Why advertisers are embracing context over user data

people on phones

Since the late 1990s, marketers have used the cookie to track website visitors, improve user experience and target digital ads towards receptive customers. But the way marketers use cookies is changing. With new regulations around online privacy — including the European Union’s General Data Protection Regulation and the California Consumer Privacy Act — browsers are phasing out third-party cookie tracking, including Google’s Chrome, which is set to deprecate the third-party cookie on Chrome browsers by 2022.

Moving toward this post-cookie world, there is increasing pressure to find innovative ways to target users. This is giving rise to new user-tracking methodologies. The best solution for cookieless advertising may be contextual advertising. 

Rather than relying on cookie-driven user data, contextual advertising tailors ads to the environment in which their audience is browsing. Contextual advertising relies on algorithms to select the advertisements based on keywords, website content and other metadata. This way, ads are served based on the interest of the user. For example, if a user is reading an article about running, there could be ads on the page for related products like running shoes. Since they are reading about running, they are probably interested in running shoes.

“Contextual advertising makes it possible to target a niche category and reach users who are currently thinking about that topic,” said Ned Dimitrov, vice president of data science at StackAdapt. “This means that your ad is viewed when a person is in a receptive mindset to see it.”

Contextual advertising coexists with behavioral advertising

Though the post-cookie world is coming, behavioral advertising still has relevance. As restrictions around privacy evolve, this cookie-reliant approach to advertising is becoming more challenging. Marketers are in a tough spot of having to balance their established behavioral advertising strategies with contextual advertising.

At this moment, the best approach is to strike a balance between the two methodologies. This balance will depend on various factors such as restrictions in the region. For example, if a target geographic region is a region that is restricting cookies, an advertiser will want to introduce a contextual strategy. But in regions that are still allowing cookie tracking, advertisers can continue to use behavioral tactics. 

The role of contextual will likely continue to grow as the industry heads in a cookie-less direction. This in-between moment presents a great opportunity for marketers to start experimenting with contextual advertising. By getting started with this new targeting approach now, marketers can slowly ramp up their use of contextual advertising.  

The benefits of adopting a contextual strategy

Contextual advertising is not the future simply because the industry is headed toward a cookieless world. There are advantages to a contextual strategy that make it particularly beneficial to ad campaigns. 

“Our historical analysis has shown that placing ads in the right context can increase user engagement by a factor of up from 4 to 10,” said Dimitrov. “Having the right context can really give you a big boost in performance.”

Contextual advertising delivers an ideal customer experience by reaching people when they are in a receptive frame of mind. When a person is browsing a site about running, or reading an article about running, it is safe to assume that they are interested in hearing more about running related topics. Their content consumption signals intent at a specific moment in time. Contextual advertising captures that intent and serves the ad in the moment they are actually ready to hear about it. Rather than targeting a person based on their user data, a marketer can target them based on their frame of mind.  

Contextual advertising also protects user privacy, and it provides the opportunity for marketers to target niche contexts. An advertiser can target by topic or use a collection of keywords for more precise targeting. The ability to review real-time metrics means that contextual advertising campaigns can be optimized for maximum performance.

The future of contextual targeting

The best context is not always straightforward, and so in some cases it may require human insight to make the most perfect match. This is because the contextual framework is fundamentally different from things that might seem related, like keyword matching and Google search. When targeting keywords in contextual advertising, small nuances like capitalization can contribute to the context. For example, the context around “Apple” would be consumer electronics, whereas the context around “apple” would be fruit. 
The other important nuance to note is that the best context may not be the same as a landing page. When advertising vacations to Florida, the keywords to target would best hone in on the mindset of someone who would be receptive to the idea of a vacation and warm weather. In this case, targeting keywords related to bad weather could capture the right user intent for the campaign.

A key area for future innovation in contextual advertising is to address how context is not always obvious by creating solutions that can do the heavy lifting. An ideal solution would be able to figure out related keywords based on recency and brand safety; down the road, 100% automated contextual targeting is the goal.

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