Contextual advertising and its types

Many entrepreneurs ask themselves: how to effectively promote their product or service? At the same time, they always work on increasing sales and developing the brand. In the modern world, most sales occur online. The Internet has become a powerful platform for promoting products, providing many opportunities for advertisers. Contextual advertising is one of the most popular promotion tools, suitable for many industries.

What is contextual advertising?

Contextual advertising, context, PPC and others – a format of online advertising, in which ads of a certain topic are displayed to the user depending on his location, time or context. This allows you to reach potential clients/buyers and increase sales efficiency. Contextual advertising is located on web pages that are displayed in search results, on websites, in social networks, applications and other online resources. To put it simply, it is the display of the necessary information in the necessary place to your target audience.

The information displayed can be very diverse – it can be information about a product, service, discount or simply an image (mention) of a brand to increase its recognition. Most often, such information has a commercial subtext – it offers to buy or order something. It is very rare to come across advertising on information resources or materials without any visible commercial benefit. But as a result, all contextual advertising brings profit to the customer.

Objectives of contextual advertising

Contextual advertising is universal and suitable for most businesses, solving a variety of problems:

1. Increased sales. Advertising allows you to attract customers who are already looking for specific products or services. In such cases, it works with existing demand, when the buyer clearly knows what he needs and is ready to buy.
2. Increased website traffic. Advertising helps increase website traffic by showing ads to people interested in similar content. This helps create a loyal audience or, for example, build a base of email subscribers.
3. Launching new products or services. Advertising quickly brings information about new products to the target audience.
4. Increased brand awareness: By showing ads to a user multiple times, you create the impression that your brand is widely known.
5. Improving the effectiveness of promotion. Contextual advertising allows you to precisely target advertising to the audience and display ads at times when users are most likely to make purchases.

It is important to remember that contextual advertising cannot solve all problems with one campaign. Each goal requires a separate advertising strategy. For example, one campaign can focus on increasing sales, and another on increasing brand awareness.

How contextual advertising works

The main idea of ​​contextual advertising is that it is demonstrated depending on the context – factors that directly or indirectly characterize the target audience, its interests and needs.

The main factors include:

• Search queries. For example, if a person searches for “washing vacuum cleaners,” the search engine will show them ads for stores that sell vacuum cleaners. Even if the query is about something less specific, like the history of Christmas, the user may be shown ads for holiday products.
• Theme of the sites. In this case, the ads appear on pages dedicated to a specific topic. For example, the user reads about eyelash extensions, and on the site, he sees an ad for beauty salons. Thus, the user’s interest can be turned into a practical need.
• Geolocation data. Advertising networks use information about a user’s location to show relevant ads. For example, if a person is in Turkey, they may see ads for hotels or tours of local attractions.
• Sociodemographic data. This may include parameters such as gender, age, marital status, and occupation. For example, a person who recently got married may be shown ads for real estate, baby products, or other family-related products.

In addition to the main factors, contextual advertising also takes into account many other details, such as the time of day and the device used. The more precisely the criteria for the audience are specified, the more effective the advertising message will be. These parameters can be combined and customized depending on how wide or narrow the audience the advertiser wants to reach. For example, an online store selling tree trimming tools can target advertising to both professional landscape designers and summer cottage owners.

Advantages and disadvantages of contextual advertising

Every year, the advantages and disadvantages of contextual advertising may change: approaches to setting up and managing advertising evolve, rates change, as do user preferences. However, contextual advertising retains several characteristic features that are worth considering.

Advantages of contextual advertising:

1. Flexible contextual advertising settings allow you to reach an interested audience with the correct keywords and targeting settings. This allows you to avoid costs for “warming up” the audience, since only interested users see the ads.
2. Powerful analytics systems like Google Analytics provide free services to analyze the effectiveness of contextual advertising. They help you understand whether your advertising is working or not and bring clarity to the results of your campaigns.
3. Contextual advertising has a low entry threshold, which means that you can launch an advertising campaign with a small budget and get your first sales. This allows you to start without large investments and test the effectiveness of advertising in practice.
4. Provides fast results. Search type of contextual advertising brings fast results, especially if it is set up correctly sales funnel. This means you can quickly attract customers and increase conversions.
5. Return on investment is one of the important advantages of contextual advertising. Provided that the strategy is adjusted in a timely manner and the ads are optimized, the invested funds will pay off. This allows you to use the budget effectively and ensure maximum return on the advertising campaign.

Disadvantages of contextual advertising:

1. High competition. In popular niches, there is a fierce battle for the top positions in search results, especially in the field of in-demand services.
2. High cost. The price per click is formed on the basis of an auction – the one who offers more takes the leading position. In some areas, the cost per click can start from 500 hryvnia.
3. Short-term results: While an ad campaign may bring in some quick traffic, the volume will drop off dramatically once the campaign is over. In contrast, SEO promotion can continue to bring traffic even after the work on the site is completed.
4. The need for constant monitoring. Launching an advertising campaign is not enough. To work effectively, you need to constantly monitor it, which is best left to a specialist. Otherwise, you can lose your budget on non-targeted clicks. It is important to regularly analyze conversions and turn off ineffective ads, as well as compare the cost of clicks with the profit from transitions.

Types of contextual advertising

Contextual advertising is displayed in search results in response to user queries, as well as on many third-party sites. In fact, such advertising can appear on almost any resource on the Internet, in one form or another, and we will consider them below.

Search advertising

This is a type of online advertising that appears on search engine results pages. It works on the principle of targeting: users see ads based on their search queries. This allows for high accuracy and relevance, as the advertising is aimed at people who have already shown interest in a certain product or service.

Such ads are displayed in response to a user’s query. For example, if a person searches Google for a math tutor in Kyiv, along with organic results, he will also see paid ads marked “Advertisement”.

Contextual advertising is targeted at user queries, as it uses keywords that the user enters into the search bar. Algorithms analyze these queries and show your ads to the appropriate audience. This way, you get “hot” leads, and potential clients get access to the goods or services they are looking for.

Product advertising

Shopping ads are the most popular format of contextual advertising, which are cards with products, including an image, name, price and a link to the site. They are displayed at the top and side of the search results, as well as in specialized sections, for example, in Google Shopping.

The settings for this type of advertising are different in different search engines. In Google, product ads are launched through the Google Merchant Center (GMC) service, where you need to upload information about the products. The advantage of GMC is that in addition to paid placement, a free promotion option is available there.

Display advertising

The key feature of media advertising is a bright visual presentation. The main goal of such ads is not instant sales, but the presentation of the product and familiarization with the brand. This type of advertising helps to increase recognition among the target audience. Media advertising formats include banners, branded pages and videos.

Display advertising is also effective for retargeting, when you address users who have already visited the site but have not completed the purchase. Such ads “follow” the user across other sites, reminding them of the product or service and offering, for example, a discount. Banners are most often used for this.

The most popular platform for multimedia advertising at the moment is the Google Display Network (GDN). There are a huge number of small platforms, but there is no point in focusing on them.

Video advertising

This type of advertising has become especially popular since about 2016. When Google began to introduce advertising to YouTube through the Adwords advertising account and developed various types of advertising when watching videos. Other large video hosting sites, such as Vimeo and others, also follow the trends.

According to the method and time of display, advertising is divided into several categories:

• Pre-roll (pre-roll) – the ad starts playing before the main video. Very often you can skip the video after you have watched it for 5-10 seconds, but it may not be there. And you will have to watch the video to the end.
• Mid-roll (mid-rolls) – videos that are played during the main video while it is paused. The ad may be shown several times during the entire viewing. The number of ad impressions will depend on the popularity of the channel – the more popular the channel, the more commercials there will be.
• Post-roll (post-roll) – these commercials are shown only at the end, after watching the main video. But the popularity of such types of advertising is less than the first two, since it is possible to close the page without watching the advertisement.
• Overlay (overlay) – this type of advertising pops up on top of the main video, that’s why it’s called over – “top”, lay – “layer”. The pop-up message can be text and graphic or graphic with a calling text, and when clicked, it transfers to an advertising or landing page. This type of advertising can be easily closed without consequences for the page and video viewing.

Discovery campaigns

Google Discovery Ads are visually appealing text and image ads designed specifically for mobile devices. These ads are based on user intent, which is determined by Google signals, such as website visits, app downloads, video viewing, and map searches. The system segments users into audiences based on their activity and displays ads that are relevant to each specific user.

The goal of these ads is to offer the user what they need before they even realize they need it. Unlike traditional search ads, which respond to existing demand, Discovery Ads help create new demand.

There are two types of ads available in Google Discovery campaigns:

1. Standard Discovery ads (single image).
2. Discovery carousel ads (4-8 images).

Advertising for applications

Depending on the type of mobile device, applications are placed in the App Store or Play Store. To place an advertisement, a specialized network is used, which serves as a bridge between the advertiser and the publisher. The advertiser acts as a buyer, and the application acts as a seller.

To promote products and brands, the advertiser purchases advertising space. In addition, there is an exchange where advertisers can select a target audience and place bids. For advertising to be effective and profitable, it must be set up correctly. The main parameters include the user’s gender, age, and geographic location. Additionally, people’s interests and behavior are taken into account.

For example, in a fitness app, an ad network might show ads for an online store’s sporting goods. In most cases, user data is collected automatically through apps, social networks, and search engines.

For what business is contextual advertising a good choice?

Contextual advertising is universal and can be used by almost any business, regardless of its scale and area of ​​activity. However, from experience, it is especially effective for the following categories:

• tourism and hotel companies;
• car dealerships and service centers;
• construction companies and real estate sellers;
• companies offering information products;
• medical institutions (subject to certain restrictions);
• entrepreneurs providing specific services;
• online store owners;
• corporate websites with a clear list of services;
• private legal and notary firms.

To summarize

Contextual advertising is an effective tool for promoting companies and brands in the online environment. Its main principle is to reach potential customers at the moment when they are actively searching for information about goods or services, which increases the possibility of attracting attention and increases the chances of conversion.

In this article, we looked at the main types of contextual advertising, each of which has certain advantages and is effective in different situations. Optimal use of contextual advertising in combination with other marketing tools is a key factor for success in today’s competitive online space.

Serhii Ivanchenko

CEO

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