Busting the most common misconceptions of contextual targeting

We witnessed a major inflection point over the last two years that completely reshaped the way consumers interacted with brands and consumed their products or services. With the exponential surge in online content that targeted people living and working out of home, brands have had to compete hard to capture eyeballs and stay relevant. Given the changes in consumer expectations, combined with changes on the technology front, such as the phasing out of third-party online cookies, introduction of machine learning and AI, brands have begun leaning heavily on ‘contextual marketing’ to ensure effective targeting.

While contextual marketing as a concept is not new, just think of how fashion brands change their collection based on the weather, how contextual advertising is being used given the current tools is a new concept. As always, any new concept comes with its own set of misconceptions that hamper the adoption and evolution of the same. As the demand for personalization grows steadily, contextual advertising is playing a pivotal role in bringing together behavior, historical purchasing patterns and relevant environments that customers are in, to target them with content and ads that would drive greater recall and even a possible immediate sale. Despite the evidence, here are some misconceptions that need to be cleared up

#1 Contextual targeting is just ‘keyword targeting’ in a new package

While there is an element of truth here, the early days of contextual targeting largely relied on defined keywords to find suitable environments to display ads. We have come a significantly long way from them and incorporated a lot of new technology that makes this more than “just keywords”. AI-based technologies coupled with natural language processing are able to analyze pages at the level of body copy, sentiment analysis, images used and more to paint a clear picture of where a particular ad can have the most impact.

Let’s take a simple example. You’ve just bought the latest Macbook online. Earlier, you would just see a lot more ads on laptops, which would not add any value as you’ve already got what you’re looking for. Contextual advertising can quickly correlate your purchase and show you ads for a USB charger, laptop bag, vinyl stickers and other accessories that you might need. Context is much more than just keywords.

Contextual advertising ups the game of keywords by introducing non-endemic opportunities. For example, if someone were looking to buy a car, auto loan companies and other adjacent industries can look to align with auto content that’s relevant to new car purchase decision making as opposed to other automobile related websites.

#2 It is more expensive and is not as effective as what’s there right now

Studies have shown that contextual ads not only see a higher recall and engagement compared to what’s currently being used, but are more effective at understanding the consumers’ purchase intent. How many of us have actually purchased a product based on a pre-video or in-video ad on YouTube? Research from MetrixLab and Seedtag has actually shown that message recall in the right context improves by as much as four times than that of in-video ads that are served without contextual advertising. Furthermore, brand favourability increases by 370% and purchase intent rises by 390%. These studies have shown that contextually targeted impressions were significantly less costly than behaviourally targeted impressions. Key metrics like cost per click (CPC) and viewable impressions were far more inexpensive and effective than current methods.

This also ties in to the misconception that once cookies are no more in the picture, all retargeting will be replaced with contextual advertising. The fact remains that contextual advertising and targeting will be one of many methods available, but evidence suggests, will lead the way after the demise of third-party cookies.

One aspect that gets ignored fairly often is how contextual targeting greatly enhances brand safety. Organizations that have invested in in-content contextual tools are seeing their brand favourability go up 22%, and are able to avoid subsequent brand and financial damage if ads are misplaced.

#3 All context will be equal

Superficially, this would seem to be the case, but the reality is that not all companies setup their  artificial intelligence and other technology systems along with the associated immersive experiences the same way. Even with access to the same data set, the effectiveness of contextual targeting varies based on numerous factors. A study by Seedtag and Nielsen indicates a positive relationship between the level of immersion in the content and the reception of ads.The buck does not stop at merely having the systems in place, but by integrating them with actionable insights. Brands can stop at very basic optimization — like what’s vogue in a particular season or can personalize digital consumer experiences in real-time based on numerous other factors such as location, personal colour preferences, purchase history and more.

This misconception is also coupled with another misconception that a brand requires massive amounts of first-party data to see a difference when it comes to their contextual advertising strategy. While it makes things easier, it is only a part of the larger commercial picture.Contextual advertising with today’s tech is focused more on consumer’s current content consumption during the buying cycle rather than past purchase history. 

Given that Google has stayed the cookie’s execution until 2023, this is a good time for marketers who’ve not already started seeing benefits with contextual advertising to experiment and figure out which technology mix and keywords works best for them. While we expect more and more tools to come out into the market, the ability to use them together in an effective manner is what will see one brand leading the pack over others who’ve merely dabbled in this space. 

So where does one start on their journey of contextual targeting? 

The starting point for any contextual targeting journey would be to map the customer journey of what they might want to buy and the subsequent offers that might be relevant to them. Define your target groups, primary interests and associated interests. Once you’re able to define what your customer needs to see, leverage experts in the field who can help tailor what kind of ads and experiences would yield results, bring together relevant tools and technology to ensure those ads are seen and ultimately be able to track impact and pivot accordingly. Let Seedtag be your partner in this journey to unveil better ways of targeting your customer in a post cookie world.