Ahead of this year's ATS London, Bill Swanson, SVP of EMEA at Connatix analyses how the value of contextual targeting has evolved in tandem with the digital advertising industry.

The digital advertising space is always evolving. Between adjustments to the IAB Tech Lab’s ad format guidelines, app tracking on iOS, and cookie depreciation, this past year’s changes will undoubtedly alter the advertising ecosystem. Publishers and advertisers are preparing to meet the moment, and the updates are leaving an open window for contextual targeting to become a main focus.

Contextual takes the main stage

As video advertising grows at an unprecedented rate, there is a significant need to leverage contextual relevance to more efficiently and granularly target consumers. By displaying ads aligned with a website’s content, publishers and advertisers better connect with their target audiences. The industry continues to anticipate third-party cookie depreciation – as cookies become less and less relevant, more publishers, brands, and agencies are realising the power of context.

For publishers, the user experience can be significantly improved through contextually relevant content. A study from IAS found that endemically matched ads lead to higher memorability for consumers. Advertisers can not only better connect with their existing audiences but also expand them, using contextual targeting to reach more people based on their interests.

When done right, contextual targeting should deliver an excellent experience for the end user, ensuring they’re seeing and engaging with content related to their interests – based on their intent rather than demographic data. It's a win-win approach for both publishers and advertisers. 

The power of contextually relevant accompanying content

The most recent updates to video classification by the IAB Tech Lab opened a new field for accompanying content, creating a new advertising ecosystem that will lead publishers and advertisers to expand their content strategies. Previously, video classification in colloquial terms often relied on a binary model of instream/outstream – if something wasn’t instream, it was considered outstream, and vice-versa – despite the fact that “outstream” was never explicitly included in the IAB guidelines. The IAB Tech Lab’s latest update, which highlights the value of accompanying content, helps pave the way for contextual targeting to be leveraged more within video. The update also includes guidelines about user intent – it notes that “explicit demonstrated intent to watch the video” is suitable for instream classification.

Accompanying content exposes consumers to discoverable content that may not have been the original purpose of their site visit. For example, in the middle of watching a video about a certain topic, a person is served an ad about something else, whether another brand or category. In this case, that content may not have been the original purpose of their visit but they're still receiving an ad that is relevant to them in some way. Because that ad, or accompanying content, is presumably relevant to the consumer and their interests, it’s that much more valuable to advertisers and publishers. 

What’s next for publishers

With the IAB Tech Lab’s update, publishers will invest heavily in content, either through the development of their own content generation capabilities or by working with contextual targeting partners. These partners can help publishers gain content insights, create packages for advertisers, and recommend articles and videos for publishers to absorb. This shift to content has been driven not only by the eruption in connected TV (CTV), but also the shifting content consumption trends and the increasing popularity of social media/short-form video.

What’s next for advertisers

Advertisers will make a similar significant investment in their own contextual targeting strategies, hoping to reach more consumers by targeting their ads to the right audiences at the right time. In an age where video advertising is continuing to increase in prominence across screens and formats, there’s a great opportunity to contextually target beyond the page and article - into the video content itself - to provide buyers more CTV-style alignment between video content and video ad. The diversification of contextual methods, between page and video targeting, can allow advertisers to get more granular and specific with their targeting efforts. To that end, the industry needs more standardisation for recognizing the alignment between video- and page-level content.

In today's increasingly digital world where user experience is paramount, ad strategies must continue to evolve to stay competitive. The evolved IAB Tech Lab guideline changes, as well as other advertising transformations like app tracking transparency, have opened up a contextual opportunity for advertisers and publishers, taking the guesswork out of ad delivery by ensuring ads are matched to content – and, most importantly, creating a better user experience. As the industry processes these updates and looks ahead to a cookieless, evolving future, contextual will be the solution for publishers looking to increase their engagement efforts and amount of content watched by users – and for advertisers looking to stretch their ad budgets as they face an uncertain economic future.

Hear more from Bill at ATS London 2023 on June 13th and 14th at Central Hall, Westminster. Final tickets available now.