“School of Ad Tech” Part 1: What the Acronym

By Diksha Sahni | October 20th, 2016


It’s ‘back-to-school’ season for students in most parts of the world, so we thought we’ll take our readers back to school too! Welcome to AppLift’s new series: School of Ad Tech, where we will demystify the basics of ad tech for our readers. So, if you are new to ad tech, or want to brush up some concepts again, this series is for you! We’ll be posting a new part of the series every alternate week, so make sure to check back for all the parts in the series to ensure you don’t miss out!

In this first part, “What the Acronym”, we decrypt some of the most-used acronyms in ad tech, ranked alphabetically.

Get ready to take notes!

API: Acronym for “Application Programming Interface”, API is a set of rules that enable communication between machines such as a server, a mobile phone or a computer. APIs often work together with SDKs, (read on to know what that acronym stands for!), although they can also work without, and enable ad serving of standard and native ad formats in an automated way.

ARPU: ARPU or Average Revenue Per User is self-explanatory! It is the average revenue generated per customer and is generally calculated by taking all of the users and dividing the revenue.

ASO: App Store Optimization is the process aiming at improving the visibility and the discoverability of an app in the app store.

CPA: Cost Per Action (CPA) can be understood as the price paid by the advertiser when a user completes a certain action on the app. This action can vary, depending on the parameters set by the advertiser, such as registration, completing a sale, etc.

CPC: Cost Per Click (CPC) is an advertising model in which an advertiser pays the publisher when the ad is clicked. CPC is commonly used in website advertising.

CPFT: Cost Per First Transaction or CPFT is generally used by specific advertisers (such as payment wallet apps, mCommerce) as an advertising model whereby they pay the publisher only when a customer completes a first transaction on the app. It’s a specific instance of CPA.

CPI: Cost per Install is the price paid by the advertiser for each installation of a mobile app linked to the advertisement.

CPM: A commonly used advertising model in website advertising, CPM or Cost Per Thousand Impressions (M is the roman numeral for 1,000), is defined as the price that an advertiser pays for every 1000 ad impressions.

CTR: CTR, an acronym for Click-Through Rate, is a ratio of how often people who see the ad click on it. It is calculated by dividing the number of times an ad is shown by the total impressions. For example, if an ad gets 100 clicks out of 1000 impressions, then the CTR is 10%. A higher CTR can be a good indicator whether the users you are targeting are finding those ads relevant.

CPS: A Cost Per Sale or CPS model is based on the advertiser paying for each sale generated through the ad. It’s rather similar to CPFT.

DCO: DCO, an acronym for Dynamic Creative Optimization, is a technology in programmatic advertising that allows advertisers to modify and optimize the creatives in real-time to serve relevant ad content to views on every single impression. This can be by optimizing creative elements in the ad such as text, images, links etc.

DMP: A Data Management Platform, or DMP, can be understood as a data warehouse. It is a centralized platform that manages first-party data and integrates it with third-party data to tie user information and activity together and optimize media buys.

DSP: DSPs or Demand Side Platforms are technology platforms that advertisers use to automate the buying of ad space and monitor their campaigns.

eCPI: Effective cost per install is a performance metric that measures the effective amount paid by advertisers for each install whenever the billing model is based on a metric placed higher up in the conversion funnel, such as CPC or CPM.

eCPM: Effective cost per thousand impressions, abbreviated as eCPM, is a measure of revenue performance for publishers whenever the payout model is different than CPM.

I/O: Insertion orders, often simply called I/O, is an order form that specifies the details of an advertising campaign between an advertiser or agency and the publisher. It can be for campaigns that run via programmatic or non programmatic channels.

LTV: LTV or Lifetime Value of a user, can be understood as the projected revenue that a user will bring during their entire lifetime of interacting with the app, i.e., from the initial install to the final user interaction. It’s important to understand that it’s a projection and not an actual revenue figure.

SDK: Acronym for “Software Development Kit”; in the classic software development sense, a SDK is a set of software development tools that enable a developer to create applications for a specific platform, such as Apple’s iOS or Google’s Android; in mobile ad tech however, a SDK is simply a piece of code placed in mobile apps that enables communication with the publisher’s application and advertising software platforms. SDKs have a wide range of uses, among them analytics and monetization of mobile applications.

SSP: A Supply Side Platform or SSP can be understood as a DSP’s counterpart on the supply side. Publishers provide the inventory to serve ads. In a programmatic setting, they go through SSPs to help them sell and better manage their inventory. Stay tuned for the next parts in the series!

Stay tuned for the next parts in the series! Are there any topics you would like us to write about? Let us know in the comments!

Diksha Sahni
Diksha is a Content Marketing Manager at AppLift and is based out of our Bangalore office. When she is not behind her computer writing, you can find her binge watching her favorite movies, finding her happy place at a dance studio, and checking off places on her bucket list.

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