insights

The Renaissance of Contextual Advertising

Since basically the beginning of marketing, brands have had two main methods of placing an advertisement in front of the people who are most likely to buy what it’s selling: Targeting based on audience and targeting based on context.

In the pre-digital era, audience-focused targeting boiled down to demographics. Determine who is the average reader of a given magazine or viewer of a particular television show, then serve ads accordingly. Contextual targeting further refined ad delivery, using the content surrounding the advertisement to determine its most logical placement. Airline spots appeared in the travel section, makeup ads went in the beauty pages, and marketers had a reasonably effective if rudimentary way of knowing that their ads were being seen by the right consumers—at least some of the time.

With the advent of the Internet, marketers’ audience-based targeting capabilities exploded in step with the availability of consumers’ digital data. Suddenly, instead of just understanding the average reader or viewer of a given medium, marketers had hyper-specific information about individual consumers. Instead of knowing merely their gender, age range and income bracket, marketers could track which websites users visited, what they clicked on, even their physical location. This reinvention of the audience-centered approach became known as behavioral targeting, and marketers found it (understandably) intoxicating. Who wouldn’t want to know the minute details of a consumer’s shopping habits when trying to make a brand more appealing to them? By comparison, contextual targeting seemed quaint and antiquated, and fell largely out of favor.

“The industry has gone down the audience targeting route in the past few years,” says Alexis Faulkner, head of Mindshare’s FAST UK. And until fairly recently, consumers didn’t seem to mind being the subject of marketers’ online scrutiny. A 2013 poll found that nearly 70 percent of consumers preferred having some web ads tailored to their interests, while only 4 percent had concerns about behavioral targeting. By 2017, an estimated 86 percent of programmatic advertising in Europe was using behavioral data. 

Since then, the digital marketing landscape has shifted dramatically. Fueled by a succession of data scandals, consumers have grown increasingly concerned about online privacy—and their governments have responded. In 2018, the European Union’s General Data Protection Regulation put into effect sweeping reforms to how personal data can be collected and used, and the new California Consumer Privacy Act promises to establish similar online privacy rights on this side of the Atlantic.

“It’s going to go global,” says Terrance Nixon, media supervisor for digital agency SapientRazorfish in Chicago. “It started in Europe, it’s already rippling here in the U.S., and I have no doubt that within the next five years our entire digital environment and approach will be completely different.”

Mobile browsing has also skyrocketed in recent years, now accounting for 63 percent of all web traffic—which poses an additional data-collection dilemma because mobile devices don’t use cookies, the favorite food of behavioral targeting.

As access to consumers’ personal data becomes more scarce, marketers find themselves returning to a tried-and-true technique that a few short years ago seemed passé: Context-based targeting. Because it doesn’t depend on personal data, contextual targeting avoids many of the regulatory hang-ups that have hamstrung behavioral targeting methods.

“Contextual targeting never went away, but its value has been made more tangible by GDPR,” said Jean-Paul Edwards, EMEA strategy and product development director for OMD. “Context has always been a filter, it’s just grown in importance.”

Contextual targeting has also changed with the times: Advances in artificial intelligence have given marketers a vastly more sophisticated view of the digital context in which their advertisements appear. Computer vision and semantic analysis enable marketers to see and understand the images, text and sentiments viewers are experiencing in real-time, placing highly relevant, brand-safe ads in the best possible on-screen locations.

The renaissance of contextual targeting has officially arrived, and its value to marketers will likely only increase in the near future. “Consumers will be smarter,” Nixon says. “Brands will have to be even smarter than they are, and contextual advertising is going to play the biggest role in that.”

Illustrations by Estudio Santa Rita