Why AI contextual advertising is an effective alternative to demographic targeting
With the impending “death” of the third party cookie, it’s no wonder that demographic targeting will soon also be on the way out
Back to the future
As the industry continues to scramble for a viable alternative to demographic targeting, contextual has emerged as the most attractive, but more importantly most future proof solution. Ironically, contextual targeting is one of the earliest forms of advertising, as brands attempted to take advantage of newspapers and the early days of TV to place their ads where their desired consumer was going to be.
As contextual advertising’s revival continues, many players have been jumping on the bandwagon, attempting to “go back to basics” and return to targeting content rather than people. However, not all of these players are created equally, and brands need to be aware that they will only be successful if they choose the right partner with the right solution.
Data and decisions
The more sophisticated forms of contextual advertising are now reliant on AI and generative AI. However, in order to produce the desired output there must first be the right input, and contextual AI is no exception. While demographic targeting relies on third party data that will soon be obsolete, AI is able to leverage a plethora of information for use within campaigns including highly accurate predictive assumptions especially when it comes to things like demographics and consumption of products.
Instead of focusing on an online persona created from a user’s purchase decisions, brands can now use the context behind those decisions to develop and optimize their marketing strategies all the way through the path to purchase.
AI-driven contextual targeting is also a lot more inclusive, as all relevant consumers can be reached rather than just the ones where data can be matched. Further this is increasingly becoming impossible with more than 70% of the open web traffic containing no third-party identifiers.
The ideal course of action for brands should be to work with providers who specialize in advertising on the open web. Being on the open web brings many benefits, not least the opportunity to leverage relationships with premium publishers, who in the coming years will see fair reward for the content they create and the audiences they generate.
High quality editorial content has been proven to be not only the most brand safe environment, but it is also where consumers are most likely to pay attention to and interact with the ad content. If that content is relevant to them, of course.
The key to relevance: contextual is not standing still
How can contextual providers ensure the ad content is relevant? This is where AI comes into its own. It’s really quite striking how much contextual AI has evolved, even over the last few months and even the last few days with updates to ChatGPT and Google’s Bard.
Where once we were reliant on the comprehensive analysis of the written and visual content of a page (which still plays a key role) we have quickly moved on to unsupervised machine learning models and network level analysis that allows to create custom content categories, offering a level of precision that third party cookies could never provide.
This leaves us wondering; where next? Generative AI, with programs such as ChatGPT has been dominating the news in recent months, and while talking about it now may seem like jumping on another bandwagon, it’s important to recognise its applications in other industries, including advertising. For me, it represents the next big step in contextual AI’s evolution and a massive step towards a new era of advertising.
Impactful and compelling creative is obviously vital to the success of any ad campaign, and the most innovative contextual players are integrating generative AI platforms into their solutions to make the most of these creatives.
We can take a creative supplied by the brand and modify it to fit even better within the context in which it is hosted, based on prompts generated by the contextual AI’s comprehensive analysis of a page. So instead of personalised data targeting one person we now have personalised creative targeting many but learning and iterating on the fly to improve the connection with the consumer.
Contextual creatives are proven, in many research studies, to be more effective than normal creatives in generating attention and engagement, and these AI generated creatives will resonate with consumers even further, while freeing brands’ creative teams from the laborious customization process.
It’s clear that contextual is here to stay, and that AI will continue to play a key role as it continues to grow in importance. It’s more important than ever that brands choose the right partner, to leverage bleeding edge technology and the best forms of targeting, in the best environments.