for instance, on some websites. It doesn’t only look bad, it also often makes you earn less! Several factors can be causing them, including technical reasons such as the website’s connection timeout, or device oriented reasons like an activated ad blocker. To find out more about unfilled impressions, you can read our article “Why are blank ads showing and how to fix it”. Spoiler: we have a solution for that!

C as CMP, Cookies, and CPM

For sure, “cookies” sound tasty, but in the digital world, they are no more than small files sent to your browser by a website or app you visit. They were created to store information in a user’s web browser; and are, among others, necessary for geotargeting or determining whether a given user has already visited a page. Obviously, they also play a huge role in e-commerce sector, and are vastly used for remarketing purposes. What’s essential is that visitors from the EU must first agree to use their personal data in order to see well-targeted (served with programmatic) ads. Such permissions are given in CMPs – Consent Management Platforms, where users can check what kind of information will be collected.

Another term starting with a “C” is CPM. Although it might be tricky, don’t confuse it with the above-described CMP – it’s an entirely different story! CPM is a metric useful for advertisers that stands for Cost Per Mille (thousand). It shows the price for displaying a campaign a thousand times under established conditions. CPM is calculated by dividing a total cost of a campaign by total measured ad impressions and then multiplying it by 1000. A metric related to CPM is eCPM (effective Cost Per Mille). It’s more useful for digital content creators, because it shows how much a specific ad slot makes.

D as Density, Direct, and DSP

What’s interesting about digital ads is that “more” doesn’t always mean “better”. Too many ads can seriously harm the experience of your users. As the Better Ads Experience Program stated, ads density higher than 30% can cause a lot of damage to your relations with both users and advertisers. As in most cases, a good balance may be the key to achieving your monetization goals!

The same might be said regarding the type of deals when choosing a monetization method. For instance, it might be a good idea to cover part of your ad inventory with programmatic and another part with direct deals. But what exactly are direct deals? Simply speaking, they are agreements between an advertiser and a publisher, which are often set without involving exchange parties (or only with a slight use of these). All terms of the deal are pre-established, and publishers sell their ad inventory only to chosen advertisers. What’s important is that it can happen in many ways, for example, through the publisher’s ad server or using programmatic solutions – via Programmatic Direct.

Long story short, DSPs are an integral part of the programmatic processes, conducted with real-time bidding (RTB – which you’ll get familiar with in the second part of this glossary). Demand-Side Platform bids on ad requests through an Ad Exchange; contrary to SSPs (Supply-Side Platform), DSPs are on the buyer (advertiser’s) side.

E as Exchange

Imagine you are at an art auction – but a futuristic one, because the bidding process is fully automated, fast, and multidimensional. Ad Exchange works precisely like that! It’s just not works of art that are bid for, but digital advertisements and all processes regarding them being sold and bought take place within these systems. Ad Exchange connects advertisers through a Demand-Side Platform (DSP) to publishers via a Supply-Side Platform (SSP). Simple as it is!

F as Fill rate

Ad fill rate is a metric that suggests the percentage of ad requests that end up as ad impressions. It’s a good indicator of the performance of different monetization methods you decided to go for. To calculate the ad fill rate, you have to divide the total number of ad impressions by the total number of ad requests and multiply the result by 100%.

G as Geotargeting

In a few words, geotargeting is a feature that uses location data to display the right and appropriate content to users from a specific area of the world. It’s a fundamental element of programmatic advertising because, as a result, chances of catching the desired audience increase, advertisers can meet their goals, and therefore your revenues are boosted. What’s more, usage of localization in programmatic proves to be helpful in many other ways. For instance, when you know some ad formats are not warmly welcome in specific regions, they can be adjusted accordingly. Overall, it’s a good idea to keep an eye on your target!

H as Header Bidding

There are several types of auctions in the programmatic world; one of them is header bidding. The technique allows multiple advertisers to participate simultaneously in a digital auction. A competitive environment leads to boosting the publisher’s ad revenue. In brief, your ad inventory is offered to various supply partners (SSP) at the same time, and the highest bid wins.

I as Inventory

In short, ad inventory is the advertising space on your website, app, or in video available for selling (in other words, to host the advertisers’ ad creation). It is vital to keep in mind that not all filled ad slots have the same worth and chance to be seen. Often users only scan your content or omit its huge parts. If you want to know more, check out our article on the website’s most attention-catching areas.

L as Layout

As walls are a fundamental part of a house, the layout is a fundamental element of your website or app. The proper layout can unlock your content’s true potential, but it can also be the key to success in terms of monetization. And it’s not only about the construction of your app or website’s main elements but also about how ad slots are arranged and distributed within it. That’s basically what a profitable ad layout is!

That’s only the first step!

You’re halfway there! There are more crucial terms related to the programmatic advertising universe that you should get familiar with. If the first part tired you a bit, grab a quick cup of coffee and then continue your journey of gaining knowledge by reading the second part of the programmatic glossary!