Understanding & Utilizing Contextual Advertising vs. Behavioral Advertising

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Web browsers are slowly slipping away from third-party cookies and no one can deny that it is causing quite the turmoil in the advertising industry. No wonder various marketers and advertisers are continually searching for alternatives to reach consumers in order to prepare for the inevitable cookieless future. Behavioral advertising can now be considered a challenge because it leverages cookies - leading to a favorable edge for contextual advertising

To give you a more defined context of contextual advertising vs. behavioral advertising, let us first coin the term of the two.

What is Behavioral Advertising?

Behavioral advertising, also known as audience targeting, targets web-browsing behavior that lets the marketers and advertisers show relevant ads and tailored marketing messages to consumers. When an advertising network collects the consumer’s browsing history, searches, clicks a link, and the like, cookies are stored. Then, the collected data from the cookies will be interpreted and utilized to deliver related content.

In a more specific context, behavioral advertising looks into a user’s behavior to understand what kind of ads are relevant to them. When users conduct a behavior, it will be tracked as they surf the web and eventually receive content based on their activity. This data allows audiences to be built as well - like affinity or in-market audiences by third-party companies that have brokered access or placed their own cookies on websites.

Behavioral is not to be confused with demographic targeting which could be even less reliable than behavioral. A reportin Forbes stated that when two targeting parameters are used for targeting ads — gender + one selected age range — the accuracy drops to 24%. Although some demographic data is derived from user behavior and third-party cookies, which may mean that demographic data is less available after the sunset of cookies.

Advantage vs. Disadvantage of Behavioral Advertising

As mentioned, behavioral advertising tracks the user’s activity by collecting various information such as demographics, website visits, searches, and the like. In return, users should receive customized and relevant ads prompting an increased percentage of purchases.

However, consumers often express their fear about data collection, thus raising several third-party cookies issues. Plus, oftentimes ads are served late or incorrectly. For example, a user searches for a pair of boots, then receives ads for those shoes for weeks or gets placed in an in-market audience for longer than needed.

Behavioral data can be expensive to obtain. Using behavioral data to target can increase your advertising costs by close to 2x.

What is Contextual Advertising?

Contextual advertising uses words, pictures, emotions and other signals to match advertising to the context of a web page. Contextual advertising is mainly about appearing at the right moment, at the right time, because ads will only be displayed on the web page relevant to it. Getting started with contextual advertising, you need to select the appropriate topics and keywords. Then, the chosen topics and keywords will be utilized to correspond with a web page the user is viewing. Usually this pertains to web pages, but other forms of contextual advertising can analyze the context within videos, audio and more.

Contextual targeting can be utilized for all forms of ads including display and video. There are some formats that are mostly used with contextual targeting like native or on-stream video ads that are intuitively more inclined for integrated content due to their format. For example, Native ads mimic organic news articles.

Advantage of Contextual Advertising

Since specific keywords and topics will be utilized, brands are assured that their ads will only appear on a webpage related to them or the topic they have chosen. This makes for a more relevant ad within a specific moment.

Not only will it encourage interested consumers to check out, but it will also promote brand safety. The brand will not be displayed on an unrelated webpage that may tarnish its identity.

Contextual ads served in the moment have been shown, by a Cint study, to increase brand awareness by 32.9% and purchase intent by 30.3% for a national protein brand.

Contextual Advertising vs. Behavioral Advertising

The main difference between contextual advertising vs. behavioral advertising is the method, while both of them have only one goal, which is to convert a prospect into a sure buyer. Behavioral advertising focuses on the user’s past activities to deliver relevant ads, while contextual advertising display ads related to the web page's content. It’s more like former activities vs. current interests of the consumers.

If you’re going to consider running contextual ads, contextual advertising is highly recommended for CTV, Ecommerce, Travel and many more industries that allow ads to be served alongside related content. By testing different content, you can learn what types of content topics resonate most with your advertisements. Aside from not utilizing third-party cookies, contextual ads also offer a wide range of opportunities to leave the consumer feeling as if their web or CTV experience is integrated.

Do Consumers Like Contextual Ads?

According to a survey conducted by Integral Ad Science, a majority of consumers, almost 63%, favor online advertisements that are closely aligned with the content they are currently engaging with. This preference for contextually relevant ads surpasses the share of respondents who prefer ads that are unrelated to the surrounding content by more than sixfold.

When it comes to selecting the most effective advertising approach, data highlights the significance of contextual ads. In particular, only 9% of respondents expressed a negative inclination towards advertisements that seamlessly blend with the surrounding content. Moreover, ads that establish thematic connections between the promoted product and the content received positive reactions from 39% of participants, with just 10% reacting negatively. In stark contrast, an overwhelming 35% of individuals expressed negative sentiments when confronted with advertisements entirely unrelated to the content.

Moreover, in a case study conducted by Qortex with a chain quick service restaurant on the East Coast, ads using contextual placement garnered 2.3X engagement over industry averages for engagement.

Contextual advertising and behavioral advertising both have pros and cons, depending on the goal of your advertising strategy. Today, contextual advertising may be a great option to explore, because you won’t have a problem with GDPR, and consumers seem to prefer contextual targeting. You can explore what types of content allows your advertisements to perform the best. You can also ensure that your ads are placed safely for your brand.

This article was written by Zack Rosenberg Co-Founder and CEO of Qortex.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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