To paraphrase L.L. Cool J, “Don’t call it a comeback. Contextual advertising has been here for years.” However, more recently behavioral targeting has been hogging the spotlight because it allowed marketers to hyperfocus their targeting and track individual users across the web — no matter where they went.
As the industry now swings toward a privacy-centric model, publishers have a chance to double down on the value they bring to contextual advertising. Of course, this isn’t news to publishers. But what may be surprising is that, for the foreseeable future, the real goldmine is in contextual ads on mobile and in video.
Contextual advertising: Why now?
Google has been heralding the end of cookies for years, while putting off the actual implementation — which is currently slated for the second half of 2023. More recently, though, Google announced that it is expanding its Privacy Sandbox to Android. While this implementation is years away, Apple has been taking more decisive steps to protect user privacy. Not only did it deprecate IDFA in 2021 — changing the way mobile marketers track attribution and optimize campaigns on iOS — but it also allows users to turn private browsing on in Safari on all devices.
Apple’s shift to a more privacy-centric model has already led mobile marketers to shift spend to Android. But we can expect to see spending shift on Google’s platforms as well.
Mobile marketers — and digital marketers in general — will need to reckon with the changing industry. Publishers have a chance to step in and remind marketers that contextual advertising is a great way to reach potential customers. They also need to let them know that advertisers who have already shifted away from mobile ad spending on iOS have an opportunity to contextually target iOS users in publisher apps.
Publishers and advertisers prepare for the contextual revival
The good news is that publishers seem to have recognized this opportunity. “The State of Contextual Targeting: Tactics, Technology and Revenue in 2021” from Digiday and Connatix found that many publishers are already prepared for the revival of contextual ads.
“Publishers are expecting a year of rising demand — and advertiser spend — in the area of contextual targeting,” says the report. “Among our respondents, 84% expect advertiser spend to sustain current levels or grow — and on the growth front, 61% expect to see an increase in buy-side budgeting for contextual-based campaigns.”
This isn’t just wishful thinking on publishers’ parts. The report also surveyed marketers at brands and agencies, finding that 96% of respondents said they would spend as much or more on contextual advertising that year. And 65% of advertisers will be adding to their contextual-based budgets.
So how do publishers win those contextual ad dollars?
The mobile opportunity
Much of the conversation about the resurgence of contextual advertising revolves around cookie deprecation. While we continue to wait for that to go into full effect, there is a hole that needs to be filled for mobile advertisers who still want to reach the estimated 1 billion people who use iPhones around the globe.
The rich data available to apps — especially those with a subscription model — presents marketers with a special opportunity. Forget basic, third-party demographic information, apps that require people to enter actual location data or other granular first-party data give marketers the ability to market to users based on real-time context, like weather conditions, or personally supplied information about their interests.
Publishers who can capitalize on this mobile opportunity now have the ability to build trust and solve problems for mobile advertisers who still need to reach iOS users. For instance, Sheri Bachstein, CEO of The Weather Company and GM of IBM Watson Advertising, says, “By helping mobile marketers drive forward their audience engagement efforts with addressable, performant data sources, we’re confident that this powerful data signal can be a solution for brands trying to solve the identity crisis and ensure consumers derive a more relevant experience across the mobile web and app ecosystem.”
Contextual video is on the rise
When we talk about ad trends, video seems to be a perennial list-topper. And it’s no different when it comes to contextual advertising. Digiday reported that “A number of publishers, ranging from Tastemade and Crackle, have added contextual targeting capabilities for their OTT and CTV inventory.”
Additionally, Xandr — a data-enabled technology platform powering a global marketplace for premium advertising — “launched a contextual targeting capability for CTV inventory, as part of a bid to maintain the momentum behind the video side of its business, which now represents 35% of the spend on Xandr’s DSP.” And at the time of the reporting, Iris.tv, which provides a contextual targeting marketplace, “has been growing 25% per month since the start of 2021 and now handles 28 billion ad requests per month, according to a spokesperson.”
Contextual and connected
CTV — and online video content in general — presents many opportunities for publishers, and, ironically, harkens back to the glory days of television advertising when soap companies advertised on daytime TV giving rise to soap operas. The ability to pinpoint this kind of targeting has only increased with CTV, and opens up opportunities for more interactive experiences that also allow for better tracking.
“I think one of the really powerful arenas, where contextual data will be pivotal, is CTV and more and more people are shifting to an addressable approach with their linear television as well,” Katie Price, programmatic media lead at the agency PMG, said in the Digiday Connatix report. “As contextual data gets more powerful from a digital buying perspective, we will be able to mesh together the efficiencies of programmatic buying and digital buying with that contextual relevance that has been such an advantage for TV advertisers and linear advertising in general.”
The report found that 44% of publishers were already using context-based video ad tools or were working with a third-party partner on a solution. Nearly a quarter of respondents were planning to work with contextual video in the year ahead.
That’s an opportunity The Weather Company is poised to capitalize on. According to Bachstein, “The advanced TV market is a huge growth area for us in 2022, and we’re excited to push deeper into this space. After hearing directly from our brand customers, we know that the market craves solutions that deliver personalization and drive action in this rapidly scaling medium. We’re continuing to improve our offerings to remain flexible across a multitude of platforms.”
Integral Ad Science (IAS) has already recognized and invested in the opportunities for CTV and contextual advertising. As AdExchanger reports, “Most of IAS’s growth currently lies in programmatic, and its biggest driver of that revenue line is a product it calls Context Control, which helps shift ad dollars into brand safe environments.” Through strategic acquisitions, IAS can now analyze video in addition to text. IAS creates contextual segments based on video analysis — detecting everything from language to emotions.
That’s a lot of context!
Mobile video: The perfect storm
If mobile and video present opportunities, then it only stands to reason that mobile video is a perfect storm of opportunity for publishers — and the numbers back it up. Google says three out of four adults report watching YouTube at home on their mobile devices. TikTok is predicted to have 1 billion users by January of 2022 built squarely on the popularity of mobile video.
Platforms that combine the convenience of mobile with the engaging nature of video are rewarded with vast audiences. However, marketers looking for controlled, brand-safe environments may be more likely to turn to trusted media outlets. Publishers who can capitalize on the power of mobile video and combine it with contextual ads will stand out from competitors.
The added benefits of contextual targeting
Consumers have, frankly, had it up to here with intrusive ad experiences — and that includes ads that follow them around the web. Audiences are primed for a contextually relevant, yet unobtrusive experience that provides them more control while still delivering a level of personalization. Publishers can seize that opportunity by embracing, and perfecting, the art of contextual advertising.
Contextual is not new. But these days, there are many good reasons to give it another look. Of course these include increased consumer concerns around tracking, privacy regulation, and big tech’s response.
However there’s more to it: contextual ads are smarter than ever. Natural language processing (NLP) allows marketers a deeper understanding of not only the context but the sentiment of each page, and increasingly, video on the web. With the help of machine learning, advertisers and publishers can go beyond keywords and whitelists to find the most relevant content possible.