We seem to say this every year, but there’s a great deal of change afoot for digital marketers right now – with the ever-increasing privacy regulations and the demise of third-party cookies just two examples of the change. Most recently, China confirmed that it will restrict how tech firms collect user data, while of course Google confirmed it will switch off third-party cookies, albeit later than originally planned.  

Despite these changes, one thing that remains firmly on the marketing agenda is contextual advertising. In fact, almost two-thirds (65%) of UK consumers have a more favourable opinion of the brands that serve them contextually relevant ads. What’s more, more than eight in ten (81%) prefer to see ads that align with the content they are consuming. But what exactly is contextually-based advertising?

Getting to grips with contextual 

Essentially, contextual understanding – across display, mobile, video, DOOH or other formats – enables programmatic buyers to target ad inventory that is relevant to the content or environment being consumed. 

Contextual targeting involves advertisers placing their ads based on its relevance to the content of a web page, or as an audience proxy – an exciting and highly effective alternative to audience targeting reliant on third-party cookies. This provides consumers with a better ad experience, and also allows brands to target audiences effectively.   

However, contextual advertising has evolved into a more effective way for brands to capture the emotion of their audience. Modern-day contextual targeting is now ‘contextual intelligence’, which relies on machine learning and cognitive technologies, such as natural language processing, to achieve more accurate and granular categorisation of content, and more dynamic content at the page level. 

It also offers increased capabilities for localisation, translating copy into different languages without losing or detracting from the sentiment of the ad campaign. Additionally, natural language processing allows for more human-like comprehension of how well an ad will sit within a particular environment, by analysing the potential impact of subtle linguistic nuances such as changes to tense or punctuation.

With technologies being sophisticated enough to control how a message is presented in various contexts, advertisers now have far greater agility when it comes to planning and executing their campaigns.

The benefits for brands

Safety: Crucially, contextual advertising allows for more sophisticated analysis, including the mitigation of brand risk and ‘malgorithms’, when the contextual meaning between a page and display ad becomes misaligned. This helps to improve brand safety and suitability for advertisers, which has become increasingly important in recent years. 

Awareness: Serving contextually relevant ads to a target audience will heighten brand recognition and bolster engagement. 

Performance: For those using programmatic in particular, contextual advertising has been shown to significantly improve performance metrics such as clicks and conversions. 

These benefits are possible because advertisers can drill down into the context and emotion of their ad placements in real time, while ensuring they comply with the brand’s specific safety guidelines. 

What’s more, utilising contextual via first-party data is a more cost-efficient and scalable way of targeting inferred audiences compared to ID solutions, given no single unique identifier is commonly adopted at scale by either the buy side or sell side. As such, an increasing number of brand marketers are adopting this approach as they begin to future-proof their campaigns in readiness for a world without (third-party) cookies. 

The benefits for consumers 

Relevance: Ads are far more likely to resonate with consumers if they are enjoying the overall content experience, rather than feeling frustrated by an ad that is irrelevant or intrusive. Contextual advertising helps advertisers to understand sentiment – for instance, positive, neutral or negative – and therefore ensure that ads are reaching consumers in the right moment and mindset.

Privacy: Consumers are far more receptive to brands who put their privacy first. Fortunately, gone are the days when advertisers needed to extensively mine third-party data to provide sufficiently relevant ads. Now, contextual advertising allows advertisers to serve the most relevant ads, without the need to ask for any PII (Personally Identifiable Information). By merging content classification with first-party transaction data, advertisers can connect consumer intent with the content they consume on-screen to achieve just the right level of contextual relevance, but in a privacy compliant way. 

Looking ahead, with UK marketing budgets beginning to increase for the first time since the beginning of the pandemic, now is the time for brands to tap into the power of emotion and semantics to deliver contextually relevant ads. This will be vital to develop long-term consumer relationships and drive competitive advantage.