Online advertising jargon
Content on the web takes the form of web pages, apps, videos, and audio tracks, collectively called property in advertising jargon. Property contains space or time to show or play an ad, called inventory. When an end-user accesses property to view, read, or listen to, the user will not only access content but also any ad placed on inventory in this content. This is called an impression. Impressions are characterized by characteristics of the property, inventory, and end-user.
Property owners ask advertisers a fee for publishing an ad on their inventory. Strangely enough, in advertising jargon we say that the property owner sells an ad to the advertisers. What it really sells is empty space or idle time to place an ad.
Ad-based matching platforms offer advertisers targeted advertising. They build up a profile of their users based on the data users enter themselves and on user behavior on the platform and elsewhere. Advertisers specify the profile of the users they want to target, and the ad-based matching platform then places the ad on the inventory of web pages and apps viewed by the target audience. Advertisers pay the platform for this.
When a reader downloads property containing an ad, this is considered to be an ad impression. This terminology contains some wishful thinking, because not all of the downloaded property may be looked at or listened to by the viewer or listener.
When a viewer decides to click on an ad, this may lead to an action in which the reader buys the product advertised for. The reader’s attention then has been monetized by a sale, also called a conversion.
Platforms set the price of advertising in terms of cost per impression (CPM), per click (CPC), or per action (CPA). Payment per impression is done per 1000 (mille). In the book, we will only talk about impressions for brevity. The revenue models for clicks and further actions are the same as for impressions, but with different prices.