Contextual Advertising

What is it??

In this video, Ryan Reynolds demonstrated an excellent use of Contextual Advertising.

Imagine how frustrating it would be to search for running shoes and end up with search results for Texas colleges or triple-A batteries.

These results wouldn’t be very helpful. It will make much more sense if the search engine provides relevant links, like the Nike website and a map of shoe stores near your location. Now, apply this concept of convenient relevance that search engines provide to advertising.

Similar to search engines, contextual advertising works by targeting keywords that are relevant to the current webpage rather than using data about the visitor. Businesses use cross-channel advertising software, ad network tools, or demand-side platforms (DSPs) to publish contextual ads across search, mobile, display, and social.

“Contextual advertising refers to placing ads on web pages based on the context of a webpage. It uses contextual targeting factors such as keywords, website topics, location, or weather to show relevant contextual ads to potential customers”.

Why is context important in advertising?

Context is important because it provides advertisers with useful information about the type of content a user is interested in. Advertisers can then target them with an ad that allures the user with related content and messaging. 

While relevant behavioral data expires as consumers navigate an ever-changing environment, using context tells advertisers what users are interested in right now rather than relying on past behavior. Advertisers can use this to their advantage by delivering highly relevant and timely ads.

Companies may also struggle with ever-changing regulations and attitudes toward privacy and tactics that use cookies to inform them about a user’s online behavior. For companies ready to embrace a cookieless world and an environment where consumer needs are constantly shifting, contextual advertising is a way forward.

The context is powerful not only in just content creation but also in digital advertising. According to Statista, global spending on contextual advertising in 2021 was estimated at 178.3 billion U.S. dollars. By 2027, this expenditure is anticipated to reach 376.2 billion dollars, effectively doubling in size.

How does contextual targeting work and how to get started?

Contextual advertising uses AI and deep-learning algorithms to analyze content like text, speech, imagery, and geolocation in real time. Predictive advertising tools like IBM Watson Advertising Accelerator analyze all of this data and the content a user is browsing to determine if a user will take a particular action like clicking your ad. The deep analysis provided by AI is like what a human brain would do when deciding where to place an ad manually, which helps ensure your ad placement is relevant, timely, and of interest to the user. This also creates a more personalized experience for consumers, which is becoming increasingly important to consumers when deciding what brands, they want to align with.

To get started, each contextual ad needs a unique landing page to help ensure there is a central place for driving conversions. Contextual advertising requires a high level of creativity and relevancy.

The importance of contextual advertising in a cookieless world:

Contextual advertising is having a resurgence due to the impact of privacy laws like the GDPR and announcements made by Google to scrap third-party cookies—meaning advertisers will no longer be able to track users across multiple sites to target them.

With a desire for greater privacy online, contextual advertising is increasingly becoming a better option for advertisers. It’s privacy-friendly and you can still collect compelling data on consumers without the use of cookies. It may also help keep advertisers compliant while allowing for greater personalization—without being invasive.

What is the difference between contextual advertising and behavioral advertising?

Behavioral and contextual advertising doesn’t need to be an either-or decision; there’s a place for both. The main difference between the two is that contextual advertising targets context, that is, the environment in which the user is browsing and the topic and content of the page they’re viewing.

On the other hand, behavioral advertising is more focused on the actions a user made before reaching the web page, whether it’s clicking a particular link, product page, or article. Both kinds of advertising have their own benefits and can work together to achieve the desired result.

Benefits of contextual targeting in advertising: 

There are many benefits to contextual advertising for advertisers. Companies are beginning to implement tools to deliver higher levels of personalization based on the context of their advertisements such as weather, content, and other factors. Below are some of the benefits of implementing contextual advertising across your organization:

Contextual advertising doesn’t require using cookies and personal information: It’s no secret that consumers are becoming increasingly wary of giving out personal information. In fact, in a recent survey from Startpage, it was found that 72% of Americans are “very concerned” to “extremely concerned” about their online privacy. Contextual advertising doesn’t require cookies to deliver relevant ads, which can help you spend your budget more effectively while targeting the right people.

Contextual advertising is easier to implement: Behavioral targeting is notorious for requiring vast amounts of data, which requires not only the right tools and technology to collect it but a team to analyze it. Contextual advertising, on the other hand, focuses on predictions that AI makes based on trends and other insights that can make it an easier tool to implement.

Adding context leads to more relevant content: Even small personalization efforts can pay dividends. In a study done by Forrester, respondents with an immature personalization strategy saw a 6% increase in sales and a 33% increase in customer loyalty and engagement. Relevancy is becoming more important to consumers and 64% say it’s important that brands give them relevant, personalized offers. Knowing this, your strategy should reflect these changing consumer preferences.

Unfortunately, brands are still falling short of these more personal messages with only about 40% of consumers perceiving the communications received as relevant. Additionally, 45% of consumers said they would either not purchase or be less likely to purchase from an organization that failed to personalize the customer experience.

Reach the right audience at the right time: Contextual ads help you show your products or services to users in real-time as they surf the web. Since you aren’t showing ads based on users’ browsing habits, you’re appealing to customers with high purchase intent.

Optimize ads based on real-time metrics: Most ad platforms serve contextual ads programmatically, meaning you can optimize these ads in real-time and serve them in flight. Real-time ad campaign optimization gets you the most bang for your buck.

Promotes brand safety: Contextual ads show up on sites that customers explore while browsing the web. Showing up on sites that users visit creates an opportunity for you to connect with consumers looking for brands with meaningful messaging.

Disadvantages of contextual advertising:

Can be expensive: The cost of competitive keywords may leave you feeling out of pocket, without any visible return. That’s why it’s important to check contextual advertising efficacy before running ads.

Little control over when your ads show up: Your ads are placed based on auction bids. As competitors pay more to take the prime spots, it’ll be difficult for you to get good returns on ads.

Requires professional help: It’s difficult to pick the right keywords and launch an ad campaign. You may need a professional pay-per-click (PPC) specialist’s help to get the desired results.

Not suitable for all products and services: People aren’t searching for newly launched products or services. So, contextual targeting may not be the right solution for specialized product sellers and small businesses.

Types of contextual advertising:

Contextual ads can take many forms, depending on where they appear.

Text ads: When you look up something on a search engine, the most common kind of ads you will come across are text-based ads, appearing above the organic results. These ads also show up on websites or blogs, especially when users look for products or services. Text ads contain titles, extensions, descriptions, and site links.

Display ads: These ads contain text, images, or both. Companies use these ads for targeting or retargeting thematic audiences who have previously shown interest in products or services similar to theirs.

In-video ads: These contextual advertisements feature content related to the videos users watch. Ad partner networks rely on artificial intelligence to recognize scenes from the video and show relevant content to the viewers.

Shopping ads: These are the ads you see in online stores, social media sites, and partner websites of advertising service providers. Shopping ads are more visually appealing than search ads, resulting in a higher click-through rate (CTR) and conversion rate.

Native ads: This form of online advertising looks and acts like sponsored content, blending with the website’s own content. Native advertisements can be of two types: infeed ads and content recommendations. Infeed advertisements ensure a non-intrusive user experience as they appear in social feeds or online content. Content recommendations show up along with web or editorial content.

In-app and mobile ads: These ads offer a better user experience and let your target mobile users use different applications.

The future of contextual marketing: 

Contextual advertising solutions have been paying off both literally and figuratively, which means it isn’t going away any time soon. In fact, it’s only going to advance.

With the rise of artificial intelligence and augmented reality comes the rise of digital advertising being more precisely catered to you without having to look into your personal history.

Billboards with advertisements based on the type of car you drive, smartwatches with advertisements for rain boots as storm clouds loom overhead — who knows what else? Everything makes more sense with a little context. Keep your eyes peeled: augmented reality is going to be applied to much more than just advertising.

Contextual advertising represents a paradigm shift in digital marketing. By leveraging the power of context, advertisers can deliver relevant, timely, and personalized messages to their target audience. This approach not only enhances the user experience but also improves advertising effectiveness and return on investment. As technology continues to advance and data-driven insights become more refined, contextual advertising will continue to evolve, enabling brands to forge stronger connections with consumers in the dynamic digital landscape.