What Is Contextual Targeting in Advertising? [How It Works]

Contextual targeting uses display ads based on a website’s content. It’s smart for companies to place their ads where they expect their target audience to be—this practice ensures that your advertisements reach the right customers. Having a toy ad in a children’s magazine makes sense, but how do you do that with digital ads? 

That’s where contextual targeting comes in. This type of online advertising involves determining the content on a website and matching the ads to it. For example, a website about men’s health might not have ads about women’s shoes but ads that fit naturally with the content on the page.

How Does Contextual Targeting Work?

Contextual targeting starts with a company providing keywords, topics, languages, or locations its product focuses on. These become the parameters for contextual targeting.

For example, suppose you own a bicycle company and want to advertise your newest bike. In that case, your contextual targeting provider will recognize websites with content about bicycles and place your ad. By using contextual targeting, you guarantee your ads are relevant to the webpage they appear on. This way, the ad isn’t disruptive to the user experience, making your target audience more likely to respond positively to your ad.

Companies may also provide negative keywords as part of a contextual advertising campaign. These will give your ads more focus by creating categories of websites your company does not want the ad to appear on. For example, an airline could avoid placing ads on sites reporting plane crashes by including negative keywords connected to that topic.

Then, crawlers scan the website and categorize each page based on context and semantics. When a user visits a page, the page content information is relayed to the ad server, matching, which matches relevant display advertisements for that keyword and user intent.

How Effective is Contextual Targeting Advertising?

Contextual ads are meant to complement the content they are going next to. Rather than feeling disruptive or out-of-place, contextual ads should feel natural to the website they are placed on. Because of this, contextual ads have been shown to boost purchase intent by 63% and recommendation intent by 83% over ads targeted at the audience level.

4 Examples of Contextual Targeting

Because contextual targeting campaigns are customized specifically to each industry and business, there is no one-size-fits-all solution for a contextual targeting campaign. Rather than giving you one example to represent all contextual targeting, here are a few major industries and how contextual targeting can be effective for each.

1. Medical

You typically have a particular target audience for health, fitness, pharmaceutical, or medical ad campaigns. Contextual targeting is all about placing a relevant ad in front of the right person at the right time. 

With a contextual targeting campaign, a pharmaceutical company that offers a drug to help manage Type 1 Diabetes can ensure its ad is placed alongside content and websites about Type 1 Diabetes. This strategy can be duplicated for everything from allergies to orthopedics.

2. Food service

Catering is directly related to events and is sometimes treated as an afterthought or entirely forgotten. With contextual targeting, a catering company can ensure that an ad for its services is placed alongside content about wedding receptions, bar mitzvahs, funerals, or birthdays.

Putting an ad alongside event planning content can serve as a gentle reminder to potential customers (who are already searching) to remember to include catering for their event. 

3. Retail

The retail space is very competitive, so contextual targeting can be a powerful tool for ensuring a company’s product is placed on the right page to match its brand. For example, a company that sells exercise clothes can pair its product with health, diet, and exercise content.

4. Home service

With contextual targeting, home services like plumbing, electrical, or HVAC repair or maintenance can capitalize on specific events in a homeowner’s life. When an individual lands on content about “broken air conditioners” or “frozen pipes,” contextual targeting ensures that local service providers are seen as potential solutions.

What Is the Difference Between Contextual Targeting and Behavioral Targeting?

Behavioral targeting differs from contextual targeting because it focuses on targeting individuals by matching ads to specific customers. Contextual targeting, on the other hand, focuses on websites and matching specific ads with websites.

Behavioral targeting (audience targeting) focuses on customers based on their web-browsing behavior, including visited pages, searches performed, links clicked, and products purchased. It can even include mobile and physical store data, such as location and in-store purchases.

With all that information, behavior targeting creates defined audience segments that allow advertisers to target the segments with specific, relevant ads based on their browsing and purchase history. Behavioral targeting aims to target shoppers at the right moment when they are most likely to make a purchase.

Why Use Contextual Targeting To Advertise?

1. Ease and affordability

One of the most significant benefits of contextual advertising is that it is easier and more affordable to implement. Behavioral advertising relies on lots of data, which means you have to use tools to collect and analyze it and create meaningful strategies to use it. Contextual targeting doesn’t require much investment but still provides relevant and targeted advertising. 

2. Brand protection and brand perception

The websites your ads appear on can affect how your brand is viewed. Contextual targeting helps protect your brand because there is almost no risk of placing advertisements in non-brand-safe environments like political, adult-themed, or controversial websites. 

3. In-the-moment relevance

Another way contextual targeting has an edge over behavioral advertising is by providing relevant ads for what customers are actively experiencing. Just because a customer has researched a topic a few times does not mean the topic is something they are actively interested in now. Contextual targeting understands that people change their habits. It aims to introduce new habits and thoughts into consumer patterns without restricting their viewing of advertisements.

4. Better customer ad experience

Think about your own online behavior. Are there some sites you avoid visiting because you know they are swarming with ads? Say you want a recipe to help you cook dinner, but first, you have to scroll past a handful of advertisements for unrelated products. That frustration and annoyance is called ad fatigue; contextual targeting can help reduce it in your audience. Because contextual ads are placed in a relevant environment, the ads don’t seem cumbersome, unwanted, or annoying. Ads are only shared if they are relevant to the website and meaningful to the content. 

5. No personal customer information required

Another benefit of contextual ads is that they are independent of the customer’s personal information. Because there are limits to how third-party cookies track web traffic and online habits, especially since the General Data Protection Regulation (GDPR) was enacted, behavioral targeting is becoming increasingly difficult. On the other hand, contextual advertising is a privacy-friendly practice that doesn’t have to deal with complex compliance issues surrounding personal data.

What Is Contextual Retargeting?

In general, retargeting is advertising on sites your bounced traffic visits. If a visitor to your site leaves and lands on another site, a retargeting ad appears to try to send them back to your site.

Contextual retargeting takes generic retargeting to the next level. Ads are shown to previous site visitors but in a relevant context. Instead of appearing on an online dictionary, an advertisement for a furniture store will appear on an interior designer’s blog or another site in the contextual retargeting network.

Contextual retargeting works because sites cooperate to offer different but related products to the same target audience. This process makes it more likely that each advertiser will convert since potential customers have already shown high interest in the topic.

How Does Contextual Targeting Fit Into Programmatic Advertising?

Programmatic advertising is the automated process of buying ads. Rather than dealing with buying and selling ads through salespeople, programmatic advertising technology makes the entire process more efficient and effective. 

Contextual targeting is one aspect of programmatic advertising. Programs allow companies to establish the keywords, target content, and other parameters they want their ads to match, and there is no need to perform some traditionally menial tasks, such as approaching websites directly.

Contextual targeting can work as a stand-alone campaign or be part of an entire programmatic advertising campaign. 

Learn More

With Agility’s platform, you can access contextual targeting and its many benefits. Learn more about what Agility can do for your company to help you reach your goals.