Online audiences are more distracted than ever. So how does contextual targeting take on the challenges of today’s digital environments to reach users effectively and in a privacy-compliant manner?

The average person spends seven hours online every day. In that time, they browse, communicate, shop, work, or watch. In the midst of all these activities, brands are competing to grab consumers’ attention: out of anything between 4,000 and 10,000 ads a day, we only really recollect a few (if any). 

Economist Herbert A. Simon, who coined the term “the attention economy” in the 1970s, argued that where there is a “wealth of information” this must come at the expense of something else: specifically, the attention of those consuming it.

This makes an internet user’s attention one of their most valuable qualities. But where advertisers would previously rely on third-party cookies to gain a general understanding of the person on the other side of the screen – and importantly, what might catch their attention – this is no longer a viable option amidst a backdrop of evolving privacy legislation.

In the race to stand out amongst the noise, contextual targeting has emerged as a privacy-safe method to deliver relevant ads: ads based on the content a user is already consuming. 

Contextual marketing: Where privacy meets relevance

As concern over how personal information is wielded to target ads has grown, both Apple and Google have taken steps to move away from cookie-based business models, with new privacy features often boosting their own platforms.

However, this has left smaller businesses in particular struggling. Without the resources or data to optimize their strategies and diversify across channels, these SMEs often lack the means to ensure their campaigns reach the right people and drive business goals.

Meanwhile, users are increasingly finding their attention stretched across multiple devices, channels, and activities: smartphones, laptops, tablets, and wearables (such as smartwatches) both compete and interact with each other. In fact, over a third of UK (36%) and US (33%) citizens own at least three devices.

Contextual marketing anticipates consumers’ needs by targeting audiences based on what is relevant to them. By aligning an ad with the topic a user has sought out, it’s more likely this ad will be relevant enough to hook their attention.

If, on the contrary, the ad is inappropriate or unsuitable, a user will at best ignore it, and at worst, be irritated by it. As opposed to being bombarded with intrusive, irrelevant ads, contextual ads synchronize to a customer’s search, without following them around online in a way many find creepy.

How it works

While more traditional contextual marketing may have lacked precision, contemporary technologies are continuously evolving to meet advertisers’ challenges head-on.

More sophisticated text, image, and video analysis, paired with artificial intelligence, machine learning, and more detailed metadata, have all contributed to injecting nuance into contextual strategy. As a result, it is now far easier to accurately interpret language, meaning, and emotion than when contextual targeting first surfaced. 

The metadata appended to streamed images can be particularly precise as it uses a combination of human intervention and AI. Furthermore, streamed images have the added bonus of being able to host the ads themselves for maximum visibility. So, rather than popping up next to the sought-out content – or even more annoyingly, in front of it – image streaming utilizes the focal point of an article: the visual element.

Brands nowadays have far more understanding of, and control over, page-level data than when contextual first arrived on the scene, and the scope and detail of these insights today make targeting more accurate.

Advertisers can choose what kind of content their ad will be placed with by targeting particular keywords in web addresses, titles, meta descriptions, page content, and tags. Meanwhile, blocked keywords act as a means to avoid unsafe content. 

Contextual targeting also empowers marketers to create a strategy that best suits their unique business needs. Marketers can base their insights on media content, semantic understanding, metadata (captions and URLs), search and intent signals, or a combination of these.

Numerous studies have demonstrated the effectiveness of these methods: according to IAS, purchase intent was 14% higher with in-context ads, and brand recall was four times as strong. Other research indicates that as many as 69% of consumers are more likely to engage with contextually relevant content, and 44% have tried a new brand upon seeing it within a contextually relevant setting.

Contextual targeting also goes hand-in-hand with the ad environment. Users tend to be 20% more engaged and consider ads on high-quality sites 74% more favorably than those on low-quality sites. Once again, this demonstrates the overall importance of context when it comes to online advertising, and shows how taking a two-pronged approach can help ensure brand-safe and suitable ad environments.

The nitty-gritty: Marketing niche products

McKinsey research reveals that nearly three-quarters (71%) of consumers want personalized interactions, with 76% feeling frustrated when this doesn’t happen. However, a further 61% feel concerned about the tracking of their online behaviors and browsing histories.

Contextual targeting presents an answer to this.

If a user is searching for products that are sustainable, regional, or handmade, for example, they are much more likely to be interested in a similar item rather than one that is mass-produced. 

Increasing relevance to the consumer in this way – by leveraging their particular, niche interests – can make it six times more likely an ad will be remembered – and increases attention scores by up to 107%. Aligning ads with interests makes ads more noticeable in the first place, becoming a crucial tactic in the attention economy.

Unlocking new audiences

Developing buyer personas based on demographic (age, gender, location, income), psychographic (interests, activities, values, lifestyle, opinions), and behavioral (internet behavior, ads interacted, and websites visited) segments can be an effective strategy. 

However, now the use of tools such as third-party cookies – which impinge on individual privacy – is not an option, achieving this requires a robust data strategy that not every brand has access to. The evolved level of contextual targeting today goes beyond putting consumers into boxes, increasing the chance of reaching new, previously unidentified audiences.

The easiest way to think about this idea in practice is by considering conventionally gendered purchasing behaviors. Whereas beauty products were previously advertised toward women, research shows that 15% of heterosexual men already use makeup and male cosmetics and a further 17% would consider doing so in the future. Meanwhile, 43% of Gen Z would wear genderfluid fragrances.

One brand has taken this concept a step further and curated a marketplace that specifically caters to certain moods, with a focus on sustainable, minority-owned, and gender-neutral products and services, rather than specific demographics. Targeting based on webpage content avoids the pitfalls of user stereotyping – which, despite all the available data, could still occur.

This does not mean that brands and marketing teams can’t adapt what they have learned so far, nor do they have to throw out insights gained through testing; this knowledge can be used in tandem with contextual targeting to expand reach.

Contextualizing the future

Contextual targeting future-proofs campaigns for further developments in General Data Protection Regulations (GDPR) as well as other global regulations, while at the same time helping brands keep their ads relevant, engaging, and in suitable environments.

Not only does this meet evolving privacy needs, but it’s a step up from an online experience in which ads are perceived to be intrusive, annoying, and inappropriate.

Contextual targeting maintains revenue streams and enables campaign optimization through traditional measurements such as click-through rate (CTR), cost-per-click (CPC), and viewability, without depending on user information and personal data.

Already, users are more likely to notice in-context ads first, spending 3% more time on such an ad than on an out-of-context ad. With more investment and resources pouring into the global contextual advertising market – estimated to reach $376.2 billion by 2027 – this solution will only continue to develop and strengthen over time.

Attention is a rare commodity in today’s economy, and questions abound on how to capture and measure it. If you want to learn more, you can download our free SmartFrame Guide to the Attention Economy.