Ad relevancy is critical in attracting new audiences, which is how contextual advertising and AI can help. Together, these two tools can get your ads in front of your target audiences in the right place and at the right time based on the content they consume.
In this blog post, Ignite Visibility’s VP of Paid Media, Meghan Parsons, will talk all about contextual AI advertising and how you can use it to get the most from your ad campaigns.
What You’ll Learn:
- The Fundamentals of Contextual Advertising
- The Role of AI in Contextual Advertising
- How Does Contextual Advertising Work?
- Examples of Contextual Advertising in Action
- Common Challenges and How to Overcome Them
An Introduction to Contextual Advertising
Today’s advertising strategies must align with user intent without intruding on people’s privacy. Although Google has abandoned its plans to phase out third-party cookies (for now), the search engine giant and other companies emphasize privacy-first ad solutions, especially as more consumers become increasingly concerned with how businesses use their data.
Enter contextual targeting advertising, which balances privacy with effective ad targeting.
What Is Contextual Advertising?
So, what is contextual targeting, and what are contextual ads, exactly?
Contextual advertising is the practice of placing ads based on the context of the pages and other media where they appear, as opposed to traditional placement criteria such as user data and location.
Ads show up based on the type of content users are currently viewing, including search engine queries and social media activity. For example, an ad for accounting software might appear in an article about personal finance.
Contextually targeted ads differ from traditional ad placements in that they emphasize the user’s real-time content consumption rather than past browsing history, demographic data, and location.
This allows advertisers to target consumers based on their immediate interests and match ad campaigns to the tone and sentiment of accompanying content. More and more advertisers are adopting this technology because users view it as less intrusive than traditional demographic and/or cookie-based marketing strategies.
AI can greatly enhance the targeting power of contextual advertising by allowing for precise, brand-safe, and privacy-compliant user segmentation and optimized ad placement.
My Expert Opinion on Contextual Advertising and AI
Contextual advertising is a privacy-first and user-centric approach to online advertising, helping you reach the right audiences where they spend their time.
With growing privacy concerns and a desire for more personalized digital experiences, leading digital marketers emphasize the use of contextual targeting. In fact, a Mckinsey & Company study concluded that around 71% of consumers want personalized experiences, with 76% actually experiencing frustration without them.
Artificial intelligence (AI) plays a vital role in contextual advertising. AI tools help with everything from audience analytics and predictive analysis to programmatic advertising bids.
Be sure to adapt this technology early, otherwise, you could easily find yourself falling behind more savvy competitors.
The Fundamentals of Contextual Advertising
Contextual AI advertising involves matching ads to the content of users’ web pages based on their relevance.
Examples of AI audience targeting tools:
- Google Ads
- Advanced Contextual
- Oracle Contextual Intelligence
- Adsterra
Google Ads is particularly effective at using contextual AI. It works by using Google’s system to identify the main theme of every web page, followed by matching that page to an appropriately themed ad. Specifically, contextual targeting occurs when ad groups share topics or keywords with the corresponding web page using the Google Display Network.
These tools provide not only keyword-based matching but also semantic analysis (the overall meaning of page content), the recognition of relevant people and places, and real-time dynamic content analysis for page-specific ad delivery.
First, let’s consider the differences between contextual targeting vs. behavioral targeting.
Contextual Targeting vs. Behavioral Targeting
While contextual targeting advertising allows advertisers to tailor content based on current site content, behavioral targeting relies on users’ browsing history and demographic information to serve personalized ads.
Contextual targeting does not require this user information and can subsequently ensure ad relevance without the use of cookies or other personal data, making it the preferred privacy-first approach to advertising.
This approach can reduce overall ad spend, as it doesn’t require extensive user data collection—it may also reach a broader audience interested in a specific topic, even users who aren’t actively searching for a particular product.
On the downside, contextual AI targeting limits personalization, could reduce accuracy when targeting the wrong content, and doesn’t offer the kind of granular control you get with behavioral targeting.
Meanwhile, advantages of behavioral targeting include increased personalization of targeted ads to very specific user demographics. The use of historical user data based on past behavior can provide predictive insights for future purchasing intent.
However, behavioral targeting is limited in its ability to land relevant placements and is also more intrusive, making it less privacy-oriented.
The Role of AI in Contextual Advertising
Artificial intelligence is integral to contextual advertising. Specifically, contextual AI analyzes page content, keywords, and semantics on websites to determine ad placement.
With the help of machine learning, large language models (LLMs), and other tools, AI “understands” the content and how to match it to an appropriate ad.
AI audience targeting also segments audiences to improve ad personalization. For example, it might segment audiences based on demographics such as age, gender, interests, and other data.
Many businesses have benefitted from using contextual AI in various campaigns. For instance, 76% of healthcare ad campaigns using StackAdapt contextual ads outperformed traditional retargeting efforts. The end result was a significant reduction in cost per acquisition (CPA).
One big franchise, Starbucks, has also seen success with its own AI platform, Deep Brew. Using AI audience targeting, Deep Brew is able to push personalized marketing, product recommendations, and promotions both in-app and in-store.
How Does Contextual Advertising Work?
Contextual advertising works in several critical steps, Here is an overview of each:
1. Select Keywords and Topics
To begin with, you’ll want to select specific keywords and topics to target with your ads. There are some differences between the two to keep in mind:
- Keyword-based Targeting: This model works by placing ads based on specific keywords in the content. For instance, on an interior design blog, home- and other property-related long-tail keywords could indicate a good placement for real estate property ads.
- Topic-based Targeting: You can also place ads that match the overall themes of web pages. An example here might be a medical blog with certain pages targeting specific medical conditions, which a pharmaceutical brand might use to advertise a particular treatment.
2. Analyzing Web Pages
After you’ve selected your target keywords or topics, Google Ads and other platforms will analyze various web pages to find matching content with similar keywords or topics.
In determining each page’s theme, contextual advertising tools look at multiple factors, such as text, link structure, language, and page structure.
3. Ad Placement
The penultimate step involves ad placement, as your tools go to work matching your ads to the right content. It will work either by matching ads to content based on keywords or topics, but whether your ad actually appears will depend on location, language, and other targeting options.
4. Inclusive vs Exclusive Targeting
Depending on your campaign, you might target your ads based on inclusive or exclusive targeting models.
Inclusive targeting would entail determining which placements, topics, and keywords match your ads, while exclusive targeting would use various placement, topic, keyword, content labels, and content or inventory type exclusions, only serving ads to places that don’t have those exclusions.
Examples of Contextual Advertising in Action
Let’s examine some contextual advertising examples to highlight its success:
The Healthcare Industry
One industry that can benefit from contextual advertising is the healthcare sector. Clinics, hospitals, pharmaceutical brands, and others can use contextual ads to reach people on websites providing medical information.
In one contextual advertising example, Johnson & Johnson’s ads appear to advertise the brand on WebMD’s homepage. Many other related brands likely advertise on this website based on a combination of topic-, keyword-, and semantic-based targeting.
The Ecommerce Industry
Online retailers can also benefit from these ads.
One contextual advertising example is Olay, which has product ads on fashion websites like Women’s Health, connecting with audiences more inclined to buy cosmetics.
Meanwhile, the New York Times has ads that might appeal to its readers based on certain sections. One ad for discounted eyeglasses appeared in a banner ad in the website’s Books section, appealing to readers who may be in the market for reading or other eyeglasses.
Common Challenges and How to Overcome Them
There are potential challenges you may face with contextual advertising that you’ll need to circumnavigate.
These challenges may entail:
Misaligned Targeting
Poorly optimized AI that doesn’t properly assess semantics, content, or keywords could cause misaligned ad targeting.
To avoid this issue, use cutting-edge tools to help with AI optimization, including Google Ads. Do your research on the best tools and figure out which ones are likely to yield the best results.
Inaccurate Performance Measurement
You or your tools may also fail to effectively measure performance. Make sure the metrics you use to assess performance align with your business goals. Think of what kinds of impressions, clicks, or conversions you want to get with your ads, which will give you a baseline to go by.
To optimize performance, engage in continuous monitoring and measurement, generating meaningful reports. The insights you gather can then inform your future campaigns, or you might discover that there’s an issue with your platform.
An Imbalance of Privacy With Effectiveness
Contextual ads help maintain users’ privacy while benefitting advertisers. Make sure you maintain transparent metrics and detail how you use their data for advertising in a privacy policy on your website.
Master Contextual Advertising With Ignite Visibility
To reap the benefits of AI-powered PPC advertising, including contextual AI targeting, look to the experts at Ignite Visibility for help. We can work with your brand to put together the ideal campaign based on your goals and audience.
When you turn to us for contextual ad campaigns, you’ll get:
- High-quality ad creation to impress your audiences
- Optimized visuals and messaging that reach different audience segments
- Access to contextual ad platforms that work based on your campaign inputs
- Continual reporting and optimization for maximized conversions and sales
- And much more!
If that sounds like a plan, don’t hesitate to contact us for help with your next campaign.
