Shaping the future of advertising: 5 ways contextual AI is transforming the digital advertising landscape

ChatGPT, Bard, Sparrow, Character AI, and more - the AI revolution is here, and how! The AI battle has just begun and is touted as one of the most epic showdowns for AI domination. AI is making its way into all industries, and advertising is no exception.

Contextual 2.0, or the reappearance of contextual advertising in marketing strategies, is powered by one key element - Artificial Intelligence (AI). Contextual AI's ability to process huge volumes of content, learn, and evolve makes it a powerful tool, one that's ideal for the post-cookie world. AI leverages the power of Machine Learning (ML) to enable machines to develop a human-like understanding of content.

AI and ML capabilities, coupled with years of data processing and learning, have made contextual AI a must-have today. Contextual advertising can sift through huge volumes and networks of content across geographies, languages, and categories. So, how is the AI revolution changing the way brands advertise and fueling the future of advertising? 

Hyper-personalization is the new norm

Behavioral advertising is a thing of the past. Why? Because it's based on expansive assumptions and generalizations around audience categorization and their areas of interest. Today, the audience is tired of ads following them around and ruining their browsing journey. With contextual advertising, their woes have been addressed. Brands can appeal to audiences within their realm of interest by appearing alongside contextually relevant content.

For example, an audience pool interested in sustainable fashion is environmentally conscious. However, that does not mean they are looking for an electric vehicle. This is where contextual AI plays an essential role in targeting content related to the most relevant topics.

Audience segments go contextual

Unlike behavioral advertising, where the audience is segmented based on assumptions and third-party data, contextual advertising gives marketers the power to go beyond standard IAB taxonomy and build personalized audience segments. Leveraging contextual AI allows brands to reach audiences at a highly granular level by providing a platform where audience segments can be scaled endlessly. All this while protecting users' privacy and complying with all data privacy regulations.

Enhanced audience engagement

AI's in-depth analysis of the context, content, and images is followed by designing creatives and integrating the brand's messaging in them. Contextual advertising offers a full suite of in-content placements to garner attention without hampering user experience.

The shift in ad placements within content enables a non-intrusive browsing experience as the ads are relevant to the content on the page and do not hamper the browsing flow of the user. With the option of in-screen, in-article, in-image, and in-video, brands can blend their messaging to capture the attention of each type of content consumer.

Creatives driven by contextual AI maximize brand association with the context. The in-content ads capture attention faster and retain it longer, increasing user engagement and brand recall.

Optimized budgets and improved ROI

The more defined an audience segmentation, the better the ad performance. Contextual AI's ability to narrow down and bucket audiences based on their interest and intent help deliver ads to the right user at the right time, increasing relevant impressions.

Backed by data and an enhanced understanding of users and their interests, contextual ads have proven to be more impactful and drive conversions better. The ads appeal to a niche audience segment as they are targeted based on precise parameters. Since the messaging is highly relevant, engagement and conversions are higher. It also eliminates impression wastage as the right customers are targeted with suitable ads within their domain of interest.

Rated high on brand safety and suitability

Contextual AI's ability to surf through data, understand nuances in language, and semantically interpret editorial content guarantees the highest levels of brand safety and suitability. By analyzing a page's written and visual content, contextual AI offers advertisers a brand safe environment whose values and ideas fit seamlessly with their own.

Contextual AI's Natural Language Processing (NLP) capabilities genuinely understand the meaning and context of the language used. This helps bridge the divide between risk and opportunity by providing context-based protections, thus enhancing brand suitability.

With the spotlight on privacy and third-party cookie phase-out, consumers are more well-informed and protective about their personal information today. Brands that render irrelevant and invasive ads almost immediately garner a negative perception and stand to lose significant market share and brand value.

We at Seedtag are enabling leading global brands like Mitsubishi, Pedigree, Maserati, and Levis to ride the contextual AI wave and create compelling advertising strategies without using any third-party data.

Curious to know the impact on brand awareness, ad recall, and CTR? Take a look.