These days, online advertising is all about delivering the right message to the target audience segment, essentially what you commonly hear about “right message delivered to the right person at the right time”.

Now there are of course different tactics and approaches to achieving that. One of it which, which is enjoying a revival in view of the demise of the Internet browser cookies, is contextual targeting or contextual advertising. If you have been shown a banner ad for a related product or services while visiting a webpage, you have experienced what is known as “contextual targeting”.

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Getting a specific ad delivered to a specific group of viewers can be a tough nut to crack for advertisers. Deliver it right, and you would likely be able to attract customers that would lead to conversions.

An interesting study by the CMO indicates that “5% of online viewers enjoy seeing retargeted ads.”

So how do you push your message in front of specific groups of audiences?

This article aims to walk you through the world of contextual advertising/targeting and how it can be useful for your business.


What is Contextual targeting?

Contextual targeting refers to the placement of a display advertisement on websites that are directly relevant to the product being sold in the ad. The content within the ad is, therefore, directly related to the content on the site/page.

Remember searching for tour packages in a country and being hit with a banner display that shows special flight prices on a similar website? That’s contextual advertising for you.

The technique is also used by search engines to put up advertisements on their result pages. It is done by matching the keywords in the search query to the content in the ad.

Contextual targeting utilizes session data information to triangulate a user’s intentions and interests, as opposed to using data collected, stored, and analyzed about that user over a period of time. With GDPR and CCPA regulations enforcing for stricter use of personal data and protection of privacy, there is rising demand for contextual targeting. There is now increased awareness from consumers worldwide, and public and regulatory pressures are mounting for the industry to restrict or limit the collection of user data. Hence, cookie-based ad targeting becomes increasingly hampered and many internet browsers are also participating to limit use of cookies.

Contextual targeting, on the other hand, uses session information, such as the website a user is browsing, to determine the individual’s intentions and interests. Being data that is interpretive and derived from user’s behavior, rather than direct user information, targeting based upon context is compliant with both public and regulatory sentiments toward privacy. Yay!

As per the statistics from “An Insider’s Look at Media, Brand Safety and Partnerships report from Sizmek,” 87 percent of marketers plan to increase the scale of contextual targeting and find new audiences altogether.

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Since the ads are placed by matching and considering the searcher’s intent, contextual ads usually have a higher chance of influencing the users and generating a favorable response.

When displayed to an interested audience, there is greater chance of achieving higher click-through-rates and conversions.

A study conducted by Wishpond says that “The click-through rate (CTR) of a contextual retargeted ad is 10x higher than the CTR of a typical display ad”!

Ten times higher CTR. The figures say it all!

With the right audience selection and the use of specific keywords, contextual targeting allows you to increase the relevancy of your ad, thereby maximizing the ROI.

What is Contextual traffic?

Imagine scrolling through a website that gives you information about car parts and accessories and getting hit with a dynamic ad for some latest car accessories in the market.

The idea is to target the ad at a section of people who are more likely to hit the “buy” tab. This is where the relevance of the term “contextual traffic” comes in.

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Contextual traffic also referred to as PPV (Pay per view) form of advertising. Since only the relevant ads are put on a particular website, affiliates are required to pay per view of the ad (irrespective of the user clicking on it).

How does contextual advertising work?

Let’s get down to the real deal. How are contextual ads placed, and what is the working methodology behind it?

As mentioned earlier, the concept used here is hyper-targeted advertising. Ads are placed on relevant websites or blogs by selecting the right keywords and pairing them with the content available on the website.

Google Ads analyses the content to understand the core theme, match it against relevant keywords, topics, demographics, users, and their browsing habits, and places it accordingly.

Users may hence not necessarily be searching for you, but their browsing history and real-time data allows Google Ad Sense to place dynamic content in front of them.

For example, you would have noticed YouTube Ads showcasing relevant products popping up at the right time. Imagine the impact when a user gets to see a brief video of your product while browsing through related content!

The process

Following are the key steps that are followed during contextual targeting:

  1. Keyword selection: Target keywords, as well as topics and phrases, are added to the Display Network ad groups.
  2. Google Ads analyses the keywords and co-relates them with matching websites. The software analyzes various features like links, page structure, content, images, etc. displayed on the site. Ads are therefore matched to the website’s central theme.
  3. Ads are placed.

While the steps mentioned above are the basic process of displaying a contextual ad, modern technology and the use of behavior data has made it far more advanced than this.

Behavioral targeting and Native advertising (discussed later in the article) are some additional tools that are used in the contextual ad formats.

Take a look at our brief video tutorial on Contextual targeting, its relevance, and how it works.

Google AdSense and other service providers

Google AdSense and are two major contextual advertising networks. Google AdSense generates JavaScript codes that are inserted into web pages to display relevant ads.

Ads are indexed based on their relevance, which is calculated using factors like keywords, demographics, searcher intent, language, etc.

What is the difference between Contextual targeting and Behavioral targeting?

While contextual targeting is a very crucial tool in the world of advertising, behavioral targeting is another method that can not be ignored.

Behavioral advertising includes displaying the advertisements to a select group of users based on their online behavior.

Data is specifically collected on the browsing habits of the users. These include:

  • Number and type of website’s frequently visited
  • Time spent on each site
  • The type of pages clicked through
  • Date of visit
  • Interaction on the website

Behavior data is tracked using HTTP requests or flash cookies where each user is identified using a cookie. Once sufficient data is collected, users are grouped together as segments based on their behavior.

Use behavioral data to target customers

Behavior data helps advertisers and brands to display ads across various networks that are matching to the content of the display.

A visitor browsing a clothing brand may be an easy target to hit the purchase tab if a relevant clothing item ad is served to him.

The two most frequently used and popular advertising networks are:

  • Google Display Ads– Users need to create a remarketing list and tag. Once done, tools like Audience manager and shared library on the platform are used to define rules for your segmented audience groups.
  • Facebook Ads– Users need to set up a business FB page and create an ads account. Facebook pixels are created and Javascript is added to the website. Next, go to the “ “Ads Manager” and select “Audiences.” Finally, select the pixel and choose clauses that fit your targeting requirements.

Benefits of Contextual targeting

Gone are the days of traditional web ads. Contextual advertising has multiple advantages to offer.

benefits of contextual targeting

These include:

  1. Unlike behavioral data, contextual targeting has minimal reliance on personal information. This makes it a safe and preferable system for most companies that need to follow regulations like GDPR.
  2. Contextual ads increase purchases significantly since they are effective for specific types of content.
  3. Contextual ads add to the value of the content.
  4. Since contextual ads are specifically designed for an audience who are interested in the subject, they are less disturbing than the traditional banner ads.

While contextual targeting is a favored tool for companies looking to reach out to their segmented audience groups, it does not come with its own set of challenges.

For starters, some products and concepts can be too generic for specific targeting and selecting a group of users may end up losing on others. Additionally, the process requires careful consideration of keywords and content. Incidences of poor pairings have often been noted. Finally, problems related to frequency capping (that is limiting the total number of times that a user visits an ad) and its implementation can be hard to manage.


Contextual targeting vs Google Chrome’s decision to phase out third party cookies

Google Chrome’s decision to phase out third-party cookies hasn’t come down too well on ad buyers.

However, leading brands are eyeing it as an opportunity to renew and reset their targeting techniques. Various popular brands are considering strategies like focussing on segmented audience groups rather than over-targeting the customers.

This sheds more light on the relevance of contextual data within the advertising world. It is safe to assume that the death of third party cookies will create data reliability as well as better quality.

Needless to say, entrepreneurs and business owners building cookie-based DSP have to re-think their strategies and focus on solutions that offer optimum data privacy in the future.

Final thoughts:

The advertising world has seen some major changes. The intent has clearly shifted from “mass reach” to “reaching the right audience at the right time.” And that is contextual advertising for you.

By serving ads to users who are already interested in the subject, the chances of generating positive responses are much higher. Effective strategies like using specific keywords for specific campaigns and websites increases the relevance of the ads, thereby maximizing the results.

After all, contextual targeting is just that – advertising that is “in context”!

Knorex XPO™ supports contextual targeting to let you deliver ads to delight your customers. Get in touch with us to ask for a demo today!