IAB Programmatic Advertising 2 — Questions and Answers
Question 1: What is header bidding in programmatic advertising?
- A technique where multiple demand sources bid simultaneously before the ad server makes a call (Correct answer)
- A method for placing ads at the top of a webpage
- A strategy for bidding on premium header ad placements
- A process for setting maximum bid prices
Correct answer: A technique where multiple demand sources bid simultaneously before the ad server makes a call
Header bidding allows publishers to offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers, increasing competition and revenue.
Question 2: What does 'floor price' mean in a programmatic auction?
- The minimum CPM a publisher will accept for their inventory (Correct answer)
- The lowest bid submitted by an advertiser
- The average clearing price for an auction
- The price paid for remnant inventory
Correct answer: The minimum CPM a publisher will accept for their inventory
A floor price is the minimum CPM a publisher sets, below which they will not sell their inventory, protecting against undervaluation.
Question 3: What is the difference between first-price and second-price auctions in programmatic?
- First-price: winner pays their bid; Second-price: winner pays one cent above the second-highest bid (Correct answer)
- First-price: cheapest bid wins; Second-price: most expensive bid wins
- First-price: only one bidder; Second-price: multiple bidders
- First-price: manual bidding; Second-price: automated bidding
Correct answer: First-price: winner pays their bid; Second-price: winner pays one cent above the second-highest bid
In a first-price auction, the winner pays exactly what they bid, while in a second-price (Vickrey) auction, the winner pays one cent above the second-highest bid.
Question 4: What is audience segmentation in programmatic advertising?
- Dividing audiences into groups based on shared characteristics for targeted advertising (Correct answer)
- Splitting ad creatives into multiple versions for A/B testing
- Separating desktop and mobile traffic sources
- Organizing ad inventory by content category
Correct answer: Dividing audiences into groups based on shared characteristics for targeted advertising
Audience segmentation divides users into groups based on demographics, behaviors, or interests so advertisers can target specific segments with relevant messages.
Question 5: What is lookalike modeling in programmatic targeting?
- Finding new users who share characteristics with your existing high-value customers (Correct answer)
- Creating identical ad creatives for multiple platforms
- Matching ad formats to publisher content
- Duplicating successful campaigns for different regions
Correct answer: Finding new users who share characteristics with your existing high-value customers
Lookalike modeling uses data science to identify new potential customers who have similar attributes to an advertiser's best existing customers.
Question 6: What is frequency capping in programmatic advertising?
- Limiting how many times a single user sees the same ad within a given period (Correct answer)
- Setting a maximum budget for a campaign
- Restricting the number of publishers in a buy
- Limiting bidding to specific dayparts
Correct answer: Limiting how many times a single user sees the same ad within a given period
Frequency capping controls how many times an individual user is exposed to the same ad during a defined time period, preventing ad fatigue.
IAB Programmatic Advertising 2
What is header bidding in programmatic advertising?