Contextual ads are back (again)
A new report from contextual ad firm GumGum surveyed ad execs and found that content-based advertising has not succumbed to audience targeting.
The big question in ad targeting is whether the future has been worth it.
While advertisers in the past ran ads for cars next to automotive content, in the modern practice of audience targeting, advertisers direct ads at users based on their behavior, demographics and location. It’s the difference between running an ad for a new model of BMW on an automotive site or showing it on many kinds of sites to users whose attributes indicate they’re in the market for a luxury car.
A new report from contextual ad firm GumGum, Contextual Advertising: The New Frontier (free, registration required), indicates that more US advertisers use content-based or contextual advertising than employ targeted ads. However, they’re rediscovering the virtues of ads matching the surrounding content.
What the report found: Of course, that conclusion is beneficial to GumGum, which employs AI to recognize imagery on web pages so it can place appropriate ads. This kind of semantic understanding of the page can also detect sentiment, reading age or tone, and represents a beyond-the-keyword approach that the company describes as Contextual 2.0.
The report — written in association with marketing publication The Drum — surveyed 116 senior digital ad execs in the US and UK. Although a modestly sized sample, it does represent a concentrated focus on what advertisers are doing.
According to the report, 49 percent of US marketers responding to the survey are using contextual marketing today, which represents the most widely used kind of ad placement. By contrast, 46 percent use demographic targeting, 44 percent geolocation and 25 percent behavioral.
In the UK, contextual is second at 32 percent, with demographic targeting accounting for 36 percent of respondents, although the General Data Protection Regulation (GDPR) may eventually change that weighting. Geolocation and behavioral in the UK land at 29 percent each. Here’s an animated explanation of contextual ads from GumGum:
The value of contextual ads: The report also highlights the ad execs’ assessment of contextual’s value. Forty-four percent rated it highly for increasing the relevance of ads, such as an ad for a new BMW model being relevant to readers of that car site. Additionally, several ad execs quoted in the report cite their perception that contextual ads deliver “quality outcomes”—a higher level of trust for the brand and for the quality publication where the ad is placed. But there are no related stats on this qualitative assessment.
Thirty-one percent of the surveyed brands plan to increase their spending on contextual ads next year, a boost over the 24 percent who increased contextual spending last year.
But, in spite of its bullish approach to contextual ads, the GumGum report found that contextual ads remain only one part of the modern targeting palette. Sixty-one percent of respondents in the US and 65 percent in the UK said they wouldn’t use contextual advertising by itself. For an average of both countries, 28 percent use contextual all the time, 40 percent use it often and 25 percent sometimes.
The future prospects of content-based ads: It’s not that contextual advertising is experiencing a comeback, the report says, but it “has never gone away.”
“We’re reminded why contextual was a good idea,” Mediasmith founder and CEO David L. Smith is quoted.
Perhaps most interestingly, the report found that a quarter of US respondents and more than a third of UK respondents do not use any online targeting at all.
Brand safety is a key driver of contextual advertising, since programmatic ads based on user attributes can result in ads being placed in all kinds of dubious places. Contextual ads, on the other hand, look only at the inventory to determine if it’s the right kind of neighborhood.
Contextual advertising also complies with GDPR, the new European Union specification that has terrified many advertisers. It will also likely comply with the new California privacy law. If the ad is selected and shown based on the page content and not on your attributes, there is no personal data to protect.