Why brands need to shift from audience targeting to contextual targeting

Since third-party cookies are not here for long, audience targeting is bound to struggle against contextually targeted ads

Why brands need to shift from audience targeting to contextual targeting
Audience targeting is based on a user’s history, preferences and actions online.

By Sahil Chopra

Contextual advertising has gained much attention, while audience targeting has taken a backseat. As the name suggests, contextual targeting delivers a message matching it to the relevant digital content. In simple words, your advertisement reaches only the people interested in availing of your services. 

Contextual advertising is a type of targeting that simply matches the ads with the content of the page where it is displayed. This builds a premise for brands and businesses to connect with their audience while the users are looking at the content related to the ad.

What’s the difference between contextual targeting and audience targeting? 

Audience targeting is based on a user’s history, preferences and actions online. For example, you recently searched for sports shoes, and a few days later, you are reading about Elon Musk taking over Twitter, and out of nowhere, an ad for sports shoes appears. In this case, the ad shown is not relevant to the article, but it is to you. Audience targeting benefits from all your saved cookies and browsing behaviour. Contextual advertising is quite the opposite, as it only shows ads relevant to the content displayed on the website. For example, if you are reading an article about fitness, an advertisement for Nike Training Club will be treated as contextually targeted.

Why contextual advertising? 

Contextual advertising requires marketers first to understand the content and the context of the pages and utilise the information gathered to create ads supported by relevant content. This increases the probability of interested users engaging with the ads and enhances the click-through rate and returns on ad spend. 

Why should advertisers go with contextual advertising?

Contextual advertising gives advertisers an edge in their digital campaigns. 

  • Cookie-free: With the recent developments, third-party cookies have been shown the exit door. Contextual Advertising does not rely on cookies, which is one of the significant reasons this type of advertising is back in the limelight. We will likely say our final goodbyes to cookies by 2023, and conventional targeting techniques like audience targeting will lose the battle against context-based targeting methods. The bottom line is that contextual advertising will be the most efficient despite the user privacy regulations and third-party cookies.
  • Cost-effectiveness: Audience Targeting does not come cheap. These ads require a lot of investment, from market research to marketing experts, to run them. Moreover, cookie-based ads have not shown much profit in terms of click-through rates regardless of the time, money and effort spent on them. On the contrary, contextual advertising is considerably less expensive, requires less investment, and is more effective. Contextual ads can guarantee a three times better click-through rate if done right. 
  • More relevant: Relevancy is the key to higher click-through rates. Audience Targeting mainly focuses on building a consumer persona and displays ads based on the user’s history. In contrast, contextual advertising shows ads based on what they are interested in at any given moment.
  •  Less Intrusive: As per the new norms of the General Data Protection Act (GDPR), information-gathering cookies are blocked as they collect a user’s private data. As a result, data accumulation to create a consumer persona is more challenging than ever. As long as one does not have the permission of their audience, they cannot track or analyse any buying behaviour. In addition, internet users find audience targeting annoying and intrusive. This is where contextual advertising wins, as it does not rely on data-gathering tactics. It complies with the new privacy laws and regulations and does not intrude on a potential customer’s privacy. Contextual advertising serves users with non-intrusive ads relevant to their online activity. 
  • More control: The advent of programmatic advertising brought several questions related to brand safety. The conventional advertising methods give little to no control over where the ads are served as audience targeting focuses on users. No brand would want their ads to be displayed on untrustworthy websites alongside provocative content without their approval. When it comes to contextual advertising, brands are relieved as the ads are only displayed next to content relevant to the brand or the ad. 

Since third-party cookies are not here for long, audience targeting is bound to struggle against contextually targeted ads. However, the choice of advertising always depends on campaign goals as there could be a significant difference in the results. 

The author is founder and CEO of iCubesWire. Views expressed are personal.

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