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Top 10 Advertising Buzzwords Every Developer Should Know

Barbara Social Media Manager
September 16, 2011

According to a recent Gartner report, global mobile advertising spend is poised to top $3.3 billion in 2011–do you want a piece of that pie? Well, think in-app advertising. If you’re currently working on a new app, this is the perfect time to start strategizing on how to best monetize so you have a successful launch and make the most money possible.

The thing is, you may not have an idea of what to do or where to start when it comes to monetizing on a mobile platform. In an effort to help ease the pain in figuring out what words to type in the Google search bar, we’ve laid out some of the most common advertising terms to gear you up for an efficient and engaging conversation with your future ad solution provider.

1. Real-Time Bidding (RTB): RTB is a type of ad marketplace that allows brands to bid for individual ad impressions in real-time–basically meaning advertisers can bid on each ad impression as it is served to ensure they are reaching the right audience. It gives advertisers complete control over every impression for increased performance, and publishers significantly higher eCPMs. This new form of audience buying has already taken off in the online space and has been predicted by Google that by 2015, 50% of all targeted display ads will be bought using RTB.

2. Mediation Layer: A mediation layer is an ad solution provider that helps manage the connection between publishers (developers) and ad networks. Mediation layers allow developers to connect to multiple ad networks and manage how they allocate their ads in their app. They solve the issue of losing money on application traffic as you receive a much higher fill rate when accessing multiple demand sources. Examples of mediators are AdWhirl and Burstly.

3. Ad Exchange: An ad exchange is a marketplace that allows multiple demand sources (ad networks, advertisers, etc.) to bid on access to developer ad inventory (which is what we are!). The exchange sits in the middle of developers and networks, linking the two with an intelligent ad-serving platform. Developers download one SDK and make calls for ads, while the exchange uses data to find the ad within their system that will give the developer the most amount of money for that ad request. Developers benefit from using an ad exchange because advertisers give out the highest paying ads. Examples of exchanges are Mobclix and Nexage.

4. Fill Rate: Fill rate is the percentage of time that your ad solution provider returns an ad when your app makes a call for one. If your app makes 10 calls for ads and only receives 6 back, your fill rate is 60%. If your fill rate is less than 90-100%, you’re losing money on your inventory.

5. Display Ads: Display ads are the most common of mobile ad units and come in two banner sizes: 300×50 and 300×250. They typically represent approximately 90% of the mobile advertising inventory available in the marketplace.

6. Rich Media Ads: Rich media ad units include some sort of additional engagement within the ad. Examples include: expandables, interactive components (like gyroscope, access phone features) and video. They are typically displayed in-app or as an interstitial (placed in-between events in an app, i.e. a level transition) and pay three to five times as much as standard display units. See an example of a full-screen rich media ad here.

7. CPC, CPM & eCPM: Respectively, these are cost per click, cost per thousand impressions and effective CPM. A CPC campaign is where you are paid for every click of an ad within your app, while CPM is where you are paid for every thousand times an ad is viewed. eCPM is used for a CPC campaign to compare to CPM-based campaigns. A way to calculate eCPM for a CPC based campaign is CPC x CTR x 1000.

8. CTR: Click-Through Rate is the number of users who click on an ad divided by the number of times that an ad is shown. If ten people clicked on an ad out of 100 impressions, then the CTR is 10/100 or 10%. Many mobile advertisers measure campaign performance based off of CTR, deeming it very important in determining your CPM as well. Check out more tips on How to Increase Your Click-Through Rate.

9. UDID: Every mobile phone has a unique serial-number used for identification and verification purposes. Apple’s identification system is referred to as its UDID or “Unique Device Identifier” and is used by developers to provide personalized preferences for individual users within games, provision apps for users out of the app store, and is also used across the board for testing and optimization. Advertisers leverage the device ID for building rich profiles and serving targeted ads. Apple, however, recently announced the removal of UDID on iOS 5 devices, which will potentially have significant effects on the mobile app ecosystem. Alternatives to using the device ID can be found here.

10. Cross Promotion: Cross promotion is an opportunity to promote new apps on your already successful titles through in-app display ads. This is becoming a great way to generate more users and downloads for yourself, as it is easier to promote to your existing user base than a crowd that hasn’t downloaded your apps before. On top of that, most ad solution providers will give you the opportunity to run your own ads within your inventory–and each ad can be thought of as a newsletter headline, always changing to stay current with your upcoming releases and/or updates. The cost for this varies based on how much budget you have to put into the campaign. Some good examples/tips (e.g. Words with Friends’ in-app cross promotion) can be found here.

If you think we’ve missed any other crucial dev buzzwords, feel free to add them in our comments section below–we might just add them in!

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