Technology, rules, and new ideas are always changing the digital advertising world. Because of this, brands and advertisers need to work hard to keep up with new changes to keep and grow their marketing chances.
SmartyAds, a leading programmatic advertising company, is at the forefront of these changes, helping businesses navigate the evolving landscape with innovative solutions and expertise.
A great example is contextual targeting. It’s become very popular and lots of people in the industry are talking about it. A survey in early 2022 showed that 27% of US marketers often use contextual targeting in their ads.
Why is contextual targeting getting so much attention again, and can it hence programmatic advertising? This article provides answers to these questions and also highlights the benefits and disadvantages of contextual targeting.
What is Contextual targeting?
Contextual targeting is about showing ads on websites that match them based on things like keywords or topics. The IAB made lists to help describe website content. This way, content creators can clearly explain what their content is about, helping advertisers pick the right spots for their ads.
Advertisers can pick the right spots to show their ads. They make sure the content on the website or app matches their ad and goal. For example, a phone maker might choose websites that talk about phones and gadgets. Sports betting sites might advertise on apps that show sports games or websites that talk about games.
Why is contextual targeting regaining popularity?
It’s no surprise that contextual targeting is coming back, as it was previously overlooked in favor of behavioral targeting and third-party cookies.
Since digital ads started, using the topic or content to show personalized ads was one of the first ways to do it. Anonymous user information let advertisers switch to what seemed like a better way to target ads, which then led to the use of identifiers (cookies). Third-party cookies really changed the game, making it possible to identify and follow users for more targeted advertising.
Still, the detailed information that cookies give means collecting and looking at users’ personal info — often they don’t even know it’s happening. Because some people started to get user data in wrong ways, there were real worries about privacy being broken.
Because of this, right now, third-party cookies are slowly being stopped, but for now, they can still track what users do (until the year 2023). This will make contextual advertising a better choice.
Reimagining contextual targeting: what lies ahead for advertisers?
There is already a rapidly expanding adoption of contextual targeting; for example, TikTok.
The tech titan has already announced the launch of TikTok Pulse, a new contextual advertising technology that enables marketers to advertise alongside the highest-performing content in the “For You” feed.
The social network asserts that the new offering will increase brand visibility and will assist marketers in promoting engagement.
Results indicate that, on average, Pulse increased brand favorability by 8% and increased brand recall by 10%. It also discovered a 22% increase in purchasing intent among Generation Z audiences.
Furthermore, recent studies published by GumGum revealed that 61% of US marketers utilize contextual targeting to deliver their ads and 24% want to raise their advertising budget. In the UK, 59% use contextual targeting and 26% plan to increase their contextual targeting ad spending.
According to a GlobeNewswire report, in 2022, an estimated USD 267.4 billion will be spent on contextual advertising, and the market is expected to grow at a CAGR of 18.75% between now and 2027.
So, if more players intend to allocate a sizeable portion of their budgets to contextual targeting, what are the benefits?
Pros of contextual targeting
With third-party cookies on the verge of being phased out, brands and advertisers must employ efficient targeting alternatives. Here are reasons why you should consider contextual targeting:
● Contextual targeting is not sensitive to various privacy laws and data protection regulations
The popular targeting strategy of tracking users and acquiring their information is plagued with privacy violations, which is why numerous privacy laws and regulations have been enacted.
With laws like ePR, CCPA and GDPR, LGPD, and PIPL, website owners are bound to inform users of the presence of web trackers. They are also compelled to educate users about the information these trackers obtain and how it is used.
Because contextual targeting does not require obtaining users’ data, advertisers are not obligated by privacy standards.
● Contextual advertising is less expensive
A reported study revealed that contextual advertising is a less expensive targeting alternative because contextual targeting does not require the use of resources and sophisticated mechanisms like other targeting options that are based on acquiring user data.
Advertisers only need to identify websites with content relevant to their advertisements.
● Contextual ads are less intrusive and they boost engagement rates
Since contextual ads are related to the contents of a webpage, users can easily resonate with the ad and not feel irritated, leading to higher engagement and recall rates.
According to a reported study conducted by The University of Southern California’s Applied Consumer Psychology department, contextual ads had a 93% higher recall rate than non-contextual ads.
It was also found that contextual advertising significantly enhanced ad qualities, such as brand image, engagement and referrals. In another study, DoubleVerify reported that 69% of consumers were more likely to engage with a contextual ad.
● It is simpler to implement and ideal for beginners
Contextual targeting is an efficient (but less demanding) option for digital advertisers who are not tech-savvy or have limited resources.
Also, it requires very little technical expertise and can be implemented quickly.
Cons of contextual targeting
Contextual targeting is not a faultless alternative to any other targeting option; this method has some challenges and disadvantages. Here are a few:
Lacks precise and in-depth targeting options
Contextual targeting assumes that all website visitors have interests similar to its content, so the same ad is served to everyone.
Advertisers are unable to take into account the distinct characteristics and preferences of individual users.
Also, brands may be unable to engage people who are interested in their products but do not access the target environment (website).
● Contextual targeting cannot be used on websites with diverse content
Since contextual targeting matches ads with website page content, it would be difficult to categorize multi-purpose websites that offer content across various verticals. Thus, advertising can be limited to niche-specific platforms.
● It takes time and experience to set up a successful campaign
Even experienced PPC professionals should spend at least several hours in order to assemble the semantic core for the campaign.
The professional should also correctly select the negative keyword list to filter out the irrelevant traffic.
As the campaign flows, campaigns will also require reviewing and optimization based on performance results.
Brand safety in contextual targeting
For the IAB, brand safety measures are defined as those that protect brands from negative user perceptions caused by inappropriate or objectionable advertising content.
Many marketers are so focused on promoting brand awareness and boosting conversion rates that they overlook the importance of brand desirability.
However, it is an important part of marketing and can have a significant impact on your campaign’s success.
Brand safety measures are essential because users can quickly become disinterested if your ad content is inappropriate or misleading. Also, when and where your ads appear can have an impact on the safety of your brand’s reputation.
For instance, a tourism center looking to display ads in the middle of breaking news about a terrorist attack may come off as insensitive. Likewise, you wouldn’t want your ads to appear on low-rated or offensive websites.
Tips for ensuring brand safety with contextual targeting
- Keep advertising content appropriate.
- Avoid blacklisted publishers.
- Do not plagiarize.
- Go for premium inventory.
- Do not make bogus claims.
Contextual targeting in display advertising
Contextual targeting in display advertising refers to the practice of delivering advertisements based on keywords discovered on a website. The contextual targeting system searches for associated keywords and phrases and then delivers ads based on those things.
Contextual display advertising, on the other hand, might take into account other categories, such as niche, page type or content type.
Contextual targeting in mobile
Contextual targeting in mobile apps presents a few unique challenges. When delivering ads, in-app contextual targeting compiles a variety of mobile-related data, such as the app’s metadata, the device type, the app category and the operating system. Such data can be normally retrieved from Play Market or App Store.
The other variant is fetching the data from mobile SDK, however, this method becomes available only if app developers have them installed in their apps.
Contextual targeting: how to get the best from programmatic advertising?
So…programmatic advertising and contextual targeting… How to get the best of both approaches?
First, I’d like to explain what programmatic advertising is: programmatic advertising is simply the process of using automated systems to buy and sell digital ad inventories rather than manually executing these transactions.
By automating and streamlining the ad buying and delivery process, programmatic advertising can save time and money, which removes the need to manually bargain for ad inventory.
Programmatic advertising and contextual targeting aren’t mutually exclusive or interchangeable.
That is why, when contextual ad campaigns are combined with programmatic, advertisers can reach audiences at different touchpoints of the customer journey.
To wrap it up
In light of the declining use of third-party cookies, contextual targeting undeniably becomes a robust advertising option.
If you combine both programmatic and contextual, it expands your targeting possibilities and opens up new opportunities because you ensure that your ads hit your existing and potential customers at the same time.
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