Introduction to Programmatic Advertising

The domain of digital advertising is filled with three letter abbreviations and concepts that might be hard to understand. We've put together a glossary with some of the most common ones.

Ad server

Ad servers is software services that allow advertisers and publishers to manage, optimize and distribute ads across of paid channels and track their performance.

Click-Through-Rate (CTR)

The proportion of impressions that were clicked. CTR is a common metric used to assess campaign performance.

Cost Per Action (CPA)

The cost of a conversion (action). The conversion can be defined as an event of value to the advertiser, such as a signup or sale.

Cost Per Click (CPC)

The cost of a click. Some ad networks and publishers sell campaigns priced by CPC.

Cost Per Mille (CPM)

The cost of 1000 impressions. CPM is the de facto standard for pricing of digital advertising.

Data Management Platform (DMP)

A data management platform (DMP) collects, organizes, and facilitates activation of first-, second-, and third-party audience data from various online, offline, and mobile sources. It also commonly offers the possibility to build customer profiles or personas based on the data to drive targeted advertising and personalization initiatives.

Demand Side Platform (DSP)

A demand side platform is software for programmatic media buying. It is commonly used by agencies and advertisers to plan, execute and refine advertising in multiple digital channels.

First Price Auction

An auction where the winner pays the bid placed. With the rise of header bidding, this has become the most common auction type in programmatic advertising.

Frequency Capping

After a certain number of exposures of an ad to a user, its impact will decrease. By setting a frequency cap, media buyers can control this and limit the number of exposures during a fixed period of time. This ensures that media budgets are not wasted on low-impact impressions.

Header Bidding

A header bidding wrapper is a frondend script used by publishers to solicit bids from multiple demand sources. It improves publisher monetization compared to the traditional waterfall model of adserving, as it increases competition.

Non-Human Traffic (NHT) or Invalid Traffic (IVT)

Ad views that are detected to be not human and filtered. This could be legitimate sources such as web crawlers, or illegitimate ones for fraudulent purposes.

Private Marketplace (PMP)

A PMP is a programmatic advertising deal where advertisers and publishers enter into an arrangement to buy and sell ad inventory. PMPs are invitation only and may have negotiated pricing and targeting options, including activation of publisher first party data.

Real-Time Bidding (RTB)

Real-Time Bidding is a process where sellers and buyers of digital ad space interact electronically in an automated fashion through the use of a standardized protocol, the most common standard OpenRTB maintained by IAB. Advertising with RTB is commonly referred to as Programmatic advertising.

Retargeting (or Remarketing)

A campaign tactic that targets users that have previously interacted with a specific web page or app, to stay top-of-mind and encourage revisit or conversion.

Second Price Auction (or Vickrey Auction)

An auction where the winner pays the second highest bid placed.

Supply Side Platform (SSP)

A supply side platform is software for programmatic media selling. It is used by publishers and site owners to manage ad placements and pricing, connect with programmatic demand, and manage what buyers and ads to allow.


A metric to quantify what proportion of ad impressions were actually shown in screen to the user, criteria being 50% of the ad shown for at least 1 second. The metric "measured (%)" sometimes accompany the viewability metric to indicate how many impressions that could have viewability assessed.

Visbility Adjusted Contact (VAC)

The estimated number of individuals facing an Out-Of-Home (OOH) advertising screen whilst an advertisement is displayed, adjusted for the probability that they are looking at the ad content.