Contextual advertising tailors ads to the environment in which a user is browsing. Since ads are served based on the interest of the user, they are hyper-relevant, tapping into that user’s current frame of mind. Contextual targeting does this by using algorithms to select the advertisements based on keywords, website content, and other metadata.
In a discussion for the How Agencies Thrive podcast, we’re joined by StackAdapt’s Yang Han, Vitaly Pecherskiy, and Ned Dimitrov to explore the future of contextual advertising. They discuss current contextual advertising technology, industry trends to look out for in 2022, and the bright future of contextual ads within the programmatic landscape.
Read on to learn 3 key insights from our discussion, or listen to the full episode, here.
Contextual Advertising is Increasingly Relevant
According to Yang, contextual advertising is quickly gaining relevance because it offers marketers an opportunity to diversify their methodologies and experiment with new marketing strategies. Rather than relying on historical user data, contextual targeting leverages information like page content and device for targeting. Yang says that if you’re able to understand exactly what a user is reading about and exactly what their state of mind is in; leveraging a contextual advertising strategy can be powerful.
Vitaly adds that contextual advertising is in the spotlight now because it aligns with upcoming trends and policy changes, giving marketers peace of mind when it comes to what data they are using for targeting. The best part is, this targeting method is now so advanced that it drives on par, and even better results than traditional behavioural targeting.
Modern Contextual Advertising Leverages New Technology
Ned says contextual advertising has been around for a while because it offers a natural way to place your ad around relevant content that aligns with your message. What makes the contextual advertising of today different is the application of many new artificial intelligence (AI) technologies.
Ned explains that computational power has grown significantly in the past decade, and more tools have developed to handle natural language processing. This means technology can now capture the actual meaning of content rather than just raw text. This is what makes contextual advertising so exciting. It’s now possible for tech, with just a few phrases, to capture the meaning that advertisers have behind their content.
Contextual advertising has also become more efficient and scalable. It can automatically identify relevant phrases and place ads on relevant pages that a marketer didn’t necessarily research themselves—the AI does the work to identify the pages. This helps with scale and specificity; and solves the problems that the original contextual targeting methods had.
Contextual Targeting Drives Performance
According to Vitaly, contextual targeting is all about performance. Marketers should be exploring how to add it to their media plans with a strategy that drives results. No marketer can rely on a one-size-fits-all strategy, so it’s important to experiment with different approaches.
One tip Vitaly has? Don’t arbitrarily split up budgets. Instead, set placeholders and optimize based on the performance of different tactics. If this is done with contextual advertising, marketers can identify how to best leverage this targeting methodology.
Ned emphasizes that marketers should think about contextual advertising’s unique and powerful benefits, and leverage those for performance. With contextual, marketers can reach users when they are in a receptive frame of mind. When a person is browsing content about a specific topic, it signals their intent at that moment. Rather than being targeted based on past actions, they are targeted based on their immediate frame of mind.
Listen to How Agencies Thrive For More!
Yang says that the future of contextual advertising is looking bright. We can expect to see innovation in two specific areas: the transparency of it, and it’s ability to adjust and learn. As the algorithms and AI capabilities improve, it’ll become more possible to see what types of pages will be targeted. And, we’ll likely see improved reporting, so that marketers can make campaign adjustments based on performance metrics.
To hear more of what Vitaly, Yang, and Ned have to say about contextual advertising, tune in to the latest episode of How Agencies Thrive!