DEFINITION of 'Contextual Advertising'

Contextual advertising refers to an automated process where a promotional message is matched to relevant digital content. The algorithms underpinning contextual advertising select the advertisements based on keywords and other metadata included in the content. The resulting advertisement is more relevant and targeted, which generally helps with getting users to click through on the ad. This means more revenue for the publisher of the content and more traffic for the advertiser.

BREAKING DOWN 'Contextual Advertising'

Contextual advertising represents a large portion of the advertising on the Internet. The largest player in contextual advertising is, of course, Google (now Alphabet Inc) with its AdSense platform. AdSense allows a publisher to insert code throughout a site where ads will be served through AdSense. The site is crawled for keywords and context, and then relevant ads are placed. The site owner can customize certain features, such as where and how ads display and what types of products or services are advertised.

The Advantages of Contextual Advertising

The automation of the ad serving process has been a boon to many online publishers and companies advertising online. It allows all manner of publishers, from large sites to small blogs, to serve ads without having to run an ad sales department to get buyers or an IT department to display and track ads. For advertisers, it has opened up a much wider field of options and the ability to get their messages in front of potentially profitable audiences without having to actually search them out. The technology is also evolving to where the ads themselves may be further customized by the demographic information and geographic location of the user, not just the content on the page.    

The Future of Contextual Advertising

The field of contextual advertising is still relatively new. Beyond webpages, contextual advertising is being experimented with for video content and even videogame content. The idea of a dynamic billboard has even been proposed, with a camera viewing the gender and age of the audience and changing the advertisement displayed based on that.

With such a promising future ahead, however, contextual ads are far from perfect. With the increasing integration of search history and user information, there are of course, legitimate privacy concerns. On a more practical level, the haphazard ingestion of this new stream of data into the contextual ad serving machine causes your high value searches to follow you from site to site. For example, most internet users are familiar with having a flight price that they search for linger for weeks or even months. Similarly, a search for keywords around an engagement ring could follow a user for years. So while contextual advertising is good at finding you, it doesn’t quite know when to stop yet.   

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