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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.