3 Myths About Contextual Advertising

Contextual advertising is enjoying a resurgence as advertisers seek ways to tailor ads to audiences without relying on personal data. But with the shift from behavioral and demographic targeting to contextual, many advertisers understandably worry that they are returning to a decades-old and less effective form of advertising.

This has led to some persistent myths about contextual targeting. For example: Contextual targeting is great for privacy, but it isn’t as effective as behavioral. Contextual targeting is just matching ad content to publisher domains. Or: contextual advertising means giving up behavioral advertising.

Here’s why all three of these myths are worth challenging as advertisers reconsider their digital strategies for a privacy-adjusted era.

Contextual targeting is possibly more effective than behavioral

The notion that contextual targeting is less effective than behavioral hinges on the assumption that to be effective, ads must be tailored to online users who have browsed a product or a brand before — or whose demographics lead advertisers to believe they are likely to be in the market for the advertised product or service. The past decade of digital advertising has traded on this precise notion.

But the data tells a more complicated picture. For example, new data based on analysis of billions in ad spend by the marketing measurement firm Analytic Partners found that contextual targeting is 1.2x to 2.5 more effective than hyper-targeting based on audiences’ first-party data at similar cost.

Why? For one, behavioral and demographic targeting is often based on low-quality data. This leads to people receiving targeted ads that do not speak to them. Secondly, targeting users who have browsed your products before may lead to a high conversion rate without driving incremental gains, whereas contextual targeting allows advertisers to reach broad swaths of new audiences likelier than average to be interested in their products.

Contextual advertising transcends content matching

When many in advertising think of contextual, they likely think of a classic use case like someone reading about running getting served a Nike ad (this is my go-to basic example). This can lead to questions about efficacy.

But contextual targeting can go beyond that. For example, companies like Reset Digital are performing contextual targeting based on emotion. AI can help advertisers identify the emotional overtones of ads and content, allowing advertisers to reach audiences who are in the ideal emotional state to discover a new product and possibly make a purchase.

Contextual targeting is also getting a lot more sophisticated in its ability to parse language thanks to developments in natural language processing and AI. The days of matching an advertiser to a publisher domain are ending. Instead, advertisers can match content more granularly to articles or videos.

Behavioral won’t die due to contextual’s rise

The third myth about contextual advertising is that it presupposes the death of behavioral. But advertisers do not need to choose one or the other — context or audience data-driven targeting.

As Advanced Contextual told Street Fight, contextual is not replacing behavioral ads. It’s enhancing them, allowing advertisers to pair contextual targeting with first-party data and campaign KPIs to optimize performance.

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Joe Zappa is the Managing Editor of Street Fight. He has spearheaded the newsroom's editorial operations since 2018. Joe is an ad/martech veteran who has covered the space since 2015 and regularly consults with companies in the space on content and communications. You can contact him at jzappa@streetfightmag.com.