The adtech world is full of acronyms, and if you're new to the space—or even if you're experienced—it’s easy to lose track. Here’s a practical guide to the most commonly used terms in digital advertising. These definitions will help you better understand the platforms, processes, and metrics that power the industry.
DSP (Demand-Side Platform)
A DSP is a platform that advertisers use to buy digital ad inventory. It connects to multiple sources like ad exchanges and SSPs, allowing marketers to bid on impressions in real time. DSPs handle targeting, budget control, pacing, creative delivery, and reporting—all in one system.
SSP (Supply-Side Platform)
SSPs are the publisher-side version of a DSP. They help websites, apps, and streaming platforms sell their available ad space. SSPs connect to multiple demand sources and allow publishers to set rules around pricing, buyers, and inventory management. SSPs are critical for yield optimization and audience segmentation.
DMP (Data Management Platform)
A DMP is used to collect, organize, and activate data. It allows advertisers and publishers to build audience segments based on behavior, demographics, or first-party data. Those segments can then be pushed to DSPs or SSPs for targeted ad delivery.
RTB (Real-Time Bidding)
RTB is the process by which ad inventory is bought and sold in real time. Every time a user visits a site or opens an app, an auction takes place to determine which ad will be shown. The whole process happens in milliseconds. RTB allows for more efficient, dynamic buying compared to traditional direct deals.
CPM (Cost Per Mille or Cost Per Thousand Impressions)
This is a pricing model where advertisers pay for every 1,000 views of their ad. It’s commonly used for brand awareness campaigns and programmatic display buys. CPM is a baseline metric in most reporting dashboards.
CPC (Cost Per Click)
In a CPC model, advertisers only pay when someone clicks on their ad. This model is widely used in paid search, social media advertising, and some programmatic formats. It’s useful for performance campaigns focused on traffic or engagement.
CPA (Cost Per Action)
CPA means advertisers pay when a specific action is taken, like a purchase or sign-up. It’s a performance-based pricing model often used in conversion-driven campaigns. CPA campaigns require good tracking and attribution tools to measure accurately.
CPL (Cost Per Lead)
CPL is similar to CPA but focused specifically on lead generation. Advertisers pay when users submit contact info through forms or sign-ups. This model is popular in B2B marketing and for services like education or financial products.
CR (Conversion Rate)
Conversion rate measures the percentage of users who take the desired action after seeing or interacting with an ad. If 100 people click your ad and 5 make a purchase, the conversion rate is 5%. It’s one of the most closely watched performance indicators.
KPI (Key Performance Indicator)
KPIs are the metrics that define success for a campaign. This could be impressions, clicks, conversions, ROAS, or even brand lift. Different campaigns have different KPIs, and setting them clearly is critical for media planning and reporting.
Sam Khoury
Founder, Cedar Consultants
Creative consulting solutions for Adtech