A placement is an optional tool for grouping ad units. It's a collection of one or more ad units where an advertiser's ad can be displayed. You can create placements to identify ad units that an advertiser might want to target. Common examples include a placement for all of the leaderboards on your site, a placement for all of the seasonal ad spaces on your site, or a placement for all of the homepages in your network if you own multiple websites.
For example, you operate a news site. You might create one placement that includes ad units for all section homepages on your site. You might create another placement that includes all ad units on pages containing content about sports. Both of these placements could include the ad unit for the front page of the sports section. Other placements might include combinations of ad units appearing in the world news, travel, and weather sections of your site. (Keep in mind that putting the same ad unit in multiple placements can lead to some reporting complexities, discussed below.)
Placements are not required. Create them if they help you to organize your inventory.
Reporting on ad units with placements
If you share an ad unit across multiple placements, all placements that contain that ad unit will show up in order and line item reports if any one of the placements is targeted. This can make reporting harder to reconcile, but it might be the most convenient way to organize your inventory.
How it works in detail
Placement "Animals" contains ad unit "Puppy" and ad unit "Cow"
Placement "Pets" contains ad unit "Puppy" and ad unit "Kitten"
Line item 1 targets placement "Animals", but not placement "Pets".
When you run a report on line item 1, in addition to placement "Animals" being included because it's targeted, placement "Pets" will also be included because it shares ad unit "Puppy" with placement "Animals".
While the data for each placement is still technically correct, you'll be unable to reconcile reporting numbers because one ad unit's metrics can be attributed to multiple placements.
If you are pulling a historical report that includes both the "Ad unit" and "Placement" dimensions, the resulting report may include ad unit data reported before the placement creation date.
However, if the report includes the "Placement" dimension, without "Ad unit", metrics will only be shown from the creation date of the placement.