Glossary | L | Latency

What is latency?

Latency is the delay that occurs in communication over a network. Latency refers to a measure of time that occurs between performing a live-action and receiving a response. A good example to showcase the importance of latency is during the real-time bidding (RTB) process, where developers and marketers buy and sell impressions through real-time auctions. During this process, bids from demand-side platforms (DSPs) arrive at ad exchanges or supply-side platforms (SSPs) and require multiple back and forth requests before an ad is served. Latency here can include the time required to complete the auction and render an ad’s creative. High latency during this can result in advertisers not winning placements at their desired price point and developers selling their inventory at a lower than desired CPM. Both parties lose out and it becomes more difficult to drive revenue growth and engage your audience.