What some of the trendiest words in ad tech actually mean.
The mobile ad tech space has only been around for a few years but still long enough to accumulate a clutter of ad tech lingo that leaves newbies and onlookers to the industry equally confused. Sure, you’ve heard these terms before – but do you really know what they mean? If you no longer want to pretend to know but actually want to become clear on what’s behind these fancy acronyms and names, then the following glossary is for you – ranked in decreasing order of buzziness!
- SDKAcronym 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 i.e. Apple’s iOS or Google’s Android platform; 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. Whereas an API serves standard and native formats, an SDK serves interstitial and rich media formats.
- Ad ServerA web server that stores and manages ads and delivers them to consumers from an ad network or a different provider. The ad server also performs various other tasks like counting the number of impressions / clicks for an ad campaign and generation of reports. Ad Servers can belong to ad networks or are available as white label solutions.
- APIAcronym for “Application Programming Interface”; a set of rules that enables communication between machines such as a server, a mobile phone or a PC. APIs are usually included in SDKs and enable ad serving of standard and native ad formats in an automated way. They have a wide range of usages in the mobile ad tech sector.
- MediationCommonly referred to as “ad network mediation”; a technology which delivers an integrated portfolio of ad networks to publishers and enables them to sell their inventory to the different ad networks through one single channel; mediation is possible at SDK and API level and serves as a means for publishers to increase their fill rate.
- DSPAcronym for Demand Side Platform; a technology that enables advertisers to buy impressions across a range of publisher inventory targeted towards specific users, based on information such as their location and previous browsing behavior. Publishers make their ad impressions available through marketplaces on ad exchanges or SSPs, and DSPs decide which ones to buy based on the information they receive from the advertiser. Often the price of those impressions is determined by a second-price auction, through a process known as real-time bidding. That means there’s no need for human salespeople to negotiate prices with buyers, because impressions are simply auctioned off to the highest bidder who then pays the price of the second highest bidder.
- SSPAcronym for Supply Side Platform; a technology that gathers various types of advertising demand for publishers including demand from traditional ad networks as well as ad exchanges. This demand is aggregated by Demand Side Platforms which plug into an SSP to bid on publisher’s inventory, using Real-Time-Bidding.
- DMPAcronym for Data Management Platform; a centralized computing system for collecting, integrating and managing large sets of data from first-, second-, and third party data sources. It provides processing of that data, and allows a user to push the resulting segmentation into live interactive channel environments.
- ImpressionA metric that describes the number of times an ad is displayed; an impression occurs each time a consumer is exposed to an advertisement.
- Ad ExchangeA technology platform that facilitates the buying and selling of online media advertising inventory from multiple ad networks through bidding practices. It functions as a sales channel between publishers and ad networks and can provide aggregated inventory to advertisers. Ad exchanges’ business models and practices may include features that are similar to those offered by ad networks.
- Ad NetworkA company that connects advertisers to publishers. It aggregates inventory from publishers to match it with advertiser demand. Ad networks use central ad servers to deliver advertisements to consumers which enable targeting, tracking and reporting of impressions.
- InventoryThe number of advertisements, or amount of ad space, a publisher has available to sell to an advertiser. In mobile ad tech, ad inventory is often valued in terms of impressions that the publisher can deliver to the advertiser.
- Fill RateThe ratio of ad requests that are successfully filled in relation to the total number of ad requests made, expressed in percentage.
- CPMCost per Mille; the price paid by an advertiser to a publisher displaying their ad 1000 times.
- CPCCost per Click; the price paid by an advertiser to the publisher for a single click on the ad that brings the consumer to its intended destination.
- CPICost per Install; the price paid by the advertiser for each installation of a mobile app linked to the advertisement.
- eCPMEffective Cost per Mille; metric for measuring revenue generated across various marketing channels; is calculated by dividing total earnings by the total number of impressions in thousands.
- RTBAcronym for Real Time Bidding; a technology that conducts a real-time auction of available mobile ad impressions by receiving bids from multiple demand sources such as DSPs within a set time interval (typically 100ms) and then delivering the ad to the winning bidder; usually a second price auction where the highest bidder pays the price bid by the second highest bidder.
- Rich MediaCommonly defined as a broad range of advertisements using Flash or HTML5 technology that exhibit dynamic motion like moving, floating or peeling down and occur either over time or in direct response to a user interaction. Rich media formats include video ads and interactive ads that require the engagement of the user.
- Programmatic BuyingBuying inventory in an automated way on an RTB exchange on another automated system.
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