There are different kinds of ad units for various ad formats like banner ads, interstitial ads, rewarded ads, video ads and native ads.
Banner Ads: An ad format that appears at the top & bottom of the device screen.
Interstitial Ads: Full-page ads that appear at natural breaks and transitions. It also supports video ads
Rewarded Ads: Ads that reward the users with coins or extra lives for watching short videos and interacting with playable ads and surveys. Click here to learn more about how rewarded ads boost revenue.
Native Ads: Ad format that matches the look & feel of your app. Ads appear in line with app content. They are customizable and support video ads.
Ad type chooses the ads an ad unit can show users. When an ad type is selected for an ad unit, the publisher is selecting the kinds of ads they want to show their users.
An ad unit can only receive an ad that matches one of its assigned ad types. Ad type can be text, image, video, and interactive or playable ads. The ad types available to an ad unit depend on the ad format you selected when creating it.