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AppLovin presents: Ad Tech Deconstructed—a glossary for ad tech terms and concepts

by Katy Jensen on May 31, 2018

The world of ad tech is full of jargon and complex concepts. What’s why we’re breaking things down for you in our Ad Tech Deconstructed series where we put various ad tech terms and concepts under a microscope.

Here’s what we’ve covered so far.

Ad Tech Deconstructed: What is a mediation layer?

A mediation layer essentially automates the optimization of the programmatic waterfall based on parameters set by publishers. When an ad request is sent, the mediation layer quickly decides which ad source will yield the highest CPM for that impression, and the optimal ad in that network is served.

Click here for a full explanation of what a mediation layer does.

Ad Tech Deconstructed: How are CPM and eCPM different?

It’s common knowledge that CPM stands for “cost per mille,” meaning the cost per thousand ad impressions, but what does eCPM mean and why is it used? It stands for “effective cost per mille,” which essentially provides a more accurate look at how much ad revenue is actually generated from a number of impressions.

Click here for a full explanation of how eCPM differs from CPM and how it’s calculated.

Ad Tech Deconstructed: What is an ad exchange?

Ad exchanges are somewhat of an intermediary between the supply and demand sides of the digital ad buying space. They’re what SSPs and DSPs plug into to access and exchange ads and inventory from a wide variety of publishers and advertisers. Essentially, they’re the pool that impressions are taken from.

Click here for a full explanation about what ad exchanges are and how they’re different from SSPs.

Ad Tech Deconstructed: What is RTB, or real-time bidding?

Real-time bidding is a programmatic process through which DSPs and SSPs buy and sell advertising inventory. DSPs bid on ad space in an RTB auction, and the winning ad is given to the highest bidder and is loaded nearly instantly on a user’s device.

Click here for a full explanation about how RTB works.

Ad Tech Deconstructed: What is an SSP, or supply-side platform?

Supply-side platforms work largely like demand-side platforms but for the publisher side. SSPs create a place for publishers to make potential ad impressions available. Put simply, in an RTB auction, SSPs are the auctioneer, and DSPs are the buyers.

Click here for a full explanation about how SSPs work.

Ad Tech Deconstructed: What is a DSP, or demand-side platform?

In an RTB auction, DSPs set prices and bid on ad space as soon as it becomes available. In literally milliseconds, DSPs process requests for ad space, choose the best impression, bid on it, and then the ad is served in an app.

Click here for a full explanation about how DSPs work.

Want us to cover a specific ad tech topic? Tweet us @AppLovin or email info@applovin.com.

Katy Jensen is AppLovin’s marketing coordinator.

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