The goal of contextual advertising is to place ads alongside content that will be of greatest interest to the target audience. Contextual factors, such as a user’s current location, the time of day, and the topic of a visited website, are used to identify prospective clients. By applying data science to targeting, machine learning can use this data to show ads to those who are most likely to be interested in them. If a person is perusing an article concerning wedding preparations, they may come across an ad for, you guessed it, wedding clothes.

Traditional behavioral targeting relies on collecting information about a user’s online activities (such as which websites they visited and which products they looked at). Still, escalating privacy concerns have prompted companies to explore other methods. No longer are cookies or other behavioral markers necessary for advertisers to provide relevant ads. Companies may still make advertising that catches people’s attention by considering the setting in which the commercial will air. 

Contextual ad targeting is expected to grow to over USD 376 billion by 2027, and businesses are starting to adopt this new strategy. Hence, in this blog, we’ll discuss how brands can benefit from the boom of contextual advertising.

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What is contextual advertising?

Advertisements in a contextual format rely on keywords and material relevant to the user’s current situation. Ads are customized based on user data such as location, behavior, and interests. Numerous factors make contextual advertising appealing to corporations.

There are several reasons why contextual advertising performs better than more conventional forms of marketing. Sales go up because people are more likely to interact with adverts that are tailored to their specific interests.

Additionally, contextual advertising is more conversational because of this very factor. Businesses may now learn unprecedented levels of detail about their clients because of this development. As a result, we may utilize this data to improve our advertising and drive more sales.

Finally, a recent poll by Startpage indicated that 75 percent of Americans are “very anxious” or “very concerned” about their data being protected when they are online. Since contextual advertising discourages using cookies and personally identifiable information, it is an ideal starting point for these companies.

The contextual advertising bang: How brands can take advantage?

Why is context so crucial to advertising?

Advertisers may learn more about what kind of material interests a user by analysing a person’s context. Marketers may then direct an ad to them, tailor-made to pique their interest with relevant information and compelling copy.

In contrast to historical behaviour, contextual data may inform marketers what their target audience is interested in right now, even when relevant behavioural data becomes stale as consumers adapt to a dynamic environment. With this information, advertisers may send timely and appropriate messages.

Companies may also face challenges from shifting privacy rules and public opinion concerning internet tracking mechanisms like cookies. As a result of this change in perspective, marketers are beginning to realise that they may no longer be able to gather data in the same ways they have in the past. Data-related issues account for 80% of businesses’ difficulties when using technology to provide a more customised customer experience. Contextual advertising is viable for businesses willing to adapt to a cookie-less future and an ever-changing customer landscape.

The significance of contextual advertising in a world without cookies

Contextual advertising is seeing a renaissance in response to privacy regulations like the General Data Protection Regulation (GDPR) and Google’s decision to utilise third-party cookies no longer.

In response to consumers’ growing need for more control over their personal information while online, contextual advertising has emerged as a viable alternative for brands. Cookie-less data collection is more secure and yields useful insights into customer behaviour. It might provide more personalisation without compromising marketers’ privacy.

Exactly how can one distinguish between contextual and behavioural advertising?

It’s okay to choose between behavioural and contextual advertising. Contextual advertising, in contrast, is tailored specifically to the environment in which the user is surfing as well as the subject and content of the website they are now reading. The emphasis of behavioural advertising, on the other hand, is on the user’s activity just before they reach the page, such as the links they clicked to get there. Both forms of promotion have their uses and may complement one another to reach an audience best.

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The benefits of contextual advertising

Advertisers may gain a lot from using contextual advertising. Businesses use tools to improve the degree of customization provided by adverts by considering characteristics like location, time of day, and the material’s nature. The following are some of the advantages your company will get from using contextual advertising:

Doesn’t need cookies

There’s no doubt that customers are understandably more hesitant than ever to provide their data. In fact, 72% of Americans are “very anxious” or “very concerned,” according to a recent study by Startpage. However, cookies are not necessary for contextual advertising to provide relevant ads, allowing you to better allocate your advertising budget and reach your intended audience.

It is simpler to integrate contextual advertising

Behavioral targeting is notoriously resource-intensive, requiring not just the availability of sophisticated hardware and software but also a dedicated crew to process and interpret the data they gather. Contrarily, contextual advertising emphasizes AI’s predictions based on patterns and other data, which may make it a more straightforward tool to apply.

Even a slight personalization makes all the difference

Making even a little effort to tailor your message may pay off. Forrester found that even with an incipient approach to personalization, businesses may boost revenue by 6% and customer loyalty and engagement by 33%. An increasing number of customers (64%) believe firms must provide them with customized offers that are relevant to them. Given this information, your action plan should adapt to meet your customers’ needs as their tastes evolve.

Unfortunately, only roughly 40% of customers feel that the communications they get from companies are relevant, even though firms have the means to send such more personal messages. 45% of customers indicated they would not buy from or be less inclined to buy from a company if it didn’t provide personalized service.

Location is more reliable than actions

An individual’s past actions may not necessarily predict their current tastes. Since the status of COVID-19 is always developing and lockdowns are becoming more common, it’s only natural that users would alter their routines to account for the new circumstances. The IBM Watson Advertising COVID-19 Triggers solution was intended to assist marketers in adjusting their strategy in light of the virus’s current trajectory and events, easing their minds as they try to stay up with the ever-evolving buying patterns of their customers.

Alterations in the climate and other extraneous events may impact consumer spending. For instance, a looming snowfall in the Northeast might affect consumer spending. Therefore, advertising may target people in the region where the snowfall is expected to hit with messages about snow shovels, gloves, and hats.

The development of AI has led to more precision in context

AI has become better at assessing page content and delivering your ad to people more likely to be interested in viewing it, thanks to technological developments, which may enhance your number of leads and conversions. As a result of its ability to recognize patterns and learn from previous assignments, AI may also relieve your staff of the tedious labor of audience segmentation.

Increasing revenue via more accurate weather forecasting

Another crucial but often disregarded aspect of contextual advertising is the weather. Despite its seeming insignificance, a person’s location and the weather may reveal a great deal about their likely purchasing behavior. The impact of a temperature prediction of 50 degrees, for instance, in Massachusetts, is different from what it would be in Florida. Without relying on third-party cookies, IBM Watson Advertising Weather Targeting translates the correlation between weather and customer behavior into effective solutions for marketers.

The contextual advertising bang: How brands can take advantage?

How to implement contextual advertising

Businesses may benefit from contextual advertising in a variety of ways.

Displaying ads based on the weather

Businesses may better reach their target demographics based on shifting consumer habits when they use location data with reliable weather forecasts. On hotter days, a company that makes ice cream can decide to target a certain area with advertisements for its goods. A store that wants more foot traffic on rainy days may promote umbrella sales with contextual marketing. Advertising based on weather conditions and geographical data may be a potent tool for influencing consumer behaviour.

Efficient and creative optimization

IBM’s Watson Advertising Accelerator is one example of a platform that uses AI to analyze user activity and other data signals to generate customized ads. The Weather Channel’s digital assets, over-the-top (OTT), and video are just a few examples of where dynamic creative optimization (DCO) may be put to use.

Paid search results from Google

Google AdSense is among the best-known examples of contextual advertising. Google’s robots will automatically show consumers adverts tailored to their interests. If you have a blog reviewing movies, AdSense may display advertisements that invite readers to purchase tickets or subscribe to a streaming service.

Contextual ads that play during games and videos

Among the first games to include pre-loading contextual advertising, Sony’s Wipeout HD was a pioneer in this space. For instance, ads for shampoo on YouTube that play before how-to videos on self-haircutting are one example of in-video contextual advertising.

Native marketing

Contextual marketing takes the form of “native” ads. Use advertisements that blend in with the style of the host site. These adverts may be tailored to each individual based on their location and other information.

Conversational advertising

One method to enhance the quality of the suggestions you provide to your clients is to use conversational marketing. Customers may get the answers they need and get more personalized communications when you use a cutting-edge solution.

AI advertising

Using a variety of inputs, machine learning can predict the likelihood that a user would do a certain action. This might be based on anything from the current weather to a user’s location to their recent conversations to the words on a website. Then, AI can determine how to interact with the user to get the greatest potential result.

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There’s a lot of interest in contextual advertising right now, and with good cause. It’s efficient, saves money, and leaves plenty of space for innovation. Taking advantage of the recent uptick in contextual advertising might be a fantastic method to boost brand recognition, generate more leads and sales, and enhance return on investment. Any company may reap the benefits of contextual advertising if they take the proper approach and learn how it works.

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