Aligning ads with the content that users actively seek is crucial for resonance. This is known as contextual targeting, and it involves tailoring ads to a website’s content. While this concept has been around for some time, its importance has been overshadowed by third-party cookie-based targeting.
But as the digital world shifts towards user privacy and customer data protection, contextual targeting is making a comeback and is estimated to reach a market value of $335.1 billion by 2026. Let’s dive deeper into the world of contextual advertising in this blog.
How does contextual targeting work?
Contextual targeting in retail media is an effective way to reach potential customers by placing ads on e-commerce platforms, product pages, or other retail-related digital spaces. By aligning the ad content with what the consumer is currently browsing or interested in, it increases the chances of engagement and conversion. With our innovative technology, we can help retailers effectively target their audience and boost sales.
Contextual targeting in the retail media landscape is a straightforward process, especially with a reliable ad platform like FCC’s Ads Manager, It involves:
- Content keywords: When promoting a skincare campaign, it’s important to use specific keywords that will resonate with your audience. Some potential keywords for a skincare campaign could include “five-step routine,” “2021 moisturizers,” and “vegan skincare.” By using these targeted terms, you can effectively convey the benefits of your products and attract potential customers who are interested in these topics.
- Categories: When it comes to optimizing for search engines, it’s important to choose the right keywords. Instead of a long and exhaustive list, consider broader categories like “Beauty & Fitness” with its subcategory “Face & Body Care” for skincare products. This approach can help attract a wider audience and improve your website’s rankings.
The ad platform’s crawler evaluates the content of various sites once parameters are set, and when a user accesses a page, the ad server matches relevant ads to the page’s content. However, other factors such as language and location targeting can also influence ad placement.
Contextual Targeting vs. Behavioral Targeting: What's the Difference?
Two popular methods of targeting digital advertisements are contextual targeting and behavioral targeting. Let’s take a closer look at how they differ from each other.
Contextual targeting involves placing ads on websites based on their content. Similar to how a print ad would be placed in a niche magazine, contextual targeting allows for targeted and relevant ads to be displayed. For example, an ad for dishware could appear on a recipe site, reaching an audience interested in cooking and potentially increasing conversions.
How it works:
A web crawler plays a crucial role in scanning and categorizing pages based on context and semantics. This process can greatly improve the effectiveness of ad matching, as the ad server is able to match relevant ads to a page based on keywords and context. However, the success of this system ultimately depends on its ability to accurately understand the true context of a page.
Types of Contextual targeting:
- Category contextual targeting: Ads are directed at websites that fit within predetermined categories.
- Keyword contextual targeting: Ads target websites that match certain keywords.
- Semantic targeting: A sophisticated method that goes beyond simple keyword understanding to fully understand the meaning of the page.
Contextual targeting is a privacy-compliant method of targeting users based on their current browsing environment. Unlike traditional cookie-based targeting, this approach relies on contextual signals. Recent ad tech advancements have made it possible to combine commerce signals with contextual signals, resulting in enhanced product affinity scores for specific URLs. This allows for a personalized and relevant user experience while still respecting their privacy.
Behavioral targeting, also known as audience targeting, is a strategy that segments customers based on their web browsing behavior. By tracking factors such as pages visited, links clicked, and products purchased, businesses can better tailor their marketing efforts to specific audiences and increase the likelihood of conversion.
How it works:
Data is gathered on users’ digital activities through cookies, and these users are categorized into audience segments based on their similar behaviors. Advertisers can then tailor their ads to target these specific and relevant audiences. This helps increase the effectiveness of advertising campaigns and improves user experience by delivering more personalized content.
Behavioral targeting is an effective strategy for delivering personalized ads to potential customers at the exact moment they are most likely to make a purchase. This can be seen in retargeting ads, which show products that users have previously viewed or shown interest in. By using this method, businesses can increase their chances of converting leads into sales.
Contextual Targeting vs. Behavioral Targeting - Key differences
|Parameters||Contextual targeting||Behavioral targeting|
Contextual targeting understands the digital environment in which audiences are browsing to display ads.
Behavioral targeting looks at users' past digital behaviors to determine ad placement.
Takes into account the content on the current page
Behavioral ads rely on a user's previous behavior, typically tracked through cookies.
It is becoming popular since it does not rely on cookies and collecting personal data.
Behavioral targeting relies heavily on third-party cookies.
Ads that are contextually relevant have been found to have 2.2 times better ad recall and 10% higher engagement rates. This means contextual targeting can lead to more cost-effective and engaging advertising campaigns.
Might not be effective as it is not always relevant to the present browsing actions and depends on past user data.
Why should you start using contextual targeting in your marketing?
As online platforms continue to dominate our daily lives, it’s becoming increasingly important for brands to stand out in the digital landscape. With stricter regulations (like Europe’s GDPR and the US’s CCPA) on traditional targeting methods, contextual targeting is emerging as a key strategy for effectively reaching and engaging with audiences in the years to come. As we enter 2023 and beyond, brands will need to prioritize this approach if they want their marketing efforts to be successful. Here’s why:
- User privacy: The proliferation of ads that stalk users across the digital landscape has led to a negative user experience and a rise in ad blockers. Instead, contextual targeting offers a more natural and less invasive approach by aligning ads with more relevant content. This results in a more organic advertising experience. Even if users see the ad multiple times on different platforms, it doesn’t feel intrusive because it is contextually relevant to their interests at that moment
- Third-party cookies: With the increasing restrictions on third-party cookies by major browsers such as Apple’s Safari and Mozilla’s Firefox, it has become more challenging for advertisers to collect user data. Even when given the option to consent, recent trends show a decline in permission, posing challenges for targeted advertising. However, contextual targeting offers a solution by eliminating the need for tracking or collecting user data. This not only ensures compliance with privacy regulations but also helps avoid potential penalties.
- Ad blindness: In today’s saturated advertising landscape, brands can face ad blindness due to the sheer volume of ads. To stand out and capture user attention, contextual targeting is a valuable solution. This means placing ads that are relevant to the content users are consuming, increasing the chances of engagement. By avoiding over-personalization and strategically placing ads, brands can ensure they reach their target audience effectively at the right time.
Benefits of using contextual targeting?
As the digital advertising landscape evolves, ad targeting is becoming increasingly crucial. This strategic approach ensures that ads are relevant, timely, and aligned with audience preferences by targeting them based on the surrounding content. In a world where cookies are losing their effectiveness and user privacy is a top concern, contextual targeting offers a seamless blend of relevance and privacy.
Here are the top benefits of using contextual targeting:
- Compliance with privacy: Contextual targeting is a privacy-friendly method for programmatic ad channels. Instead of tracking individual users, it focuses on the content of a site or app. This approach ensures compliance with privacy regulations like GDPR and can often be more cost-effective than using third-party audience data.
- Relevance resonates: Ad that seamlessly integrates with the content a user is engaging with feels natural and unobtrusive. This type of advertising complements the user’s experience rather than interrupting it, making it more likely to capture their attention and drive action. By appearing when the user is already engaged and in the right frame of mind, these ads are more effective in achieving their intended goal.
- Versatility in audience reach: Contextual targeting offers unparalleled adaptability, catering to both broad and niche audiences. With the help of tools like Automatic Content Recognition (ACR), advertisers can target specific content preferences such as Spanish-language shows, instead of relying on third-party cookies. This means they can reach specific demographics more effectively and accurately.
- Empowered ad placement: Contextual targeting provides advertisers with precise control over where their ads are displayed. This feature allows them to choose specific pages and extract relevant keywords to ensure that their ads are placed strategically. Additionally, contextual targeting can be combined with behavioral targeting for even more tailored ad placement. With this level of granular control, advertisers can be confident that their ads are being placed wisely and reaching the right audience.
Start your retail media ads with FCC
In the ever-changing world of e-commerce, successful ad management is crucial for increasing engagement and conversions. With Flipkart Commerce Cloud (FCC), retailers have access to a comprehensive solution that helps them optimize their advertising strategies. FCC allows retailers to monetize every customer visit and improve brand engagement, with a one-stop solution for all your advertising needs, from display ads for instant revenue to customer context-based ads.
Success Story: How Nasher Miles, a new-age luggage brand, used product contextual ads with FCC to achieve 2X sales
India is a significant market for luggage and backpacks, projected to grow at a rate of 15% YoY. Currently, it is a market worth INR 10,000 crore.
In the bustling Indian luggage market, where differentiation is key, Nasher Miles emerged as a trendsetter. This digital-first brand dared to deviate from the conventional blue, black, and brown suitcase palette, offering uniquely crafted luggage that doubled as a fashion statement.
As part of their ‘International Travel Series,’ Nasher Miles launched a campaign with the Flipkart Ads platform to target customer segments explicitly searching for ‘high-quality luggage,’ ‘trendy luggage,’ and ‘bespoke luggage.’
The Product Contextual Ads were utilized to feature leading brands like Stony Brook, American Tourister, and top lines, including Nasher Miles. The brand saw 2X sales than their usual sales volumes. The approach helped Flipkart earn revenue from the increased interest and views of the product page and increased conversions, thus the overall GMV.
Recognizing the potential of e-commerce as a primary growth driver, Nasher Miles made Flipkart Ads a primary channel for its brand awareness and performance strategy.
Monetizing online activity has been simplified and made easier with FCC. Our platform allows you to earn revenue through sponsored listings and convert searches and browsing into income, even before the final checkout. Plus, our expert consultations help you unlock advanced ad-tech features and implement high-yielding ad revenue models for maximum return on investment.
Our suite offers all ad formats, including video ads, rich media, and static, in one convenient platform. Empower your end-users to create their own campaigns with our self-serve option and reduce operational overhead. Our white label dashboards automate reporting processes while providing a seamless user experience for your clients.
Simplify your advertising strategy with FCC, Book a free demo today!