The advertising industry is undeniably facing significant challenges. Yet advertisers can work around economic uncertainty. Rather than slashing budgets, a shift in focus to enhancing campaign performance and improving targeting capabilities is key. As our industry collectively moves toward a digital world with data privacy regulations and a deprecation of cookies, marketers have revitalized their interest in today’s contextual targeting in order to reach relevant audiences.

Not only has contextual targeting advanced beyond keywords over the past decade, according to Nielsen research has found greater acceptance among consumers towards contextual ads presented within relevant environments. They found a 32% increase in consumer interest in advertising found through contextual targeting, and a 2.5x greater interest in consumers exposed to contextual targeting.

“The contextualization available today can significantly improve the accuracy, relevancy, and usability of targeting models and ultimately drive greater ROI while ensuring brand safety and privacy of users”,

explains Linda Rúiz, Directora Regional de MGID para Latinoamérica. The beauty of contextual advertising is that it targets the content consumers view rather than individuals themselves. This means audiences receive relevant advertising tailored to the environments in which they appear, and, by association, the audience’s interests. Moreover, users’ personal data is not compromised, providing a viable addressability solution for the cookieless world.

Personalized advertising, which has been heavily embraced by digital marketers over the last decade, is based on the advertiser’s ability to deliver relevant, timely and engaging messages that resonate with users’ intents.

Contextual ads can also be more effective than search ads depending on advertisers' objectives. They allow advertisers to target broader audiences that could potentially be interested in products but are not yet actively searching for them. With search ads, which limit advertisers to high-intent audiences who are already searching for information, reach is reduced and high-value potential audiences are excluded. Up until now, the emphasis has been set on audience-based targeting via cookies. However, the privacy regulations, such as GDPR, and phasing out of third-party cookies from the most popular browsers moved a scale towards contextual solutions.

Contextual targeting uses first-party data and allows users to preserve data privacy and the ads are served to the audience in the context that is particularly relevant and engaging for the brand.

“Our proprietary technology uses Contextual intelligence to detect content sentiment, rather than just the words contained within it. Natural language processing (NLP) is a vital part of contextual advertising, as it’s through this technology that the overall feeling of a webpage is recognizable”, close Linda.

"Detecting context, sentiment and the words themselves is a winning combination, and hugely advantageous when determining ad suitability. For consumers, this means receiving adverts that have been placed according to the relevancy and appropriateness of their surrounding content, without their personal data being used at any point in the process."

For now, both types of targeting, contextual and audience-based, are relevant in the advertising ecosystem. However, as it becomes easier to achieve a fine-grained classification of web content and ensure ads are accurately matched to the most relevant content, contextual is likely to challenge the primacy of cookie-based advertising.