“CTV, digital OOH, audio: they all have elements of contextual,” declared Connatix’s Bill Swanson, at this year’s ATS London. Certainly, as the ad industry hurtles towards cookie deprecation, the revival of contextual advertising has only gained momentum.

This year, global spend on contextual advertising is estimated at USD$227.38bn (~£186.24bn), a figure that is expected to double by 2030. In this article, we explore how the resurgence of contextual advertising could shape the privacy-first landscape, analysing the benefits and challenges the medium brings.

Data, data everywhere

Contextual advertising is, in theory, a no-brainer when it comes to the privacy-first landscape. By focusing on the environment in which an ad is served, as opposed to individual user behaviour, the medium completely bypasses the privacy concerns that surround tracking internet users across the web. 

This does, however, mean that advertisers leveraging contextual have to take a different approach to data analysis. The efficacy of contextual advertising campaigns hinge on a clear understanding of the environment in which adverts could be served, and so having the capabilities for this is critical for success. This has been something of a challenge for advertisers in recent years, as contextual solutions lack the personalisation capabilities of targeted advertising. With more than 70% of consumers expecting personalised experiences from brands, contextual’s limited ability to reach specific demographics or behavioural groups could pose a major hindrance for advertisers.

Additionally, advanced algorithms that can maintain pace with changing environments are needed to interpret the content of web pages quickly and accurately, and a clear, universal solution offering this is yet to be determined. The rapid evolution of AI over the last year may help to mitigate this barrier, with new developments allowing programs to interpret language with an elevated level of understanding. With a refined comprehension of sentiment, tone, and themes, AI programs can process more nuanced data to serve the most timely and relevant ads. While the technology is still evolving, AI holds a lot of potential for bringing contextual advertising’s ability to analyse data with a human-like level of understanding on par with its privacy-centricity.

Your attention, please

Attention has always been a critical component of the advertising landscape and, as audiences have become increasingly fragmented, consumers’ attention has become increasingly elusive. With regards to contextual advertising, marketers hoping to capture and maintain individuals’ attention are met with an even greater challenge. Without relying on personalised data, contextual advertising is not as well-equipped to deliver attention-grabbing ads with individualised appeal. To avoid blending into the background of a webpage, especially in content-heavy environments like a news site, advertisers can focus on crafting creative content that grabs and maintains users’ attention. This can be achieved in various ways; Nike’s 'Own The Floor Campaign' in Japan, for example, leveraged the popularity of dance in the Northeast Asian region to deliver an impactful video and OOH campaign. Coffee start-up Grind, meanwhile, utilised hyper-localised copy and ad placements, delivering an OOH campaign on the London Underground to grab the attention of workers on the morning commute. “I think the agencies are starting to think about how to grab the attention of users now and so placement matters more than it used to,” says SmartFrame’s Zivile Vaisvilaite. “The winning formula [advertisers are] seeing is the context, the placement and the creativity.”

Is context really king?

Privacy centricity is not the only benefit contextual advertising can offer. By utilising real-time information, such as content on a webpage, contextual ad campaigns are typically more cost effective than those based on amassing lots of personalised data for behavioural targeting. Additionally, the medium’s focus on real-time data over historical data, allows it to keep pace with consumers’ needs on a day-to-day basis: for example, a person shopping online for a new phone one day may search for sports equipment the next. While behavioural targeting would result in their hunt for kettlebells being accompanied by ads for Carphone Warehouse or BackMarket, contextual targeting would complement their browsing experience with relevant ads that enhance their shopping experience. With consumers served contextual ads 32% more likely to act than those targeted based on demographics, the impact of relevancy cannot be overstated.

Nonetheless, contextual is not without its flaws. Measurement of campaign success remains a challenge, with Swanson noting that, “there are various different metrics but, fundamentally, we and the publishers are driven by what the buyer is looking for”. Without standardised metrics, it is challenging for the industry to gain a unanimous understanding of campaign performance. Zenith Global’s Daniel Sichel notes that a lack of standardisation creates a task for agencies to convince clients that, “if [they] are in environments showing a relevant ad, [they are] more likely to generate engagement than in an irrelevant environment”.

Additionally, while measures have been put into place to enhance brand safety in contextual campaigns, it remains controversial amongst some publishers. The practice of data scraping and analysing intellectual property that comes with the medium has, understandably, caused some publishers to call for compensation, with some going as far as decrying it as theft. As of the writing of this article, an end to this push and pull between vendors and publishers shows little sign of being resolved; while The Guardian’s partnership with Illuma made headlines back in April, similar deals to remunerate publishers are yet to be forged.

Ultimately, while contextual has its drawbacks, the medium holds a lot of potential for the privacy-first future. As the deprecation of third-party cookies draws nearer, marketers must prepare for a monumental shift in the advertising landscape. With so much in flux, contextual advertising may present a safe and reliable – albeit, flawed – method to see the industry through this period of significant change. Additionally, like OOH, contextual is a medium which has largely kept pace with evolving technology. With this in mind, advancements in artificial intelligence may offer some resolutions to the shortcomings of contextual and bolster its capabilities for omnichannel campaigns – only time will tell.