February 26, 2023

Programmatic Advertising Glossary

Programmatic advertising is a complex and ever-evolving field. This glossary is designed to provide quick and easy access to definitions of the most commonly used terms in programmatic advertising. Whether you are new to the topic or an experienced professional, this glossary will help you understand the language of programmatic advertising and stay up-to-date on the latest developments.


Ad Exchange: An open, real-time marketplace where buyers and sellers of digital media can bid for and purchase digital advertising inventory.

Ad Network: An ad network is a type of online advertising platform that connects advertisers with publishers, who provide space on their websites and/or other media, to deliver ads to a targeted audience.

DAd Server: An ad server is a computer application used to serve advertisements to websites or other media platforms. Ad servers track performance and deliver targeted advertisements to users. 

Ads.txt: A publisher’s Ads.txt file is used to declare which companies are authorized to sell the publisher’s digital inventory. The Ads.txt file should include the name of each authorized digital seller, its publisher account ID, and the type of relationship. 

Agency Trading Desk: Agency trading desks are trading desks set up by large media buying agencies and used to purchase digital media on behalf of their clients. Agency trading desks leverage advanced algorithms, data, and technology to automate the buying process and maximize campaign performance. 

Application Programming Interface (API): An (API) is a set of programming instructions and standards for accessing a web-based software application or web tool. An API provides a way for applications to interact with each other and share data and services. APIs are used when programming graphical user interface (GUI) components, connecting web-based applications, and connecting applications to databases.


Bidder: A piece of code that allows advertisers to submit bids for digital advertising inventory in automated auctions.


Cookie: A small text file stored on a user’s computer that records information about the user’s browsing activity.

Cost Per Action (CPA): A pricing model where advertisers pay for each action taken on their website or advertisement, such as a purchase, sign-up, or download.

Cost Per Click (CPC): A pricing model where advertisers pay for each click on their website or advertisement.

Cost Per Mille (CPM): A pricing model where advertisers pay for every thousand impressions of their website or advertisement.

Cost Per View (CPV): A pricing model where advertisers pay for each view of their website or advertisement.


Data Management Platform (DMP): Software used to manage and sort large amounts of data collected on user behavior, interests, and demographics.

Deal ID: A deal ID is a unique identifier assigned to a specific offer or promotion. It is used to track sales and measure the performance of a specific deal.


Exchange-Based Advertising: A type of programmatic advertising in which buyers and sellers of digital media transact in an open, real-time marketplace.


Frequency Capping: A tool used to limit the number of times a user is exposed to the same advertisement.

First-Party Data: Data collected by a company from its own customers, typically through its website and other digital channels.

First Price Auction: Floor price is an auction format in which the highest bidder receives the item at the price they bid.

Floor Price: The minimum price that a seller is willing to accept for an item. It is typically used to set a baseline for buyers during an auction.


Granular Targeting: A method of targeting advertisements to users based on very specific criteria, such as age, gender, location, and interests.


Header Bidding: A technique used to increase the number of buyers competing for an ad impression.


Impression: A single instance of an advertisement being seen by a user.


Joint Industry Committee (JIC): A group of advertising industry stakeholders who collaborate to define standards and best practices for programmatic advertising.


Key Performance Indicators (KPIs): Metrics used to measure the success of a programmatic advertising campaign.


Lookalike Modeling: A machine learning technique used to target a broader audience that is similar to an advertiser’s existing customer base.


Machine Learning: A type of artificial intelligence that enables computers to learn from data and identify patterns without being explicitly programmed.


Native Advertising: A type of advertising that is designed to blend in with the look and feel of a website or app in order to appear more natural and relevant to the user.

Native DSP: A type of digital signal processing (DSP) that is optimized for a specific application or hardware platform. Native DSP applications are typically more efficient than other types of DSP and are designed to take full advantage of the performance capabilities of the underlying hardware.


Optimization: A process used to improve the performance of a programmatic advertising campaign.

Open Auction: An Open auction in programmatic advertising is an event in which multiple buyers compete, in real-time, to purchase a single impression. The highest bidder wins the impression and is charged the second highest amount bid. Open auctions are typically used in Real-Time Bidding (RTB) environments, in which demand-side platforms (DSPs) bid on ad impressions in order to deliver targeted ads to audiences.


Post-Click Engagement: The ability to track how users interact with an online advertisement after they have clicked on it. This can include information such as time spent on the page, page views, and any purchases that are made.

Pre-Bid Targeting: The practice of setting up targeting criteria and settings prior to the auction taking place. This criteria can include demographic, geographic, and behavioral targeting.

Preferred Deal/Unreserved Fixed Rate: An agreement between a publisher and advertiser that sets a fixed rate for an ad impression regardless of the auction result.

Private Auction: A type of auction where only the invited buyers are able to bid. This can be used to create a more controlled and secure environment for buyers to bid in.

Private Marketplace (PMP): A type of programmatic buying in which a publisher offers ad impressions to a select group of buyers.

Programmatic Direct: A type of programmatic buying that allows buyers to purchase inventory directly from a publisher, instead of going through an ad exchange. This allows for more control over the buying process and the ability to negotiate pricing.


Quality Assurance: A process used to ensure that programmatic advertising campaigns are properly configured and running optimally.


Real-Time Bidding (RTB): An automated auction process that allows buyers to bid for impressions in real-time.


Second-Party Data: Data shared between two parties and used by advertisers to reach specific target audiences. This data is typically collected by the first-party and can include consumer information, website behaviors, or purchase history.

Second Price Auction: An auction model that awards an impression to the highest bidder but at a price lower than the bid amount. This model allows the winning bidder to pay a price that is close to the second highest bid, resulting in more efficient ad spend.

Supply Side Platform (SSP): A platform that works with publishers to manage and monetize their inventory. It enables publishers to access demand sources, optimize their yield, and track performance metrics.

Supply-Side Platform (SSP): Software used by publishers to manage the sale of their digital ad inventory.


Targeting: The process of selecting the most appropriate audience for a given advertisement.

Tech Tax: The fees paid to technology providers, such as ad exchanges and demand-side platforms (DSPs), which facilitate the buying and selling of digital advertising inventory. Tech Tax is typically charged as a percentage of the total ad spend and includes fees for the use of the platform and other services such as data fees.

Third-party data: Data collected from sources other than the advertiser or publisher. This could include data about a consumer’s online behavior, such as purchase history, browsing history, and interests. It is used to target advertising to specific audiences and provide insights into consumer behavior.


User Interface (UI): The part of a programmatic advertising platform that buyers and sellers interact with in order to set up and manage campaigns.


Viewability: A metric used to measure whether or not a user actually saw an ad.

Video Ad-Serving Template (VAST): An open-standard protocol developed by the Interactive Advertising Bureau (IAB) that enables automated video ad delivery and management. It allows video ad servers to communicate with video players, providing a standard format for delivering video ads to websites and apps. 


White Label: A type of programmatic ad buying platform that is owned and operated by an external partner.


XML: A markup language used to store and transport data.


Yield Management: A process used to maximize the revenue generated from programmatic ad inventory.


Zero-Party Data: Data that a user has explicitly provided to a brand.