Contextual Advertising 2.0 – the Future of Programmatic

The Programmatic and Adtech industries often have to adapt to changes that result from the decisions of big market players (like Google’s switch to First Price Auction). Changes in law, like GDPR in 2017 or CCPA in 2020, have also had a big impact on the Advertising market, particularly in terms of development and where the future should be. A notable example is Ad Targeting; and the often overlooked Contextual Advertising 2.0.

What is Contextual Targeting and how does it work?

Contextual Advertising is based on a type of targeting. This type of ad targeting is nothing new as it was used earlier in Digital Marketing, but perhaps failed to gain traction. When we look at Google’s description of Contextual Targeting, this is a process that matches the content which is displayed on the page with a strictly profiled group of users. This targeting looks at the category or keywords of the page, which is being viewed by the user. After that, the Ad Server serves ads that are highly relevant to the content on the site. Users react much more positively to such ads because the content is adjusting to their current needs. A simple example, presented below, shows how it works in practice.

You want to be more active and have decided to buy a city bike. You look for some information about it on the Internet, ask friends who have such a bike; but your searches and enquiries come to nothing. After that, you move to discussion forums in search of advice. When surfing, you notice advertising for city bikes and decide to check them out. You do not feel irritated by the appearance of these ads, because they match what you need at this moment in time. This scenario is represented in the picture below:

This is a forum about bikes and there is a visible billboard, which shows a girl with a bike; together with information about the sales offers in the shop.

Contextual Advertising in 2018

The graphic below shows that already in 2018, Contextual Advertising was being used more often than Behaviour Targeting (aka audience targeting – a mode of segmenting users based on web browsing behaviour, such as web searches, pages visited or products purchased) or Geotargeting.

Brand Safety

Contextual Advertising solutions have an essential purpose, such as brand safety, which is a key core of Contextual Advertising. This is because Contextual Advertising is visible in those pages which are connected with content. Advertisers do not have to worry if their ads are visible on any suspicious sites, and can be sure that their ads are appearing with content that is right for their specific brand. For Advertisers and Publishers, brand safety has become much more important because it has an impact on inventory and its value. And that is why in the Programmatic world, this topic is being discussed on many levels. 

Contextual Advertising and the end of 3rd-party cookies

In addition to the idea of Contextual Advertising enjoying a revival because of GDPR and CCPA, this type of advertising will become more important in Programmatic because of the changes to 3rd party cookies: their removal from Firefox and Safari; and their removal from Google in two years’ time. Advertisers and Marketers need to find a way to get close to users, which means making ads more “personalized”. Contextual Advertising is a natural choice for the Ad Market because data about users is not collected. Nor is such data needed in order to present the right type of ads on the web.

Advertisers and Marketers need to find a way to get close to users, which means making ads more “personalized”.

A deeper use of targeting thanks to AI

Contextual Targeting can be seen as the future because of AI and technical developments. Advertisers and Publishers can use new Contextual Intelligence technologies which can provide a lot of new tools and new possibilities for reaching key audiences; and at the same time, they can protect their brand. This type of intelligence also provides insights into user engagement. AI technology, which will be used in this type of targeting, will help to create more precise Advertiser campaigns; and for Publishers, it will help to increase the value of their inventory.

Summary

Even though Contextual Targeting has played a role with Adtech for some time, we feel that only now has its time come. This is because Publishers and Advertisers have to find a new way of reaching users with their ads. This type of targeting may help to overcome losses, resulting from changes to privacy and 3rd party cookies. Thanks to technical developments, Contextual Targeting can be more friendly for users, and more practical for Publishers and Advertisers.