Adtech Glossary | Definitions & Examples

ARPU: Average Revenue Per User

ARPU is a key metric that measures how much money a company earns from each user on average over a specific period. It's calculated by dividing total revenue by the number of users.

Accelerated Mobile Pages (AMP)

Accelerated Mobile Pages are a framework developed by Google to create web pages that load incredibly fast on mobile devices. By imposing specific coding and layout restrictions, AMP significantly improves page loading speed, enhancing the overall user experience.

Active Users

Active users are unique individuals who interact with an app or website within a specified time frame. This metric is crucial for measuring growth, churn, and user loyalty. By tracking active users, businesses can gauge the health and vitality of their product.

Ad Network

An ad network is a platform that connects advertisers with publishers. It acts as a marketplace where advertisers buy ad space from websites and apps (publishers).

AdTech

AdTech is the technology backbone of digital advertising. It encompasses the tools and platforms that power the buying, selling, and delivery of online ads. From ad servers and demand-side platforms to data management and fraud prevention, AdTech underpins the entire digital advertising ecosystem.

Assisted Click Conversion (ACC)

ACC happens when a user clicks on an ad but does not complete the target action immediately. Instead, the conversion occurs later through another traffic source. This term highlights the importance of the initial ad click in attracting the user’s attention and playing a supporting role in the eventual conversion.

Attribution

Attribution is a method of identifying and assigning value to the various marketing touchpoints or channels that lead a consumer to perform a desired action, such as making a purchase or registering for a service. This process helps marketers determine which channels are most effective in driving conversions and allows for better optimization of marketing strategies and budget allocation.

Bounce Rate (BR)

Bounce Rate is a web analytics metric that measures the percentage of users who leave a website after viewing only one page without taking any further actions (such as navigating to other pages, clicking on links, or completing target actions). This metric is crucial for understanding how effectively a landing page retains users and encourages interaction with the website’s content.

CPC as a Buying/Selling Model

CPC (Cost Per Click) is a pricing model in digital advertising where advertisers pay each time a user clicks on their ad.

CPM (Cost Per Mille)

Is a metric in digital advertising that represents the cost advertisers pay for one thousand impressions of their ad.

Click

Is an action performed by a user that involves clicking on an advertisement (banner, text ad, video, etc.), which directs them to the advertiser's website or another designated landing page.

Click-Through Conversion (CTC)

A Click-Through Conversion occurs when a user sees an ad, clicks on it, and then completes a target action (e.g., making a purchase or registering) on the advertiser’s website. This type of conversion directly links the ad impression to the user’s subsequent action, demonstrating the ad’s effectiveness.

Click-Through Rate (CTR)

Is a metric used in digital advertising to measure the effectiveness of an advertisement.

Click-Through Sessions

Click-Through Sessions measure the total number of sessions on a website that started after a user clicked on an advertisement. This metric helps evaluate the effectiveness of ads in driving users to the site and provides insight into how well the ad encourages traffic.

Conversion

A conversion in digital advertising signifies a desired action completed by a user after engaging with an ad.

Conversion Rate (CR)

Conversion Rate is a metric that measures the effectiveness of an advertising campaign by showing the percentage of users who completed a desired action out of the total number of users who interacted with the ad. A conversion can be any user activity deemed valuable, such as making a purchase, registering, filling out a form, subscribing to a newsletter, etc.

Cost Per Acquisition

Cost Per Acquisition (CPA) is the marketing metric measuring the average cost to acquire a new customer. It calculates the total advertising spend divided by the number of new customers gained.

Cost Per Conversion (CPC)

Cost Per Conversion (CPC) measures the average amount spent to achieve a desired action, or conversion, from an advertising campaign. Conversions can include purchases, registrations, form submissions, or app downloads.

DMP (Data Management Platform)

A centralized system that collects, organizes, and analyzes large volumes of data from various sources, including first- and second-party data. Marketers use DMPs for detailed audience segmentation and to inform targeted advertising strategies. By integrating with DSPs and SSPs, DMPs enable advertisers to deliver more relevant and personalized ads to specific audience segments, enhancing the overall effectiveness of digital marketing campaigns.

Demand-Side Platform (DSP)

DSP is a software platform that enables advertisers and agencies to purchase digital advertising inventory programmatically. By automating the bidding process across multiple ad exchanges and SSPs, DSPs allow for real-time acquisition of ad impressions based on specific targeting criteria, such as demographics, interests, and behaviors.

Digital Advertising Exchange

A digital ad exchange is a real-time marketplace where publishers and advertisers transact ad inventory. Acting as a neutral intermediary, it connects demand-side platforms (DSPs) and supply-side platforms (SSPs) to facilitate automated bidding on ad impressions.

Digital Inventory

The collection of all available ad spaces in the online environment that can be sold and used for ad placements. This includes banners, videos, native ads, and other formats on websites, mobile apps, social media, search engines, and other digital platforms. Digital inventory is managed by Supply-Side Platforms (SSPs) and sold through programmatic auctions, direct deals, and private marketplaces.

Engaged Users

Engaged Users is a metric that indicates the number of users who actively interacted with a website after clicking on an advertisement. To be considered engaged, a user must stay on the site for more than 10 seconds, interact with page elements (such as clicking on a link or filling out a form), or view more than one page.

First-Party Data

First-party data is information collected directly from a company’s customers, website visitors, or app users. Gathered through interactions such as purchases, registrations, and website behavior, this data provides invaluable insights into customer preferences, behaviors, and actions.

First-Price Auction

In a first-price auction, the highest bidder wins the ad inventory and pays the exact amount of their winning bid. This format requires strategic bidding by advertisers, who often underbid their true valuation to avoid overpayment. While first-price auctions yield more predictable revenue for publishers, advertisers face increased complexity in determining the optimal bid due to the lack of information about competing bids, unlike in second-price auctions.

Header Bidding

Header bidding is a programmatic advertising technique that empowers publishers to simultaneously offer their ad inventory to multiple advertising platforms before determining the winning bid. Unlike the sequential waterfall method, header bidding creates a competitive auction environment by allowing multiple demand sources to compete for ad space in real-time. This process, executed within a webpage's header, often yields higher ad revenue for publishers due to increased competition and transparency.

Impression

Impression in digital advertising is a metric that reflects the number of times an advertisement was potentially displayed to a user.

OpenRTB Protocol

OpenRTB is a standardized communication protocol designed to facilitate real-time bidding (RTB) in the digital advertising ecosystem. By establishing a common language and data structure, OpenRTB ensures seamless interaction between ad exchanges, demand-side platforms (DSPs), and supply-side platforms (SSPs). This standardized framework optimizes efficiency, transparency, and interoperability within the programmatic advertising industry.

Page View

Page View is a web analytics metric that shows the number of times a website page was loaded or viewed by users. It is a fundamental indicator for measuring website traffic and understanding the popularity of a specific page among visitors.

Programmatic Advertising

An automated process for buying and selling online advertising space using algorithms and machine learning. This real-time process makes transactions more efficient and data-driven. Programmatic advertising includes methods like RTB, private marketplaces, and direct programmatic deals. It allows advertisers to target audiences more precisely and optimize ad spend by leveraging large volumes of data.

Publisher

A publisher is an individual or company that owns and manages a website, app, or other digital media resource where advertising inventory is placed. Publishers provide platforms for displaying advertisements and earn revenue from advertisers.

Real-Time Bidding (RTB)

Real-time bidding (RTB) is an automated auction process where digital ad inventory is bought and sold on a per-impression basis. When a user loads a webpage, available ad spaces are auctioned off in milliseconds, with advertisers competing to display their ads. The highest bidder wins the ad placement.

Return on Investment (ROI)

Return on Investment is a financial metric that measures the profitability of an investment relative to its cost. ROI indicates how much revenue is generated for each unit of currency invested in a project or advertising campaign, helping businesses assess and optimize their investments for maximum profit.

SSP (Supply-Side Platform)

A technology platform that manages digital advertising inventory from multiple publishers. SSPs connect publishers with ad exchanges and DSPs for automated and efficient selling of their available ad impressions. The platform helps publishers optimize revenue by controlling minimum prices, targeting parameters, and types of ads displayed. SSPs typically operate using real-time bidding (RTB) regulated by the OpenRTB protocol.

Second-Party Data

Second-party data represents another company’s first-party data shared through a collaborative partnership. This data is collected directly by the partner and shared with mutual consent. For example, a retailer might share customer purchase history with a credit card company for joint marketing initiatives.

Second-Price Auction

The Second-Price Auction, also referred to as a Vickrey Auction, is an auction model where the highest bidder secures the ad space but pays the amount of the second-highest bid (occasionally plus $0.01).

Third-Party Data

Third-party data is information collected by external organizations without direct user relationships. Aggregated from various online sources, this data is often purchased or shared for broader audience targeting.

View-Through Conversion (VTC)

A View-Through Conversion is recorded when a user sees an ad but does not click on it. However, the user later performs the target action on the advertiser’s website after arriving from another traffic source. This conversion type considers the influence of the ad impression on the user’s decision to convert in the future, even without direct interaction with the ad at the time it was shown.

Waterfalling

Waterfalling is a method of selling advertising inventory in digital advertising that uses a sequential process for bidding and selling ad space. In this method, ad requests are sent by publishers to multiple ad networks or Demand-Side Platforms (DSPs) in a specific order, starting with the highest-paying network.

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Essential Advertising Terms