What is Ad Serving? 13 Common Online Advertising Terms Everyone Should Know
There are a lot of online advertising terms. Like any industry, there’s buzzwords and acronyms and a whole mess of words you’ll probably never need to know. Then, just as you begin to understand things, new technology comes out with a whole whack of terms to memorize and store away. Some of the stuff is pretty intuitive, but sometimes you just need a cheat-sheet when you’re in the middle of that conference call.
Enter this list. I’ve collected some of the most common ad ops (I’ll get to that) terms in one place and, tried to keep the definitions as simple as possible. Let me know in the comments if you think I’m off base, or if there’s a particularly hard definition you want nailed down. You can also find a larger list in AdButler’s help database.
Ad Serving
Ad Serving is the act of putting advertisements somewhere on the web. It’s the algorithms and churning servers that determine where someone is, what banner they should see, how to get it there, and keeps everything fast in the meantime. An Ad Server serves ads in the same way a waiter serves food. A website requests something, and the Ad Server brings it out. A simple concept, but something that’s at the very core of online advertising.
Ad Ops
Ad Ops, short for advertising operations, covers the entire field of online advertising. So we’re an ad ops blog, AdExchanger is an ad ops website, and AdButler is an ad ops product, although more specifically it’s an Ad Server. If it has anything to do with online advertising, it’s a part of Ad Ops.
Impressions
An Impression is metric of how many times a banner has been loaded, and hopefully seen, by a user. It’s paired with its sibling, the CPM.
CPM
CPM’s are the bread and butter of the industry. It’s an acronym that means Cost Per Mille, where Mille is latin for 1,000 and what it really means is Cost Per Thousand Impressions. A rate based market uses CPMs as the price, with higher quality websites charging a higher cpm (say $2.00) vs a lower quality website (say $0.30) per CPM.
CPM’s are joined by a couple other favourite acronyms, CPC (Cost Per Click) and CPR (Cost Per Conversion), usually charged at a higher rate. Clicks are a metric of how many times a banner has been “clicked-through” and sent someone to its destination, and a conversion is a more customized metric, but generally refers to how many clicks have been converted into actual sales (tracked using internet magic- like call backs and cookies). However, CPMs are still the go-to for most pricing.
Real Estate
Real Estate, or Screen Real Estate, is the empty spot that all advertising goes into. When we talk about a leaderboard slot or a pre-roll video, we’re really talking about types or shapes of real estate. When it comes down to it, Real Estate is an empty lot where an advertiser can put their work.
Direct Buy
A Direct Buy is the simplest and most straight forward transaction in advertising. A publisher has some empty real estate on their website, and an advertiser wants to use it. The advertiser pays the publisher, whether a fixed amount or a rate based amount, and then the publisher displays the advertisement.
Easily forgotten, Direct Buys have been overshadowed recently by fancier sales practises. However, Direct Buys almost always have higher conversion rates, which is good for the advertiser, and publishers can usually charge more for the space, which is good for their bottom line.
Most modern websites are a mix of Direct Buy and Programmatic advertising, with varying levels of split between them.
Ad Network
An Ad Network is like a big market full of sellers and buyers. Advertisers are presented with various real estate options, saving them the time of searching out each website one by one. The Ad Network profits by charging a slight markup on the real estate, and the publishers are happy because they are almost always guaranteed a sale.
Just like stores and markets in the real world, different Ad Networks focus on different things. Some point towards reach and large audiences, while others focus entirely on clicks and high conversion ratios.
Ad Exchange
If an Ad Network is a large collection of buyers and sellers, than an Ad Exchange is a large collection of large collections. Ad Exchanges pull in large swaths of real estate from various different Ad Networks and publishers and aggregates them even further, providing less specificity but more real estate.
Once again, just like an Ad Network, there’s a slight increase of cost as the Ad Exchanges take their cut from the transactions. You’ll also start seeing a lot more Programmatic Methods in an Ad Exchange than an Ad Network.
Programmatic Advertising
Here is where we start getting into the more abstract online advertising terms. Programmatic Advertising can refer to a whole slew of different methods of determining which banners and real estate to buy. But, at its most basic level, Programmatic Advertising means automated buying and selling. You put in what demographics you’re looking for, or what demographics come to your website, and you get connected to someone on the other side of the equation.
The most popular form of Programmatic right now is called Real Time Bidding (RTB). An RTB is a tiny auction that happens every time a page is loaded, hopefully in under a second. A request is made to the exchange, the exchange asks a bunch of different advertisers how much they’re willing to pay for the spot, and the highest paying one wins. Then, their banners get displayed.
However, as with anything, programmatic brings up its own problems, like fraud, preferential treatment, and page speed.
Header Bidding
Header Bidding is the hot new type of Programmatic Advertising that is all the rage in certain circles right now. It’s the idea of tapping into multiple Ad Exchanges at once and running an auction in each simultaneously, and then cherry picking which ones you like the most. It was created to counter the old standard, what was called a Waterfall.
In a Waterfall, you would move through a list of Ad Exchanges one by one until you found a banner you liked. As you can probably guess, this could take a long time, and slow those page speeds down.
However, Header Bidding isn’t the silver bullet against Waterfalls. It’s still a newer technology, and takes a lot of effort and time to make it more efficient than a standard Waterfall scenario, and its compatibility is still spotty.
Viewability
Viewability, like Header Bidding, is a (somewhat) newer consideration. Viewability is a measurement of how long a banner is viewable in a placement. This is meant to protect advertisers from being charged for banners that users never see, like those spots in the footer that you have to scroll for two minutes to see.
There’s still a large discussion going on about Viewability, how to track it, and what exactly a ‘viewable’ banner means. There are multiple camps emerging, but generally the conditions to be viewable are hovering between a minimum 25-50% of the banner being on screen for one concurrent second.
Rich Media
A long time ago, before the age of iPhones and streaming, Adobe Flash was the king of the internet. However, with Apple’s decision to drop support, followed by Google and multiple other companies, the rise of HTML5, and the revelation of multiple security flaws, Flash lost its throne, and creating interactive, dynamic banners became more freeing.
Rich Media refers to the group of technologies that have sprung up in the hole left by Flash. It can be streaming video, dynamic HTML5 coding, animated gifs, or a number of other things. Like a lot of stuff in this article, it’s a blanket term that is hard to nail down. However, the easiest test is to ask if a banner is just a picture or text. If not, it’s Rich Media. Even Flash is considered a form of Rich Media, now.
Tracking Pixel
When a banner is loaded via an Ad Server, an impression is counted. A tracking pixel is a tiny, 1×1 pixel image that is loaded after the banner to double-check that the impression actually happened. Tracking pixels are also used to track impressions on multiple servers, say if a publisher and advertiser want access to their own metrics. So when the banner and pixel are loaded, the impression is counted in two system instead of one, without forcing the advertisement to load two creatives.