As advancements in technology make personalized, targeted ads more relevant to consumers, contextual targeting has taken a back seat to data-rich advertising. However, thanks to the arrival of the General Data Protection Regulation (GDPR) in Europe, contextual targeting is making a comeback.
Changes such as GDPR and the forthcoming California Consumer Privacy Act (CCPA) are making advertisers think twice about using personal data for profiling due to the risks associated with non-compliance, and contextual targeting therefore has a certain appeal. What’s more, as providers such as Apple and Android change their operating systems to make it difficult for cookie IDs to be used across mobile devices, the industry needs to explore other options.
Contextual targeting is one option. It provides an opportunity for advertisers to improve user experience by ensuring the ad served is relevant to the content on the screen. When readers are absorbed in content, contextual targeting prevents the appearance of ads that would be out of place in the moment, even if those ads may be relevant to reader interests or historical behaviour.
In addition to providing a more immediately relevant ad experience, contextual targeting allows readers to find related information via advertising, or discover something relevant to the content they are consuming. With more sophisticated arrangements, contextual signals can provide insight into the audience’s mood or frame of mind and predict their receptiveness to messaging. Contextual targeting can also help to ensure ads are served in an appropriate, brand safe environment, and is most effective when coupled with good, engaging creative
Contextual advertising has seen some recent success. After implementation of the GDPR, the New York Times decided to stop behavioral targeting on its European pages to limit risk, and relied instead on contextual and geographical targeting. The publication has reported no subsequent drop in ad revenues, although it’s unclear that smaller, less prominent publishers with lower advertiser demand would experience the same results.
In 2018, a post-GDPR study from Roast compared contextual with third-party data targeting. The study revealed that audience targeting only marginally outperformed contextual in click-through rates and three second in-view rates. But these results come with an asterisk, as contextual targeting in this case was achieved through the use of a whitelist of relevant websites. Advertisers implementing a restrictive whitelist are likely to miss out on valuable inventory, thereby limiting their access to highly engaged audiences.
Advertisers need to understand which inventory sources return the best results for their brand when there’s no cookie data bundled in an ad request. Then, they’ll need to determine how they can align their messaging more thoughtfully and strategically with those inventory sources. This often requires broadening their reach and looking to alternative sources of unique premium inventory to find that contextual match.
The right inventory, right time, and right place approach that contextual targeting relies on can certainly complement audience-based advertising—or provide an alternative form of targeting if there is no user data available. That said, there is currently no substitute for using in-depth user knowledge to deliver relevant messaging alongside premium content.