What Does Contextual Advertising Mean? And Why It’s Important

Today’s digital landscape makes it easy to reach a wide audience. But serving ads to the wrong audience won’t deliver the best ROI. In some cases, it can actively hurt your brand.

Contextual advertising can drive powerful results when done correctly. But to do that, we need to define contextual advertising and detail its uses and benefits.

What Is Contextual Advertising?

Contextual advertising is the practice of placing targeted advertisements with relevant content. In digital marketing, that means advertising on the right websites, videos, and other online content. By doing so, you’ll reach an audience that’s more likely to click the ad and interact with it meaningfully.

How It Works in Digital Marketing

Many advertisers employ machine-learning programs to identify suitable content for their ads. At Channel Factory, we use contextual video targeting on YouTube to deliver ads where they’ll perform best.

Why Is Contextual Advertising Important?

Placing ads in the proper context helps provide the most return possible from your ad spend. In a recent study, we’ve found that 73% of consumers are more likely to buy something from an ad if it applies to the content they’re consuming. 

Contextual advertising also helps avoid negative connotations with your brand. In that same study, we discovered that 64% of users would develop negative views of a brand if it appears next to unsuitable content.

Mobile Contextual Advertising, Privacy, and Cookies

Similar to contextual advertising, many brands use browser cookies to track user behavior and deliver relevant ads. This is sometimes called behavioral advertising.

But privacy concerns continue to rise as more people adopt mobile devices. World governments are cracking down on data sharing. And with companies like Apple and Google changing their cookie policies, it’s more critical than ever to run ads based on context rather than behavior.

5 Notable Benefits of Contextual Advertising

Contextual advertising offers many benefits for advertisers.

1. More Relevant to the Target Audience 

Instead of wide-sweeping ads like billboards or print ads, contextual advertising reaches an audience already primed to interact with your brand.

2. More Reliable Than Behavioral Advertising

Personalization is a powerful tool in advertising. But past behavior isn’t always the best indicator of user intent. So even though a customer plays guitar, they probably won’t click a guitar shop’s ad on a recipe blog. In that context, they’re more likely to click ads for ingredients or cookware.

3. Easy and Affordable to Implement

Behavioral advertising requires a lot of data, which takes time and resources to collect and analyze. Contextual advertising uses different tech that doesn’t rely on sourcing data from users.

4. Not Limited By Policies and Legislation

Contextual advertising doesn’t rely on collecting data. As such, it doesn’t violate any policies set by governments, agencies, and platforms like Google or Apple.

5. Safer for Your Brand

You can avoid misaligning your ads with inappropriate content by using contextual advertising. That way, you can avoid negative associations made with your brand.

Contextual Advertising Examples

There are many ways advertisers align themselves to the right context. Here are several examples of contextual advertising:

  • Running shoe ads in a video about fitness and exercise
  • Ads for productivity software in an article about school tips for success
  • Ads for pool care products in an article about cleaning swimming pools
  • Pizza chains offering discount codes in family-friendly content
  • Ads for reading glasses on a book review website
  • Copywriting agencies sponsoring a YouTube channel about building websites
  • Ads for sugar-free cereal in a podcast about health and wellness
  • Wireless earbud ads during long-form video essays

Once you define your ideal customer, you can contextualize your marketing toward them.

How Effective Is Contextual Advertising?

Contextual advertising simply works. Here are some stats to consider:

Contextualize Your Ads for Optimized Revenue

Contextual advertising on a large scale requires specific tools and expert knowledge. If you need help to get started, reach out to Channel Factory for a custom YouTube advertising plan that positions your brand with the perfect audience and maximizes returns.

The Social Effect: How Video Consumption Trends Have Changed

The pandemic changed a lot about how we consume media. Web traffic blew up, and content consumption saw dramatic changes. But we wanted to know: Is video content on the rise?

We surveyed thousands of people across the globe to find out. And in our recent study The Social Effect, we uncover how video consumption trends and habits have changed from 2020 to 2022.

How Has the Pandemic Changed Video Content?

Before the pandemic, video made up roughly 73% of all internet traffic. That number is expected to increase to 82% in 2022. Video traffic comes from paid on-demand services (like Netflix, HBO Max, etc.) and user-generated content (YouTube, TikTok, etc.).

Content Quality

There’s a wider acceptance of “lower-quality” content, especially among younger audiences. A study published by YouTube noted that “traditional, TV-era markers of quality are less important to viewers than they once were.” Factors like high production values or famous actors don’t impact viewers’ preferences like they once did.

Blurring Lines Between Social Media and Traditional Entertainment

As we observed in our CES 2021 Advertising Takeaways, more people turned to social video content for entertainment. That trend continues today. We found that globally, 56% of consumers turn to YouTube to relax and watch entertaining videos. Other users stated they watch video content to boost their mood.

Do Consumers Prefer Video Content?

Digital video consumption continues growing at an incredible rate. You can see this reflected in how much social video platforms have grown:

According to Hubspot, people are more likely to pay attention to videos. With other forms of content (like blogs, ebooks, and podcasts), they’re more likely to skim through it or multitask.

3 Video Consumption Trends Among Millennials and Gen Zers

Video consumption trends are rapidly shifting. In The Social Effect, we’ve uncovered some interesting details about digital video consumption, which you can learn more about by downloading the full overview.

1. Increased Desire for Variety and Discovery

One of the top reasons people turn to social is to discover something new, unusual, and surprising. In what we call “The TikTok Effect,” users crave an element of discovery with the content they watch. Platforms like YouTube, Meta, and Snapchat cater to this by feeding users new content based on behavior algorithms.

2. More Product Research and Shopping

More consumers use social videos to research a brand or product. Often, they make buying decisions based on reviews and demonstrations they’ve watched.

26% of users we surveyed use social video to learn about a product. What’s more, 22% have shopped for products via social video ads in the past three years and that number is expected to continue growing.

3. Improved Moods After Digital Video Consumption

Some people associate social media and online videos with laziness, regret, or lack of productivity. But as Google points out, “In times of uncertainty, digital video can be a wellspring of positivity.”

At the height of the pandemic, people watched YouTube videos to boost their mood. That trend continues, with 35% of adults saying they feel better after watching video content online.

How You Can Capitalize On Video Consumption Trends

Advertisers can take advantage of these video consumption trends by doing these two things:

You can work with a partner like Channel Factory to ensure your video ads are surrounding suitable content. Contact us today to learn more and get your best-performing ad campaign yet.

And if you want to know more about video consumption trends, download our complete overview of The Social Effect.