Contextual or Behavioral Advertising? What’s Best for Your Business?
When it comes to Contextual versus behavioral advertising, should your business use one over the other for digital marketing, user experience, and brand image?
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Digital advertising has revolutionized the world of marketing. Gone are the days when you relied solely on a billboard that you hoped would be seen by people who might be interested in buying your product or service.
Now it’s possible to deliberately place your ad right in front of those who are most likely to buy. With the advent of the internet (and now smartphones), the marketing industry can place your ad right where everyone’s attention is – online.
The two most common ways of doing this are contextual and behavioral advertising, with the latter being the oldest and most traditional method. But times are changing in the digital space, and contextual ads are becoming more popular, with around 79% of consumers being more comfortable with them.
Both are unique in their approach and have their pros and cons, so whether you’re super familiar with one or the other or are completely new to these concepts, we’ll now break both of them down so you can see what might be best for you.
What is contextual advertising?
Contextual advertising is environment-based and congruent with its surroundings. What this means is that an ad will be connected to the page it is displayed on.
For example, if someone was reading the weekend football results, they might see an ad close by selling football kits. Because the person is already looking at football-related content, it stands to reason that they might also be interested in purchasing the kit of their favorite team.
This type of strategy keeps the ads relevant and non-intrusive. Consumers are waking up to how they are tracked online, seeing ads pop up for something they were looking at days, if not weeks ago. Making online advertising fit with what they’re already perusing makes them less annoying or creepy.
And with the consumer already being in a particular frame of mind (searching for football scores), it makes them a lot more open to seeing ads that are selling something related to what they’re currently looking for. They might even see it as helpful if they’re in the market for that particular product.
How does contextual advertising work?
Contextual advertising can be operated through a demand-side platform (DSP), such as BrightRoll, AdRoll, Amazon DSP, or via the Google Display Network. Once this is set up, you can decide upon the parameters which will determine how and where your ads are placed.
For example, if you use Google, you will employ various keywords and topics to help keep your ads as relevant and on-point as possible. So if you are a bicycle shop, you can use ‘bicycles,’ but you could also narrow it down further if you wanted to include specific items such as tires or helmets.
You can go even further than this and specify demographics or geographical locations to niche down as much as possible and target with laser-focused precision. Using all this supplied information, Google will then strategically place your ad on the most relevant web pages for consumers to see with the help of Google Passages.
Compared to Facebook, Google is particularly effective when it comes to contextual advertising because it crawls billions of websites every day and therefore knows where your ads would be most suitable. And the technology keeps improving with more advanced algorithms, and now artificial intelligence (AI) is being utilized in ad placement.
What is behavioral advertising?
Behavioral advertising is about targeting the individual as they browse online, regardless of what they’re currently looking at. The idea is to make sure all ads are relevant to the specific user based on their previous behavior and habits.
For example, a businesswoman might be looking at a call center platform one day and then see an ad for the same service later on. By doing this, the ad is being personalized and offered up to the individual by way of specific targeting.
This can be a useful way of advertising as many people browse the internet with abandon, shopping in various places and looking at many different products every day. So to cut through the noise and, in effect, remind the consumer of what they had been looking at before can be a powerful strategy.
How does behavioral advertising work?
Behavioral advertising (which is sometimes referred to as demographic or audience targeting) serves ads to the consumer based on their previous web-browsing activity. Their data is collected with a user identifier such as a tracking pixel or cookie.
This data is stored in a programmatic advertising demand-side platform (DSP) or a data management platform (DMP). The information stored includes time spent viewing various content, what ads were clicked on, and specific web pages visited.
The data is then analyzed and used to form target audiences with the same online search and shopping habits. So if someone has previously clicked on ads for gym memberships, it can be gleaned that they have an interest in this.
Differences between contextual and behavioral advertising
It’s very easy to mix up these two types of advertising, and both can be highly beneficial to your business, offering a significant ROI and consumer experience. But what are some of the more nuanced differences?
Firstly, behavioral advertising relies on cookies. This is how it can be so stealth-like in how it operates. In itself, this can be very powerful as it can nudge consumers to purchase something they were looking at previously.
One of the huge drawbacks of this is that privacy legislation and the use of third-party cookies are making this method much harder to employ. Indeed, now users have to opt-in to allow their cookies to be used in this way.
There is also the question of cost. Historically, behavioral advertising has cost a lot more to implement. This is because of the method of data collection etc. The advantage here is that it can be much more personalized and targeted, which can, in turn, lead to a greater ROI.
The downside is that if you’re a startup or small business, you might not have the capital to invest in behavioral advertising, especially when the outcome is not guaranteed.
This is where contextual advertising can be the better option for some. It’s cheaper and therefore has a lower bar of entry. You won’t need to employ more people or invest in expensive tracking technology to get started, and you can tweak it as you go.
Contextual advertising is congruent with your audience’s environment. This means that if they’re looking for recipes, your ad about steak knives might appear alongside a recipe. The huge upside of this is that they’re already thinking about cooking. Maybe they’ve needed some new steak knives for a while, and this is a “right place, right time” moment.
On the other hand, someone might be looking at alternatives to apps like Vonage and keep seeing your pop-up ad for didgeridoos, simply because they were looking at some the previous day.
There’s nothing wrong with this. Indeed, you might be reminding them to make a purchase they had already forgotten about. But the point is that they’re not currently in a didgeridoo mindset—they’re in a different mindset. And your ad could have the effect of annoying them or, even worse, making them suspicious and distrust your brand for stalking them.
A new phenomenon has also developed in recent times—banner blindness—where people become so used to seeing pop-up ads all over the place online that they don’t even see them anymore. This is not an ideal scenario if you’re optimizing text ads and have already spent money on capturing attention in this way.
Another downside of behavioral advertising is that it’s browser-specific. This means that if you share a home computer with your family or a partner, and use the same browser, you might end up seeing ads targeted at someone else.
Because contextual ads only appear on relevant websites, there’s no danger of this happening. Your advertising will be in alignment with what the consumer is already looking at. In this sense, it’s a more subtle and, one could argue, more effective way to reach a potential buyer with your product or service. All this affects the user experience and is important when considering what method to adopt.
A huge advantage of contextual advertising is that you know your ads will only appear on sites that apply to what you’re selling. For example, your yoga studio ad will only appear on yoga-related sites. This is not the case with behavioral advertising.
With behavioral advertising, your ads might appear anywhere. This is both good and bad, but think of how it would look if your advert for cat food appeared on an adult site simply because of the data you’ve inadvertently collected on a certain user.
This has happened to some big brand names in the past and has damaged their reputation. It has looked like they’re working alongside companies they would not otherwise have a conscious association with. It’s worth considering these kinds of unfortunate side effects before investing in online marketing. Ideally, you want as much control as possible to avoid these kinds of pitfalls.
The way forward—what’s best for your business? (what do you want to accomplish?)
In the contextual vs. behavioral advertising debate, there is no black-and-white answer. Both have pros and cons; ultimately, it depends on your business and which would be the best fit.
But with increasing privacy legislation and shifting awareness of consumers, it might be worth thinking about diversifying if you currently have all of your eggs in the behavioral basket. There is also less cost going down the contextual route, so if you’re a startup or prioritizing providing proactive customer service above marketing costs, then it will no doubt be an attractive option.
So, research, experiment, and find your best fit, but don’t forget that the digital marketing space is constantly evolving, so what might work for you now may well change in the not-too-distant future. Stay on top of new developments within the space and keep tweaking your campaigns – and don’t forget to have fun with it!