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Advertising
Published:
June 19, 2023
Updated:
January 24, 2024

The Complete Guide to Contextual Advertising in 2024

Gouri Sasidharan

The Complete Guide to Contextual Advertising in 2024

Published:
June 16, 2023
Updated:
January 24, 2024
Gouri Sasidharan

Highlights

These days, context is the key to capturing your audience’s attention. This means in the digital landscape, you’ll have to align with their current interests and make them think that the ad they are currently viewing on a web page applies to them. 

But to make their experience smoother, you need to make sure you respect their privacy and not bombard them with ads based on their previous search.

What if you can accommodate both?

Yes, contextual advertising is making a comeback.

Whether you're a seasoned marketer or just starting your advertising journey, this guide will provide you with useful insights and tips on how to create successful contextual advertising campaigns for CPG brands that truly resonate with your audience in 2023.

What is contextual advertising?

Contextual advertising is a form of online advertising that delivers targeted ads to users based on the context of the web page they are visiting or the keywords they are searching for. Instead of relying solely on demographic or user-specific data, contextual advertising considers the relevance of the content being viewed by the user at that moment.

A property ad on New York Times website

How does contextual advertising work?

The key principle behind contextual advertising is to display ads that align with the user's current interests or the webpage they are browsing. By analyzing the page's content, keywords, or other relevant factors, contextual advertising systems aim to match ads that are most likely to interest the user.

Here are some important aspects of contextual advertising:

1. Targeting based on content

Contextual advertising relies on the context of the web page to determine ad relevance. It analyzes factors such as keywords, phrases, topics, and metadata to understand the content and target ads accordingly. For example, if a user is reading an article about travel destinations, contextual advertising systems may display ads related to flights, hotels, or travel agencies.

How contextual targeting works

2. Real-time ad serving

Contextual advertising operates in real-time, delivering ads dynamically based on the user's current browsing activity. When a user loads a webpage or performs a search, the system quickly analyzes the context and selects relevant ads from a pool of options. This real-time decision-making ensures that the ads are highly targeted and timely.

3. Keyword analysis

Contextual advertising often incorporates keyword analysis to understand the materiality of a webpage or search query. By analyzing keywords in the content or search terms, the system determines the user's intent and displays ads that match those keywords. This helps in ensuring that the ads are aligned with the user's interests.

4. Ad formats and placements

Contextual advertising can use various ad formats and placements, including display ads, text-based ads, native ads, or video ads. The specific format and placement depend on the publisher's website and ad inventory. The goal is to seamlessly integrate the ads within the webpage to enhance user experience while driving engagement and conversions.

5. Ad network or platform

Contextual advertising can be facilitated through ad networks or platforms that connect advertisers with publishers. Advertisers provide their ads to the network or platform, along with relevant keywords or targeting criteria. The system then matches the ads with suitable web pages or search results where they are likely to be contextually relevant. A few popular platforms include Google Ads, Facebook Ads, Amazon Ads, and more.

6. Enhancing user experience

Contextual advertising aims to provide a positive user experience by delivering ads that are relevant to the user's current interests. By displaying ads that align with the content being viewed, users are more likely to find the ads informative and valuable. This can lead to higher engagement rates and improved overall ad effectiveness.

7. Privacy considerations

Contextual advertising typically focuses on analyzing content rather than relying on personal data. This approach can address some privacy concerns associated with other forms of targeted advertising that heavily rely on user-specific information. That’s why Google phased out cookies and is coming up with a more secure technology. However, it's essential for advertisers and publishers to adhere to privacy regulations and ensure data protection.

Why CPG brands should use contextual advertising more often?

Contextual advertising is highly relevant to Consumer Packaged Goods (CPG) brands. Here’s why:

1. Product relevance

CPG brands offer a wide range of products that are used in everyday life, such as food, beverages, household items, personal care products, and more. Contextual advertising allows CPG brands like yours to showcase your products in the most relevant environments. By aligning ads with content related to cooking, home organization, parenting, health, or lifestyle, CPG brands can increase the chances of reaching consumers who are engaged and interested in their products.

2. Targeting specific consumer needs 

Contextual advertising enables CPG brands to target specific consumer needs and preferences. By placing ads in contexts where consumers are seeking information or solutions related to their desired products, you can effectively reach your target audience. For example, displaying an ad for a new organic snack brand on a health and wellness website can engage health-conscious consumers who are actively looking for healthier snack options.

3. Influencing purchase decisions

CPG brands often compete for consumers' attention and purchase decisions in a crowded marketplace. Contextual advertising helps CPG brands cut through the noise and capture consumers' interest at the right moment. By displaying relevant ads during the consumer's online journey, from recipe websites to online shopping platforms, you can influence purchase decisions by providing the right message at the right time.

4. Enhancing brand awareness

Want to improve brand recall? Contextual advertising is an effective tool for building brand awareness among relevant audiences. By strategically placing ads in contexts that align with the brand's identity, values, and target market, CPG brands can create a strong brand presence. For instance, a sustainable cleaning product brand can showcase its eco-friendly products through ads placed on environmentally focused websites, enhancing its brand image and reaching like-minded consumers. 

5. Localization and personalization

CPG brands often have a localized or regional focus, and contextual advertising allows them to target specific markets effectively. By considering the local context, including language, culture, and regional preferences, you can tailor your ads to resonate with local consumers. Additionally, contextual advertising can also leverage personalization techniques to deliver more personalized ads based on factors like user location, demographics, or past purchase behavior.

6. Better results

Contextual advertising improves CPG brands’ outcomes and insights. Your brand can evaluate the effectiveness of its contextual advertising campaigns by tracking key metrics such as impressions, click-through rates, conversions, and return on ad spend (ROAS). These insights can inform your future campaign optimizations and marketing strategies, enabling you to continuously improve your advertising efforts.

Where can you run contextual advertising?

Contextual targeting offers various ways to effectively reach and engage your target audience. Here are some ways to utilize contextual advertising:

1. Google AdSense: AdSense uses contextual targeting to match ads with the content of the web page. For example, your brand is focused on nutritious food and you publish it on your website. Then AdSense may display ads related to recipes for a healthy salad, a health check-up, or even a cereal product.

2. Native advertising: It is a type of contextual advertising that shows sponsored content in the same format as the editorial content on the website. In simple terms, native advertising refers to integrating ads seamlessly into the content environment, resembling the form and function of the surrounding content. 

3. In-game and in-video advertising: In-game advertising involves displaying ads within video games, seamlessly integrated into the gameplay experience. For example, a racing game may feature billboards showcasing real-world brand advertisements along the virtual race track. In-video advertising refers to displaying ads within online videos. For example, YouTube.

NBA 2K22: The City is a basketball game based on National Basketball Association. If you watch the video closely, you would find popular brands like Puma and Nike featured in the trailer of this video game. This not only improves the gaming experience but also drives brand awareness.

4. Dynamic Creative Optimisation (DCO): It involves tailoring ad content and creative elements in real-time based on the context of the user or webpage. DCO allows advertisers to deliver personalized and highly relevant ads to individual users or specific web pages. 

Artwork Flow - creative automation cta banner

5. Conversational marketing: Conversational marketing leverages chatbots, messaging apps, or live chat functionalities to engage users in real-time conversations. Contextual advertising can be integrated into these conversations to provide relevant product recommendations, answer user queries, or guide users through the sales funnel. For example, a chatbot on a clothing retailer's website can ask users about their preferences and then provide personalized product suggestions based on their responses. 

Artwork Flow's chatbot

6. AI advertising: It can cooperate with all factors put into contextual advertising and use machine learning to learn how a user responds to an ad, allowing businesses to optimize content, grow engagement, and earn better outcomes in return.

Challenges

Every road has its bumps, and even contextual advertising has its own challenges.

1. Ad placement is inappropriate

One thing you have to ensure is that your ad should be relevant and placed appropriately on a website. Be careful not to place it in an irrelevant context and make sure the user mustn't feel offended, either about the context or its placement. 

Misplaced ad
The ad speaks for itself

2. Inch-to-inch competition

It is necessary to stand out in the race to capture your target audience’s attention. But when a group of ads is displayed on the webpage that also uses the same keywords as yours it is likely for the audience to miss out on your ad.

3. Ad-blocking programs 

With concerns about privacy and for a smoother experience, a part of the audience uses ad-blocking technology that blocks contextual ads on websites. This makes it difficult to reach your goal—that is your target audience. It reduces the chance of your ad being seen. To avoid this, there are a few practices you could adopt to make sure that your ad is reaching the right audience.

Wrapping up

Overall, contextual advertising offers a targeted and relevant approach to online advertising. By leveraging the power of context, CPG brands can also effectively reach and engage their target audience, ultimately driving brand growth and success.

Additionally, the phasing out of third-party cookies has created an opportunity for contextual advertising to shine as a privacy-friendly alternative. As the advertising landscape continues to evolve, finding the right balance between effective ad targeting and user privacy remains a priority for both advertisers and technology providers.

Are you looking to scale your creatives and optimize ad campaigns to maximize your ROI? Connect with the Artwork Flow team and learn more. 

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