Why Agencies Should Care About Contextual Advertising Effectiveness in 2023

With behavioral advertising facing major headwinds, the age of contextual advertising is upon us. An approach that connects consumers to ads based on the content they are viewing, contextual advertising (or targeting) is a way for brand promoters to find commonality with the modern consumer. IBM defines it this way:

Contextual advertising uses various factors to determine which content is most relevant to users when placing an ad. It targets potential customers by relying on context such as the content of a webpage, location or weather. Machine learning can apply data science to targeting and take these pieces of information to deliver the right ad to the right users.

Instead of mining for personal data, this method is a way to retain real-time relevancy and connect with consumers while avoiding privacy concerns. 

For example, a travel feature is displayed on a digital screen, highlighting the beautiful,  awe-inspiring coastal and mountainous landscape of Scotland. Alongside this story, a popular hotel brand advertises its all-inclusive, enchanting getaway packages. Or in another example: a weather report predicts an impending severe storm with high winds. A helpful big box hardware store ad is shown, promoting their line of weatherproofing products.  

This contextual advertising isn’t new, but we’re in a pivotal moment for digital advertising. Due to privacy concerns associated with third-party cookies, tech giants like Google have been under pressure for years to shift away from the cookie ad model. Although smaller browsers have already taken strides, Google Chrome is expected to completely change the game when it permanently gets rid of third-party cookies in the near future.

Contextual advertising is the strategy that seems built for the shifting digital ad landscape of 2023. As browsers quickly move away from using those third-party cookies, contextual advertising effectiveness is rising to the top and shifting into focus. Some estimates even predict the overall market size of contextual targeting doubling from 2021 to 2027, with advertisers expected to embrace the writing on the wall.

Going well beyond privacy concerns, the context-focused approach is more than just a port in a storm. When done effectively, contextual advertising is a conduit for more engaging brand promotion. The added dose of relevancy can improve brand recall by focusing on quality impressions, jettisoning the frustrating days of quantity-based approaches. Perhaps most importantly, context creates a more organic connection with a brand, helping advertisers reach high-value audiences minus the ad fatigue and frustrations often associated with behavioral advertising.

Understanding the Effectiveness of Contextual Advertising: The Expectations of the Modern Consumer

Even though consumers can be divided into countless categories and subcategories, a broad overview can give us some general insights into what they’re looking for. An article on Advertising Week reports on some key insights into the consumer:

• Many are dissatisfied with irrelevant ads
• Inappropriate surrounding content is a problem
• Intrusive ads cause discontent
• Over-targeting can turn consumers off

Many of the issues with modern advertising can be directly traced to behavioral approaches, which may illustrate why behavioral ads might have limited value in general. Consumers shy away from ads that are overly intrusive or seem too finely targeted, as such ads likely serve as a reminder that their online behavior is being watched.

Related: Comscore and Captivate Make the Case for Incremental Ad Spend in DOOH

Near the top of the list, however, the report notes that irrelevant ads were picked as one of the most prominent negatives by consumers. Such ads distract from the experience and can even tarnish the brand—instead of creating a consumer who is indifferent to the brand, an advertiser might inadvertently ensure they actively dislike it.

It’s also clear from the survey that consumers don’t approve when an ad is placed next to content that is inappropriate or simply doesn’t match. This suggests that consumers find the correlation between content and advertisement important, with an organic collaboration showcasing an advertising model that is in sync. As a consumer base becomes more and more aware of the advertising playing field, agencies are now under pressure to improve the experience.

The Advantages of Contextual Advertising

With the ad model in the process of shifting, contextual advertising offers attractive opportunities for brands. The benefits appear to be especially pronounced for advertisers looking to reach high-value customers, such as professionals who are back in the office or who now have a hybrid work life. Here are some of the encouraging advantages of contextual advertising and why agencies not only should—but must—care about this essential advertising strategy:

1. Contextual Advertising Works Well with a Quality-First Approach

The contextual approach is a renewed opportunity to focus on what consumers really want. Instead of being fed ads based on search behavior, which may or may not still be relevant to a viewer, a consumer will see ads directly related to the content they are actively consuming.

Since we know that consumers want more relevancy in their ads, this is a chance to satisfy refined consumer expectations while creating a more positive overall experience. In addition to viewing a high-quality ad, they also get a quality all-around experience that also reflects well on the brand. Even if a brand isn’t something they would immediately consider, the improved experience might give them higher brand recall and plant the seed for a future purchase.

This approach can also work in a variety of settings. When this is done well, a short elevator ride highlighted by relevant digital content gives a positive boost to a brand – one with a direct appeal to high-value decision makers with buying power.  

2.  Contextual Advertising Increases Brand Safety

Protecting a brand is an ongoing challenge for advertisers. While many piled into the cookie-based advertising model, brands were connected with content that didn’t fit at all. In many instances, brands started to run up against content that didn’t fit the intent of the advertisers, and in the worst cases, ads that were put in a position to tarnish the brand itself.

Trying to counter this dilemma, an assortment of brand safety technology was added to the mix, often leaving blank spots on the margins where ads were supposed to go. As we move into a cookie-less ad future, contextual advertising offers a much cleaner path forward. 

Whether an ad is displayed on a personal browser or on a digital screen in an office common area, brand security becomes much easier to achieve within the principles of contextual ad targeting. The right partner, with a wide-reaching network of reliable screens and high-value content, can guarantee a “brand safe” experience, ensuring brands can feel safe and reassured that their ads won’t run alongside anything graphic or in poor taste that could damage the brand. 

3.  Contextual Advertising Increases Immediate Brand Recognition 

There will likely be plenty of fresh studies that highlight contextual advertising effectiveness as the strategy comes back into bloom, but we already know quite a bit. Based on one industry study, viewers noticed an in-context ad more than twice as quickly as they noticed one lacking in context. This shows that when ads don’t match the content or the consumer’s lifestyle, their eye is slow in discovery.

Beyond expeditious engagement, purchase intent was also shown to be higher when ads had the appropriate context. In fact, purchase intent was 14% higher for survey respondents who were shown in-context ads. Brand favorability also experienced a significant uptick. In-context ads are not only better at drawing the eye, but the numbers suggest they have a wealth of other positive effects for a brand.

4. Contextual Advertising Is an Excellent Fit for the DOOH Market

One of the fastest-growing markets in digital advertising is DOOH (Digital Out of Home). Somewhat of a misnomer, the DOOH market simply means digital screens that a consumer might view outside of their home space or their personal devices; often, this can refer to digital screens within an apartment building or office space.

Related: CAPTIVATE Webinar: ALL Impressions Are NOT Created Equal

DOOH also can work hand-in-hand with a high-context advertising approach. Because the right  advertisers have the research-driven data to analyze income level, demographics, job titles, and other audience data at an office or an apartment, they have an easier time providing curated content alongside contextual advertising. Succinct ads can be featured alongside entertaining or newsworthy stories in elevators, hallways, and other common areas. While the content is curated and geared toward the right demographics, the ads can also be easily matched to provide a relevant experience.

The Effectiveness of Contextual Advertising Depends on   Exceptional Content and Purposeful Placement

There is ample incentive to partner with a company that curates just the right content that can satisfy high-value audiences. When someone looks at a digital screen that isn’t their own, the type of content being offered must be carefully selected to match the circumstances. If the supporting advertisements must be succinct and relevant, so must the content it’s paired with.

To maximize the potential of contextual targeting, expertly curated content that can turn heads over the long haul is the perfect way to prime the intended audience. Curated content can stay on top of developing consumer trends by:

• Linking ads to directly relevant information (e.g., weather, tech, sports, travel, music, health, stock market, entertainment etc.)
• Match content and ads on an ongoing basis
• Offer ad targeting without being intrusive

In many ways, the essential difference between behavioral and contextual advertising is the method of matching content to ads. While ads that don’t fit the content feel impersonal or dated – even if they’re based on someone’s search history – the in-context experience is much different. Content that is carefully chosen to fit the right demographics provides a fundamental advantage for advertisers hoping to generate a seamless consumer experience.

When this dynamic is properly choreographed for the intended demographic, the upside is clear: consumers are much quicker to revert their attention to both the content and the advertisement. Increased brand recall and higher levels of purchase intent are often the results of content and advertisements that fit the context.

Increase Your Brands’ Effectiveness with the Future of Digital Advertising

2023 is likely to be a pivotal year for digital advertising, with advertisers now embracing the benefits of moving away from the behavioral model and into a contextual model. Beyond the personal browser, advertisers are seeing opportunities to reach their intended audience on digital screens where today’s professionals live and work. As the cookie era of advertising winds down, consumers are looking to a future where ads are more relevant, less invasive, and more seamlessly integrated into great media content.

Agencies that preemptively embrace the advantages of contextual targeting put themselves on a path to enhanced brand safety and better brand recall. They are also in a position to take advantage of the growing market for advertising on common-space digital screens, which can offer a personalized experience without the drawbacks of third-party data mining. 

When done effectively, relevant content with expertly paired contextually relevant advertisements can be the ideal way to organically promote a brand. To see how Captivate’s network of curated content can connect you with the hard-to-reach audiences your clients value most, contact our team to get started.