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

Contextual targeting is the use of display ads based on a website’s content. It’s a smart idea for companies to place their ads where they expect their target audience to be—this practice ensures that your advertisements are reaching 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 the content. That way, a website about men’s health doesn’t have ads about women’s shoes, but rather ads that fit naturally and with the content on the page.

How Does Contextual Targeting Work?

Contextual targeting starts with a company providing keywords, topics, languages, or locations that their product is focused around. These become the parameters for contextual targeting.

For example, suppose you own a bicycle company and want to place ads about your newest bike. In that case, your contextual targeting provider will recognize websites that have 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 it more likely your target audience will 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 that report on plane crashes by including negative keywords connected to that topic.

Then, crawlers will scan the website and categorize each page based on context and semantics. When a user visits the page, the page content information will be relayed to the ad server which will then match 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

When it comes to health, fitness, pharmaceutical, or medical ad campaigns, you typically have a very specific target audience. 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 provides a drug that can help manage Type 1 Diabetes will be able to ensure their ad is placed alongside content and websites about Type 1 Diabetes. This strategy can be duplicated with everything from allergies to orthopedics.

2. Food service

Catering is directly tied to events and is sometimes treated as an afterthought or entirely forgotten about. With contextual targeting, a catering company can ensure that an ad for their 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, and that’s why contextual targeting can be a powerful tool to make sure a company’s product is placed on the right page to match their brand. For example, a company that sells exercise clothes is able to pair their product with health, diet, and exercise content. 

4. Home service

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

What Is the Difference Between Contextual Targeting and Behavioral Targeting?

Behavioral targeting is different 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 (also known as audience targeting) focuses on customers based on web-browsing behavior, including things like pages visited, 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 of that information, behavior targeting then creates defined audience segments that allow advertisers to target the segments with specific, relevant ads based on their browsing and purchase history. The goal behind behavioral targeting is to target a shopper at the right moment, the moment when a shopper is most likely to make a purchase. 

Why Use Contextual Targeting To Advertise?

1. Ease and affordability

One of the biggest 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 that amount of investment but still provides relevant and targeted advertising. 

2. Brand protection and brand perception

The websites your ads appear on can play a role in 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 that it provides ads that are relevant for what customers are actively experiencing. Just because a customer researched a topic a few times does not mean the topic is something they are actively interested in at this moment. 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 ads for unrelated products. That frustration and annoyance is called ad fatigue, and 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. Contextual advertising, on the other hand, 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. This means that if a visitor to your site leaves and lands on another site, a retargeting ad appears with the aim of sending 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 an ad for a furniture store appearing on an online dictionary, it 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 conversions will happen for each advertiser since potential customers have already shown a high level of interest in the topic. 

How Does Contextual Targeting Fit Into Programmatic Advertising?

Programmatic advertising is the automated process of buying ads. Rather than having to deal 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 provide companies options to establish the keywords, target content, and other parameters they want their ad to match, and there is no need to get bogged down with some of the traditionally menial tasks, such as approaching websites directly. 

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

Learn More

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