Rather than relying on cookie-driven user data, contextual advertising tailors ads to the environment in which an audience is browsing. This targeting method relies on algorithms to select ad placements based on keywords, website content and other metadata. As a result, ads are served based on the interest of the user. For example, if a user is reading an article about makeup trends, contextual advertising can place ads on the page for related products such as mascara. Since the user is reading about makeup, they are probably interested in makeup products, so they will be receptive to the ad.
Contextual advertising is effective because it aligns with the current frame of mind of a user. Contextual advertising makes it possible to target a niche category and reach users who are currently thinking about that topic. This means that your ad is viewed when a person is in a receptive mindset to see it.
With evolving regulations around online privacy, such as the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), contextual advertising is gaining momentum. Although some browsers are considering phasing out third-party cookie tracking, behavioral targeting isn’t losing relevance. Behavioral targeting, which leverages cookies to track website visitors and target digital ads toward receptive customers, can instead be used in tandem with contextual targeting. Introducing contextual advertising to your existing behavioral strategy can enhance your ad campaigns, because contextual targeting has unique benefits.
Our historical analysis has shown that placing ads in the right context can increase user engagement by a factor of up from four to 10. Having the right context can give you a big boost in performance. One of the reasons contextual advertising is so effective is that it delivers an ideal customer experience by reaching people when they are in the right frame of mind. A person’s content consumption signals intent at a specific moment in time. Contextual advertising captures that intent and serves the ad in the moment they are actually ready to hear about it. This differentiates contextual targeting from behavioral, which targets a person based on their user data.
Contextual advertising also provides the opportunity for marketers to target niche contexts by specifying a topic or a collection of keywords. For example, in the makeup scenario, a marketer may want to create value alignment between users and the mascara by highlighting that the mascara is vegan. Contextual advertising would enable them to indicate keywords related to vegan makeup to precisely target a niche customer profile. This strategy is effective because it ensures your ads are served to consumers who are receptive to the niche attributes of a product or service.
Contextual advertising uses a unique methodology, which brings specific benefits that complement, rather than compete with, behavioral tactics. Both methodologies have different strengths that marketers can leverage according to their campaign goals, and the environment in which the campaign is served. By striking a balance between the two methodologies, marketers can reach their target audience in the most effective way.
For example, when targeting a geographic region that is restricting cookies, like in some parts of Europe, an advertiser will want to introduce a contextual strategy. But in regions that are still allowing cookie tracking, advertisers can continue to use behavioral tactics. Balancing the tactics together enables marketers to reach audiences in whatever way is most effective, based on various factors such as region.
The tactics can also be used together. One strategy would be to target contextually, and in tandem target using behavioral attributes to build an audience that can be retargeted. Since contextual targeting allows you to find your audience in cookie-less moments as well as in environments where cookies are still prevalent, it can be leveraged to build and inform an audience list for future retargeting.
For example, find the audience in cookieless environments, as your first prospecting line. Then use retargeting to capture them with cookies (assuming consent has been given). If they are available in the third-party segments, which is likely because there are still many environments where cookies exist, use that second prospecting line to feed into retargeting.
Privacy regulation doesn’t mean the end of audience targeting. New regulations are stimulating innovation in audience targeting, and that ensures targeting methods are aligned with upcoming trends and policy changes. Introducing contextual targeting into your marketing strategy creates an opportunity to increase campaign performance by testing new targeting tactics, and combining contextual with behavioral targeting will keep marketers ahead of the curve as new regulations arise and technology evolves.