This is Part 3 of our series of posts for “The Ultimate Guide to Making Money From Ad Networks”.

Online Advertising Glossary

Although we did touch upon a few things in our recent posts about ad networks, we believe it’s best to give you a complete overview of ad network terms and abbreviations in this separate article.

If you’re to become a publisher and work with ad networks then you will have to be well-versed in this industry-specific jargon. Knowing it will not only enhance your overall knowledge of the industry but it will also come in handy when you’re running calculations, ad networks comparisons, or trying to figure out network reports.

This glossary aims to explain all terms related to ad networks but also includes some general online marketing and online behavior terms to facilitate comprehension.

Advertiser Account – an account on ad network that is associated with the advertiser who is selling ads and looking to place them on publisher sites.

Ad Chain (Daisy Chain) – a practice in which publisher place ad tags from different ad networks in a CPM or PPC descending order (highest to lowest) in order to maximize both revenue and fill rate. If there is no high-ticket ad available, the ad unit will show the next ad in line.

Above the Fold – a term that is used to describe the content of a page that appears on the top. Fold is an imaginary line below which users need to scroll to see the content that is further down on the page.

Ad Network – an online brokerage company that connects advertisers who want to place their ads online with publishers who own websites where those ads could be placed. Ad networks can be horizontal, vertical, blind, and premium.

Ad Unit – the smallest component of online inventory which represent a specific place where an ad is shown on a website.

Ad Zones – on-site places that are designated to showing ads. They can be above the fold or below the fold – sidebar, in-content, header, and footer can all serve as ad zones.

Audience Segment – audience segment stands for a group of users that can be connected and clumped together based on some of their shared interests or demographics.

Banner Ad – graphical ad that is hyperlinked to advertiser’s site. Banner ads come in a variety of formats and they can be JPEG, GIFs, Java, or something else.

Banner Blindness – a term that describes the tendency of users to block out everything that remotely resembles a banner ad. Banner blindness is causing banner advertising to perform less effectively in the past couple of years.

Below the Fold – everything that appears on a web page that requires the user to scroll down to see. Above the fold ad placement works best and is most noticeable – by extension, below the fold ad placement tends to under perform.

Billable Impressions – The number of impressions for which the advertiser is going to get billed for.

Button Ad – an advertising unit that is smaller in size and placed on parts of a web page that is limited in space.

Bounce Rate – a number that tells you what percentage of your website visitors didn’t stick around, bouncing instead to a different page or moving back to search results.

Cache – computer memory that stores versions of websites locally in order to reduce load time.

Cache Bursting – process of adding a random number to banner HTML each time a site is loaded in order to ensure that every time the banner is showed it gets counted.

Contextual Advertising – also known as content-centered advertising. What it means is that ads shown are adapted to the content on the website.

Conversion Rate – a percentage of visitors who take the desired action. In this context, CR stands for the percentage of users who click on an ad.

Conversion Tag – a piece of code that keeps track of desired actions on a website. Used to track the number of sales, referrals, leads, or anything else.

Conversion Window – a period of time that can pass from when the visitor clicks on an ad until he accomplishes the desired action with that action still being attributed to the ad click.

Creative – term that mostly applies to ad images and graphics supplied by the advertiser. Sometimes the creative also includes copywriting.

Cost per Click (CPC) – cost acquired by the advertisers for every click on their ad.

Cost per Mille (CPM) – cost per thousands of impressions – advertisers will pay this amount for every thousand ads shown.

Cost per Lead (CPL) – cost acquired by the advertisers whenever they get a lead or an inquiry as a result of a visitor clicking on their ad.

Cost per Action (CPA) – cost acquired by the advertisers for every desired action that occurred from their ad. CPA is an umbrella term that covers CPI, CPL, CPS and more.

Click Through Rate (CTR) – a number expressed as a percentage that tells us how many ad impressions resulted in a click. For example, if an ad was shown 1,000 times and clicked on 16, the CTR would be 1.6 %.

Cookie – a small file sent by web servers that is stored locally on a computer. It helps to determine ad frequency and the number of unique visitors.

Discrepancy – difference between client ad numbers and partner’s numbers. Occurs frequently for a variety of reasons and has to be adjusted before advertisers are billed.

Effective Cost per Mile (eCPM) – calculated by dividing ad zone revenue with the number of impressions and multiplied by 1000. It’s an effective way of comparing CPC and CPM ads and should be calculated in order to gauge the possible earnings from different ad networks and revenue models.

Email Pay per Click (Email PPC) – cost that advertisers acquire for clicks in exclusively email marketing campaigns.

Frequency Cap – a feature that allows advertisers to limit the number of the same ads shown to a unique visitor.

Fill Rate – a percentage that represents ads that are actually served divided by ad impressions. This is an important metric for publishers because it directly impacts ad earnings. Revenue = eCPM x Impressions / 1000. If an ad network doesn’t’ have an ad that is suitable for an ad zone on your page it will leave it blank. This will lower your eCPM and consequently your revenue. Fill rate is important when evaluating the performance of a network.

Geo-Targeting – a feature that allows networks to show ads based on visitor’s physical location.

House Ad – an ad that is self-promotional in nature – meaning, it is not served by an ad network. It’s used when ad networks don’t have an ad to show in the zone so placement wouldn’t be left empty.

Impression – the number of times an ad was requested. Doesn’t represent a number of views – requests can be canceled – over-counted or foiled by cache – undercounted.

Interstitial Ad – An ad that is served between pages – usually an entry page, such as a login page, and a destination page, the page the visitor is trying to get to.

Publisher Account – an account on an ad network that is associated with a publisher – owner of a website selling ad space to advertisers.

Pay per Click (PPC) – a method of ad serving in which ads are shown for free and advertisers are only charged when a visitor clicks on their ad.

Revenue per Mille (RPM) – revenue earned by the publisher for every 1,000 ads they show.

Revenue Model – an agreement between the ad network and the publisher, detailing how and when publishers get paid and for which actions.

Stickiness – a term that describes websites on which visitors linger longer than average. These are usually sites with stellar content or game websites – online games or gambling sites.

Text Ad – a textual ad that appears on a website. It features several lines of copy with no images or graphics.

Unique Visitor – a number of users who visit a website over a period of time. Multiple visits from a single computer are always counted once. This metric is should be taken with a grain of salt as tens of unique users might visit the same website from a single computer – for example, at a library or at college.

Visitor – a user who visits a website. Can be numerous times, each visit is counted separately.

Feel free to add terms that you think should be added to the comments.