Digital Advertising Terminology Breakdown

This is your essential Digital Advertising Glossary guide to help you understand the terminology used in advertising technology. Soon you’ll be separating your A/B, from your CTR on certain DSPs, right through to your ROI.

If there’s one page to keep bookmarked for all your activity, this Digital Advertising Glossary is it.

Ad Network

A company that connects advertisers to websites that host advertisements.

Ad Server

A company that provides technology to place an ad on a specific website, to deliver it to website visitors, and report on its performance.

Ad Space

The available space on a webpage for advertising.

Ad Tech / Advertising Technology

All technology, software and services that are used for delivering, controlling, targeting and reporting on online ads.

Audience Extension

A process used in advertising technology that expands the target audience size, while still ensuring the ads are relevant to that audience. It’s a tactic used to maximise engagement for the ad campaign.

A/B Testing

A method of testing the effectiveness of ads. It can also be referred to as split testing and involves changing one element of an ad, so that you have two ads (with one tiny difference to test). This could be a phrase used in the call to action, an image, or the shape of a button that needs to be clicked. The two ads then run under the same circumstances, with one performing better.

The point of A/B testing is to drill down into the elements that make the most impact with a specific ad, ensuring that you use these elements to secure maximum returns on your ads.

Banner Ad

A banner ad is a rectangular image-based ad placed on a webpage, that stretches across the top, bottom, or sides of a website or online media property. The different shapes of ads have different names, with the horizontal banner ad referred to as a leaderboard, while vertical banners that are placed on a webpage’s sidebars are called skyscrapers. We’ve listed the names and pixel sizes below for a handy reference:

  • Medium Rectangle – 250 x 250 px
  • Square / Pop up – 240 x 400 px
  • Large Rectangle – 336 x 280 px
  • Rectangle – 180 x 150 px
  • Full Banner – 468 x 60 px
  • Half Banner – 234 x 60 px
  • Micro Bar – 88 x 31 px
  • Button 1 – 120 x 90 px
  • Button 2 – 120 x 60 px
  • Square Buttons – 125 x 125 px
  • Vertical Banner – 120 x 240 px
  • Skyscraper – 120 x 600 px
  • Half Page Ad 300 x 600 px
Bounce Rate

The percentage of site visitors that leave the site and “bounce” away from the original site.

Contextual Targeting

A form of targeted advertising where ads are selected and served by automated systems based on the identity of the user and the relevancy of the content displayed.

Conversion / Conversion Rate

Conversions are when a website visitors complete the intended goal or action you want them to take on your website, this could be a form fill or completing a sale.

Cost per Click (CPC)

The price an advertiser pays for a single click on an ad.

Cost per Install (CPI)

The price an advertiser pays each time their app is downloaded.

Cost per Thousand (CPM)

A term used to denote the price of 1000 ad impressions.

Cost per Action (CPA)

A performance-based online advertising model, whereby payment is based on users taking a specific action. These qualifying actions will relate directly to conversions and include sales or registrations for example, with payment depending on the conversion rates of the advertiser’s ads and website. Deals based solely on clicks don’t come under the CPA umbrella, as they will be viewed as CPC.

Cost per Lead (CPL)

For this performance-based advertising model, payment is based on the number of qualified leads that are generated. It is then the responsibility of the advertiser to convert the ‘qualified leads’ into sales.

Customer Acquisition Cost (CAC)

The cost that is incurred for a business to secure a new customer. CAC includes all costs such as research and marketing and is a key metric to help businesses determine the level of resources that can be spent on a customer, while still making a profit.

Cross Channel

Technology or media that applies across multiple formats and multiple devices. It should be differentiated from “cross device” which refers to multi-device, as opposed to multiple formats within devices.

Click-through Rate (CTR)

A metric that measures the number of clicks your ad (or ads) receive per number of impressions.

Display Advertising

A form of online advertising, where the advertiser’s message is shown on a web page. In most instances this will be done through an ad at the top or bottom of the page, or to one side of the content on the webpage.

Dynamic ads

Dynamic ads, or dynamic creatives, are banners that change automatically in order to adapt content, offers and promotions specifically to each user. This ensures that each user is served with the most effective creative that caters to their needs.

Engagement Rate

How many people interacted with something – whether a display ad, social media post, or piece of content – versus how many people simply saw it and didn’t interact. Interaction can include a number of actions such as clicks, shares, likes and comments depending on the campaign. It is calculated as the number of engagements, divided by total reach, x 100.

First-party data

Data that is collected by a brand, through their company website or e-commerce platform for example. It will focus on the actions that their users take while on their website.


The average number of times an ad will be presented to the audience. This can be calculated by dividing the number of impressions by the reach.


The total number of exposures to your advertisement, calculated by multiplying the number of Sports by Average Persons. One person can receive multiple exposures over time, i.e. if one person was exposed to the ad six times, this would count as six individual impressions. Think of it as how many people have potentially seen your ad.


The placement of an ad as recorded by an ad server.

Key Performance Indicator (KPI)

Setting predetermined goals for your campaigns is a given. KPIs are a measurable value that demonstrates how effectively a campaign is performing against its defined objectives.

Media Cost

The price you pay to present your ad. Media is priced up in a number of ways, such as impressions, clicks, leads, actions etc, and does not include the cost to create your ad and any other associated costs around your campaign.

Message Recall

Used to define how effective and ad is at driving a user’s ability to remember the brand or brand message that was communicated in the ad. The measurement is usually defined using a control/exposed survey methodology.

Opt-inWhen an individual gives a company permission to use data collected from them or about them for a specific reason, such as the marketing of products and services.

Pixel (advertising pixel) 
A pixel is a piece of code provided by a company to identify the user, by reading and recording cookies, and to track their behaviour on a website.

Pay-Per-Click (PPC)

A performance-based online advertising model whereby advertisers pay each time a user clicks on one of their ads. The most common type of PPC ad is the paid search ad, found on search engines. There are a number of different networks for PPC including Google and Bing, as well as social media platforms including Facebook.

Programmatic Ad Buying

Using software to purchase digital advertising, instead of the traditional process involving RFPs, negotiations and manual insertion orders.

Programmatic Direct

Purchasing of an ad directly between an advertiser and a publisher through an automated ad-buying system.

Programmatic Non-Reserved
An automated buy that works in a similar way to an open auction, in which any advertiser can bid to buy ad available ad space.


The number of people in the market that will likely be exposed to an ad.

Real-time Bidding

The buying and selling of online advertising through real-time auctions. Individual auctions happen in milli-seconds.


Digital display ads that are served to users that have already engaged with your website or based on specific keyword searches.

Run-of-Network (RON)

Scheduling of online advertising across the sites an ad network represents.

Run-of-Site (ROS)

Scheduling of online advertising whereby ads are run across an entire site. This is often done at a lower cost than the purchase of separate sub-sections.

Second-Party Data

When a company makes its first-party data available to purchase for another company for the purposes of advertising.

Share of Voice

An ad revenue model that looks at the percentage amongst other advertisers. It is used to represent the relative portion of ad inventory available to one advertiser within a defined market or a certain time period.

Target Audience

The intended audience for a specific ad or ad campaign. Often target audiences are split on demographics, such as age and gender as well as specific behavioural characteristics.

Third-Party Data
Data that one company collects indirectly or aggregates from other companies, selling directly to ad buyers.

The percentage of clicks vs. impressions on an ad within a specific page. This is also referred to as “ad click rate”.

Contact us today with any questions you have about digital display advertising – we’re always here for help and advice.

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