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Why Contextual Targeting is Having a Moment in Digital Advertising ?>
Why Contextual Targeting is Having a Moment in Digital Advertising

Why Contextual Targeting is Having a Moment in Digital Advertising

The forthcoming “cookie-pocalypse” threatens to wreak havoc across the advertising industry, and many marketers are responding like birds: either running around in panic like chickens, or pretending the crisis doesn’t exist and burying their heads in the sand, ostrich-style. Clearly, neither is sustainable. 

So, are there any solutions out there that can help marketers get back to acting like humans?

Oddly enough, the most practical one may be staring us right in the face: contextual targeting.

…No, wait! Just give us a minute to explain.

Look, we get it: a lot of people are (quite understandably!) uninterested in hearing more about contextual targeting. It’s been around for a while and, candidly, it’s kind of boring. But in rare and exceptional instances such as this, old + boring doesn’t necessarily have to = bad. Just ask baseball fans, or anyone in the middle of a riveting game of Monopoly!

So, what is contextual targeting, how does it work, and why is it a surprisingly great solution for today’s digital advertiser? Read on to find out!

What is Contextual Targeting?

Contextual targeting works by serving ads on a website and/or webpage based on the content that page contains—essentially, it displays contextually relevant ads on pages that are likely to appeal to a target audience that would be interested in your organization’s products or service. So instead of tapping into user ID-based data that you’ve collected (or bought) to show ads to specific consumers, contextual targeting uses keywords or topics to reach consumers in the digital places they’re most likely to visit. 

Contextual targeting is a bit of a throwback, harkening back to mediums like linear TV, print, and terrestrial radio—in other words, places where third-party cookies do not exist. But the solution is much more adaptable in digital advertising settings, making it a sensible (if not increasingly critical) element of modern marketing strategies. Heck, even Google has embraced foundational elements of contextual targeting with its new Topics API, the search giant’s proposed solution to third-party cookie deprecation in its Chrome browser.

How Does Contextual Targeting Work?

Contextually relevant environments are found either through keywords or topics that have been provided by the advertiser. The publisher ultimately relies on these keywords or topics to ensure ads are being served in the correct environments. Basically, if that keyword or topic shows up on a website, your ad can be served there. 

Once you’ve selected your keywords and/or topics, contextual advertising technology scans webpage URLs, language/content, page structure, keywords, subpages, and more to determine the best match for your advertisements. You can also add additional parameters in a demand side platform (DSP) like dayparting, bids, geos, ad unit type, and even cross-device targeting. From there, all you have to do is submit a programmatic bid through your DSP to place your ad on any contextually relevant pages—and with more than 1.3 billion webpages of available inventory, you can get as broad or specific as you want. 

Contextual targeting is typically seen as an ideal solution in more privacy-friendly browsers such as Firefox and Safari, or on privacy-minded operating systems like iOS. Digital advertisers can also take advantage of contextual targeting on connected TV (CTV), with solutions like Peer39.

Contextual Targeting and Privacy

Contextual targeting allows advertisers to reach their audiences in contextually relevant environments at the right place at the right time—all while respecting their privacy.

Since it doesn’t rely upon personal data, contextual targeting neatly sidesteps the entire privacy issue. That makes contextual a robust and compatible solution for a future where both legislators and browser makers are looking to give users more privacy. It also adds an additional layer of filtering for page quality, helping boost your brand safety by avoiding lower-quality content and pages that don’t align with your brand standards.

Additionally, while it may not be at the top of some organizations’ motivating factors when choosing a targeting solution, contextual targeting is a much more comprehensible and palatable advertising method to people outside the ad industry, who can both grasp and accept the idea of seeing ads that are geared toward a specific situation rather than a specific person. Think of it this way: if you were describing the digital advertising industry to an octogenarian, would it be easier to explain contextual targeting or, say, cross-device programmatic retargeting?

That said, one of the more notable drawbacks of contextual targeting when compared to other methods of digital advertising is that it’s harder to both retarget specific users and to fully track results—particularly in industries with longer sales cycles. As with anything, there will inevitably be organizations that determine contextual targeting is not a fit in their larger digital advertising strategy. But for many (if not most) advertisers, contextual is well worth considering.

Contextual Targeting is Cost Effective

In addition to its privacy friendliness, contextual targeting comes with the added benefit of being significantly cheaper than most user ID-based targeting solutions. While the CPM for user ID-based ads can run between $1-2, the CPM for a contextual ad display placement can be as low as 5-10 cents—in other words, you only need your contextual ads to be 10% as effective to see the same results.

Granted, this number ultimately depends on how niche the audience—and how competitive the placement—but those same principles can apply to just about any ad targeting type. The important takeaway is that, on the aggregate, contextual targeting is likely to be more cost efficient than user ID-based targeting.

Learn More About Contextual Targeting in 2022

With third-party cookie deprecation just over the horizon and both users and regulators showing increasing concerns around privacy, contextual targeting provides a practical, effective, and digestible solution that helps brands reach their audiences.

Want to learn even more about contextual targeting——including how the technology has evolved over time and the major players in the space? Check out our Contextual Essentials course, a free on-demand certification course that covers all you need to know about this increasingly important aspect of digital advertising.

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