What is Contextual Advertising? Going Going, Back Back, to Pre-Cookies


Contextual advertising is back with a new look. The Cali look. Google is throwing out cookies, Apple let everyone opt-out of tracking, and many nations and states introduced laws deterring tracking. Why? People want more privacy online.


Behavioral advertising requires an advertiser to collect data based on a person’s online browsing behavior. The individual’s behavior is tracked over a specific period and categorized into a persona or profile for marketers to use. Pages, browsing, website clicks, and time spent on a website are examples of behavior. The problem—who determines how much data is enough? Nobody. People didn’t enjoy having their private information handed out. 


But there’s another option. Contextual advertising does not track behavior. Instead, systems match advertising media to the context of a website or app. Keywords and relevancy help match the right ads to the user. 


So how do you choose which is best for you? Take a closer look at the benefits and drawbacks of two forms of advertising and how to prepare for increased use of contextual advertising moving forward.

Benefits of Contextual Advertising

We know what you’re thinking, “Is Contextual Advertising Data-Driven?”


Yes, it is. Data quality is still the most important factor for marketers. Contextual advertising allows advertisers to place messaging on relevant topics or keywords, known as contextual targeting, which creates a direct hit to finding high-potential buyers with similar interests. Negative keywords help advertisers disassociate from topics and locations, too.


For instance, if a user is interested in backpacks and searches for the “best backpacks,” an advertiser who makes or sells backpacks can have advertising placed on the article’s page, increasing the chance of an immediate sale. The advertiser is striking when the iron is hot. At the same time, contextual advertising allows you to fulfill similar strategies as behavioral advertising. For instance, the backpack maker can still place ads on a bicycle website.


Contextual advertising avoids the issues of privacy concerns because it doesn’t rely on any specific customer‘s data or personally identifiable information (PII). Instead, it follows other traits like overall traffic to websites and popular keywords.  


Contextual Advertising is cheaper to implement than behavioral advertising. You don’t need robust tools, platforms, and data teams to start. However, accurate and cost-effective placement still requires work. Shifting back to contextual ads restores the prior marketing and advertising methods, though some ramping up will be needed to keep it more potent for today’s marketers and advertisers.


Still, there are drawbacks worth considering. Let’s look at a few now.

Benefits of Behavioral Advertising

Since tracking user browsing behavior is a must for behavioral advertising, this strategy works as essentially a highly-intelligent guess as to whether you will buy a product or not. For instance, it looks at traits like the time users spend on certain websites and the number of clicks to guess what subjects, products, and activities they like most. Advertisers then use this information for ad targeting.  


Let’s look at an example of a backpack maker placing ads. If the company is looking for high-potential buyers, it wants to place ads on websites that attract buyers of similar products. For instance, if the company sells backpacks designed for bicycle riding, it will choose websites that sell bicycles in the hope the buyer will be interested.


Behavioral advertising also allows for tracking user IP addresses and geolocations for locally relevant advertising. Personalization is possible by following actual user behaviors over extended periods. 

Drawbacks of Behavioral Advertising

The apparent drawback of behavioral advertising is data privacy. Concerns over the years have led to increased initiatives to protect user data. Today users are giving permission for their data to be read and used, but precisely what and how much data is taken and shared are not always straightforward to understand, keeping data privacy concerns alive.


From an advertiser’s standpoint, users may prohibit cookies, which is what causes a user to suddenly see ads for backpacks all over Google and social media immediately after they visit a website for backpacks. But when users opt out of cookies due to concern for data privacy, they essentially disappear from the marketplace, creating gaps in finding high potential buyers.


Yet another downside of behavioral advertising is the amount of customer data required for analyzing customer behaviors. Analyzing huge volumes of data takes work and manpower, and all that professional bandwidth costs money, putting this option out of reach for marketing teams with smaller budgets.


Finally, relying on past behaviors for advertising can lead to untimely advertising. For instance, a user may shop for backpacks and then promptly buy one, making any future ads for backpacks irrelevant.

Drawbacks of Contextual Advertising

Contextual advertising has a few disadvantages. The first is advertisers experience less personalization because they aren’t tracking individual behavior and all the in-depth data it provides. It should be noted, however, that the data being analyzed is historic data and not always relevant.  


The second drawback is advertisers don’t enjoy geolocation benefits unless the keywords are site-specific. (i.e., Chicago Backpacks).


Additionally, contextual ads can distract people from the content they want to see. Engaged users looking for something specific tend not to click on (or give attention to) ads unless they are highly relevant to the moment.

“Nobody reads ads. People read what interests them, and sometimes it’s an ad.”

Preparing for the Shift Back to Contextual Advertising

Moving back to the prior model will require adjustments in understanding audience sizes, costs, and conversion rates. It will also need a shift in ad concepts to be more specific to meet the keywords or subjects on the pages.


Additionally, advertisers will need an apparent ability to dictate which websites they want to be on and which they don’t. If a backpack retailer doesn’t want to be on a political site due to the risk of showing a political bent, the company should be able to indicate which websites to avoid.


The same goes for the keywords themselves. For instance, if the backpack maker doesn’t want to be associated with articles discussing terrorist bombings caused by backpacks, it should be able to dictate that accordingly. Ad platforms must deliver contextual intelligence to deliver brand-safe environments.

“Brand safety isn’t a stagnant conversation. It’s a moving target every day.”

How to do Contextual Advertising

Advertisers use a demand-side platform to set their parameters, using a blend of categories (i.e., backpacks) and further fine-tune their options by selecting keywords within each category (i.e., bicycle backpacks). Typically they choose a quantity of 5-50 keywords for each topic.


After these initial steps, the search engine will use data and information such as language, link structure, and valuable insights to find relevant content. 


The advertiser can select how deep they want the search engine to go. For instance, if it only wants to forgo any other considerations and simply purchase placement on sites using the keyword bicycle backpacks, it can. Then the search engine can place ads on the website pages that are considered most relevant.


 Amazon DSP + DoubleVerify DV are common tools used together by digital marketers when using contextual advertising today. Meanwhile, Peer39 is a popular contextual advertising marketplace, especially for CTV. Oracle Data Cloud is enterprise-level and integrates a data management tool featuring Grapeshot, the pioneer of contextual targeting solutions. 


You can use an ad network, too. Google AdSense is the world’s most well-known example of contextual advertising. Google robots automatically serve relevant ads to your users. For example, If you run a backpack review blog, AdSense can serve contextual ads encouraging users to buy a specific bag.

Two Strategies, Both Offer Results

With today’s options to use behavioral and contextual advertising tactics, marketers and advertisers have more ways to reach their ideal customers. As privacy concerns remain front-page news, contextual marketing is expected to grow. Now is a good time to experiment with this method of reaching your people.


Now is an excellent time to talk to us about how licensing the NetWise ID Graph can help your advertising efforts.

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