Targeting strategies in advertising play a vital role in delivering relevant methods and also ensuring that it’s a two way transaction. Among the various targeting methods, contextual targeting and behavioural targeting are two distinct approaches that advertisers use to achieve their marketing objectives. In such a scenario, another major question looming over our heads is: What should we go for – contextual targeting or behavioural targeting? To make a learned decision between this, one must know what contextual targeting and behavioural targeting is.
What is contextual targeting?
According to a report by Statista, contextual advertising was estimated to spend $227.38 billion in 2023 with the amount expected to double by 2030 with an estimate of $562.1 billion. Additionally, a study by Harris Poll revealed that 79% consumers are more comfortable in seeing a contextual ad instead of a behavioural ad. Contextual targeting is when the ads are based on the page’s content. A simpler way to explain this is when ads for hair care products will appear on a webpage that is showcasing an article on hair fall. Heavily relying on AI-driven algorithms, contextual advertising places ads according to keywords, website content, and other metadata. This approach ensures that ads are displayed to users based on the content they are currently engaging with online.
It also offers other benefits such as maintaining privacy compliance with regulations like GDPR and CCPA, enhancing brand safety by allowing advertisers to avoid controversial content, and improving ad relevance. Key methods in this mode of target advertising include keyword targeting, category targeting, and semantic targeting, although challenges like keyword ambiguity and the complexity of dynamic content remain.
What is behavioural targeting?
Behavioural targeting is when the advertisers utilise consumers’ information such as third party data and then disseminate the ad accordingly. A study by Data Driven Advertising reveals that behavioural targeting has a click through rate 5.3 times higher than that on normal advertising. Furthermore, when people get ads of the products or services that they have used before through behavioural targeting, the click through rate increases to 10.8 times. However, due to the deprecation of third party cookies which is leading to its slow demise, behavioural targeting too, is seen in a bad light. Another study by Adobe revealed that 76% marketers do not use behavioural data in advertising.Furthermore, with the announcement by Google on third party cookies declining, brands are expected to strategize effectively in order to reach their target audience without third party information.
Who emerges a winner?
According to a report by Statista, contextually targeted advertising spend is expected to be a whopping amount of $376.2 billion by 2027. Numbers won’t lie, it is obvious from these figures that contextual targeting is going to be the next big thing in the world of targeted advertising. Given the imminent decline of third party cookies and implementation of laws such as GDPR and DPDP, this method of targeting will be more sustainable and effective as far as advertising strategies are concerned. Additionally, the benefits of maintaining brand safety and enhancing ad relevance further bolster the case for contextual targeting. In contrast, behavioural targeting faces significant challenges due to privacy concerns and the deprecation of third-party cookies, limiting its future viability.