Contextual advertising’s comeback: Everything you need to know

Contextual advertising is having a renaissance in mobile marketing. As many iOS users opt-out of tracking and mobile marketers look for new ways to target the right users, contextual ads have risen back to prominence.

Behavioral targeting has been the dominant marketing strategy in mobile in recent years. However, with new privacy laws and regulations, such as the App Tracking Transparency (ATT) framework, in-app behavioral data has become more difficult to obtain.

So, in the absence of that behavioral data on mobile, savvy marketers are now turning back to the tried and true method of contextual advertising. In fact, research shows that the global contextual advertising market is set to reach $335.1 billion by 2026.

With the new shifts in user privacy, it’s critical mobile marketers and user acquisition managers put this strategy into their marketing toolkit.

Contextual advertising is an automated process utilizing algorithms to match an advertisement with relevant content in an app or webpage. For instance, a cryptocurrency exchange platform can target users by placing an ad in a fintech app, or a food delivery app might choose to run ads in the Pinterest app to people searching for recipes. Contextual advertising can also be used for cross-selling, such as running an ad for a game in a similar game.

Behavioral targeting tracks users' behavior and serves ads according to their browsing history. This method has allowed marketers to deliver increasingly personalized ads. For example, a user views the latest pair of Nike shoes on their phone. Then, the user sees a Nike shoe ad on social media, later on, a news app, and still later, in a gaming app. In behavioral targeting, the ad is specifically for the user and not for the environment in which the ad is viewed.

In contrast, a contextual ad is based on the environment, the “context” in which it appears. In this case, a Nike shoe ad may only be seen if the user is in a fitness app or shopping app. The ad will not pop up in other places unrelated to shoes, like in behavioral targeting.

Contextual advertising is critical in today’s mobile ecosystem as it’s a straightforward way for advertisers to find audiences who may be interested in their products or services without the need for behavioral data. Essentially, contextual ads are privacy-friendly, relevant, and can even fight ad fatigue by enhancing the value of the content in which they are placed.

Taking context into account can even help boost the effectiveness of your ad. According to Chris Huebner of Volt, “Alignment between ad and context (the channel) can amplify halo effects, meaning an ad is more likely to be processed as well as viewed favorably. Knowing that Spotify is likely used in a gym setting, performance-related messaging or brands in the health and wellness space have a stronger opportunity to have an impact and lessen ad avoidance.”

Social media advertising spending in the United States is predicted to hit $67.4 billion this year. As social media apps have been hit hard by ATT, much of the behavioral data they once relied on to pinpoint ads is no longer available. However, social media apps can still benefit from contexts.

Users tend to provide a significant amount of information about what they like on apps like Facebook, Pinterest, or Instagram. They share basic profile information, join groups, and like posts, which can all be utilized for contextual advertising. In a more active role, a user searching a specific hashtag or keyword tells you exactly what interests them. Using this contextual information to help capture attention is be a clever way to deliver your ads.

To begin contextual advertising, you will need to find a mobile demand-side platform (DSP) to place your ads based on the goals and parameters identified by your team. Let’s walk through the typical steps involved in working with a DSP to deliver contextual ads.

1. Choose contextual targeting parameters

In order to create a successful contextual campaign, it’s important to have a clear understanding of what your campaign is about in order to find the right ad placements.

Find your topics: Starting with topics as broad as ‘Music & Arts’ or ‘Autos & Vehicles’, most networks will allow you to narrow down from there — honing in on ‘pop music’ or ‘motorcycles’.

Define your keywords: Keywords allow you to target the right ad placements more precisely. Google suggests campaigns use 5-50 keywords to help narrow your focus. This includes negative keywords, which let marketers exclude certain publications or topics.

2. Let the DSP analyzes its network inventory

Once you have set the parameters of your contextual targeting campaign, your DSP takes over. It will analyze the content available in its network and find the best matches. Often, you can decide whether you want your reach to be broad or specific. This will determine whether your ads are posted on pages that match your topics or, more narrowly, pages matching your keywords.

3. Place your ad

Make sure you’ve defined relevant KPIs and that your ads are supported with well-designed creatives. Then, once everything is in place, it’s time to place your ads. As with any campaign, it’s essential to pay attention to your data and measure your KPIs, testing and tweaking until you have a fully optimized campaign.

Like any marketing strategy, contextual advertising requires attention to detail and a commitment to optimizing. We have a few pointers.

1. Diversify: Don’t hyperfocus on one type of ad, such as search, social, or display. Additionally, don’t obsess over one set of keywords. Instead, widen your reach with a mix of ad types and keywords.
2. Know your audience: Making sure your ads reach the right audience means understanding your target audience inside and out. Knowing the sites they frequent and the topics they are interested in will help you find the right ad placements and ensure you use appropriate messaging.
3. Don’t ignore in-frequently used keywords: SEO has taught marketers to focus on search volume, but savvy marketers know to target the neglected keywords. In doing so, they avoid competing against bidders with deeper pockets and can carve out their niche. It’s also possible to combine keywords to find more contextually relevant placements.
4. Use a variety of multimedia.  Video ads are wildly popular in mobile apps. Rewarded video is even better. But the key to finding as many users and potential placements as possible is to design a campaign that reaches your target audience no matter where they are or what app or site their on. We say this with a caveat—Make sure to set an ad frequency to avoid spamming users.
5. Monitor to optimize: It’s worth reiterating the importance of monitoring campaign performance and adjusting accordingly. In the case of contextual advertising, it’s often wise to eliminate the poorest performing sites from your media mix and then focus more on the sites that drive performance.

Contextual ads are likely to be a central part of mobile marketers’ strategy in 2022 and beyond. If you want to learn more about the best ways to grow your apps, read Scaling your app to 1 million users: The ultimate guide. Part 1 — App store optimization and user acquisition.