With the end in sight for third-party cookies, contextual targeting is having a renaissance. But contextual advertising today is not the same as contextual advertising of old.
Statista predicts that contextual advertising spending will reach $562 billion by 2030, up from approximately $200 billion in 2022. Connatix research showed UK and US marketers intended to increase investment in contextual advertising.
What is Contextual Advertising?
Contextual advertising places ads on publisher web pages based on the content of those pages. For example an advertisement from Radiate B2B would be placed on a web page writing about B2B advertising.
Alternatively, an advertisement from Mailchimp, promoting its email marketing platform would be shown on a website writing about email marketing.
This has pros and cons of course.
Pros
- Interest: we know the visitor to the page has an interest in that particular topic as they have chosen to spend time reading the article. This increased affinity means that associating your brand in this space will likely also be of interest to the reader – and this bears up in the data with contextual advertising outperforming random placements.
- Privacy: The main reason contextual advertising is seeing an upsurge in usage is due to third-party cookies being switched off due to the technology breaking modern privacy laws. Contextual advertising does not rely on any data beyond the chosen contextual segment, which does not use any individual data.
- Reach: one of the other techniques being adopted now cookies are being switched off is the use of first-party data which uses CRM data or other behavioural data collected directly by yourself to target advertising. The challenge with first-party data is that it is only a small part of your target audience and so you need to go beyond first-party data to increase the number of people you can reach.
- Low cost: contextual advertising is usually a lower cost than other techniques (other than random placement which we don’t recommend!)
- User preference: 81% of users preferred ads to relate to the content they are viewing (IAS). Perhaps more important is the finding that 69% of consumers would be more likely to look at an ad if it was relevant to the content they were reading (DV/Sapio)
Cons
- Reach: while contextual targeting has more reach than using first-party data, it is also much broader than most B2B marketers would like as the segments are typically industry-related or interest-related. Narrowing down by size of the company for example is not possible (for this you would need to use company-targeted advertising).
Behavioural Advertising vs Contextual Advertising
These two techniques sit at opposite ends of the advertising spectrum. Whereas contextual advertising targets advertising based on the keywords or topics that the publisher has written, behavioural advertising uses data collected separately from the website that the advert appears on.
This might be a previous action. For example a visit to your website or your LinkedIn page or even that you have seen another advert previously.
How does contextual advertising work?
To use contextual advertising, you need to use a platform (which we can help you with!) to reach the chosen publisher’s website. Of course, knowing which websites you want to target (and knowing which ones will take your adverts) is a challenge. Instead, websites or their pages are categorised for you so that you just need to select an industry, target audience or topic.
As with other types of display advertising, contextual advertising is fully compatible with brand safety techniques allowing you to block your advertisement from appearing in places you do not want.
Targeting Topics vs Keywords: two different approaches
The big difference between contextual advertising today compared to its use in the early days of the internet is down to the quality of data signals available. Historically, websites were categorised by themselves leading to some rather questionable choices.
Today, you can select industries or topics that have been vetted and approved by third parties. Topics tend to relate to the entire website, which means you can end up on any page within that site even if the article in question is not contextually a fit for your advert.
You can also go a step further in your targeting with billions of web articles categorised based on the keywords on the page itself. Keywords use NLP (natural language processing) techniques to allow you to target specific pages within websites, which means that your advert will not appear on other pages on the website which are not contextually relevant. It also means that you can reach more websites as some general websites may have contextually relevant content. This is also called semantic targeting.
The results
IAS released a study showing the impact of contextual advertising on consumer intent and buying behaviour. They found:
- Purchase intent was 14% higher among consumers who viewed the in-context ad
- Consumers reported a 5% increase in favourability toward HP after seeing the in-context ad
- When unaided by a list, consumers were four times more likely to remember HP after seeing an in-context ad vs. out-of-context ad.
See the full study here.
Our own B2B research, combining contextual targeting with company-targeted advertising showed a 20-30% higher likelihood to respond to outreach and a 2-3x increase in the likelihood to become an opportunity.
Conclusion
Overall, contextual advertising is seeing a resurgence precisely because of its benefits in reach, price and a privacy-first environment. To learn more about other options once cookies are turned off click here.
