Our job as marketers is to engage and educate our existing and potential customers about our products and services. Both contextual and behavioral targeting are useful tools for doing just that by ensuring that ads are placed in front of users who are most likely to make a purchase. But which is most effective?
This article reprint from StackAdapt outlines everything you need to know about contextual and behavioral targeting and how to optimize these best practices as you move forward with your marketing plan for 2023 and beyond. Read it here.
Embracing Contextual vs. Behavioral Targeting
Behavioral targeting has long been one of the default targeting methods on a marketer’s programmatic campaign checklist. Since the 1990s, the cookie has made tracking in-browser user behavior a valuable tool for targeting digital ads toward receptive consumers. But with new regulations around the use of cookies, behavioral targeting will need another tactic to supplement—which means it’s time for advertisers to consider using contextual vs. behavioral targeting.
Some browsers are phasing out 3rd-party cookie tracking. This means that behavioral advertising will be more restricted in the coming years. Marketers will need to adjust by embracing new targeting methodologies, like contextual targeting.
To prepare you for these changes, we’ll explain the benefits of both targeting methods, when to use them and how to leverage them for best campaign performance results.
Behavioral vs. Contextual Targeting
Let’s look at the differences between contextual and behavioral targeting.
Behavioral Targeting vs. Contextual Targeting
Let’s look at the differences between contextual and behavioral targeting.
Behavioral Targeting |
Contextual Targeting |
|
| Leverages cookies, and may be affected by evolving privacy regulations concerning the use of cookies in browsers. | Not subject to privacy regulations because it doesn’t use or collect cookies. | |
| Relies on hard, historical data of users’ search history and what sites they spend the most time on. | Uses context of a user’s search “journey” to show them the right ads. | |
| Limits control over the website on which your ads appear. | Ads align with what a user is searching as well as with their values, which allows for advertising without sacrificing your reputation. | |
| Historical data or past behaviour may not always be relevant because it may not align with the user’s current needs or buying patterns. | Contextual ads are always relevant because they’re based on what a user is actually searching, watching, or reading. |
Since contextual advertising focuses on what the user is currently seeking on the internet, it offers the opportunity to align with a user’s current frame of mind. This can lead to higher conversion rates with contextual vs. behavioral targeting.
But, this doesn’t mean contextual is the “be all, end all” of programmatic advertising. Both targeting methods interplay and have their place in your overall marketing mix. Therefore, it’s important to understand behavioral as well as contextual targeting, so you can leverage each one effectively to optimize your campaign performance.
What is behavioral targeting?
Behavioral targeting, often referred to as audience targeting or demographic targeting, aims to ensure that an ad is relevant to the user visiting a page. This is done by serving ads based on a user’s web-browsing behavior. User data is collected from various sources using a user identifier like a tracking pixel or cookie.
Data collected from pixels is stored in a data management platform (DMP) or a programmatic advertising demand-side platform (DSP). Some of the data will include information about page visits, ad clicks, or time spent viewing particular content.
The resulting data is analyzed and used to create targetable audiences that represent specific shopping and search habits. For example, if a user clicked on ads for espresso makers, it can be established that the user has an interest in this product.
Behavioral targeting relies on the user’s past actions to understand the kind of purchase they are likely to make. If a user performs an action, online or offline, they will enter a user pool or audience list. A cookie or online identifier is then applied to each user in this group. Once an identifier is linked to a user, it can track them as they browse the internet and serve them ads based on their behavior.
The benefit of behavioral targeting is ensuring your ad is relevant to the user viewing it. This targeting method has been widely used in online advertising for over a decade. And as the collection of user data becomes more advanced, so has behavioral targeting capabilities.
One of the primary differences between behavioral vs. contextual targeting is that behavioral targeting is focused on the viewer specifically, and not the content of the page on which the ad appears. Let’s take a look at a brief example.
There are two people living in a home that are using the same computer. One is interested in power tools, while the other is interested in baking. If our baker is the one interested in making an online purchase, seeing power tool ads isn’t appealing to them. In the case of behavioral targeting, they may still see those types of ads based on the behavioral history on that shared device.
In this same scenario contextual advertising would ensure the baker is served ads based on what content they are browsing. If they are browsing recipes on a baking blog, contextual targeting will align with that content.
What is contextual advertising?
Rather than targeting ads based on user behavior, contextual advertising targets ads based on the environment in which the ad appears. This targeting method uses algorithms to target ad placements based on keywords, website content, and other metadata. This way, ads are shown to users based on the content they are consuming at that moment in time.
The main difference between contextual vs. behavioral targeting is that behavioral targeting focuses on ensuring the ad is relevant to the user. Contextual advertising targets based on the context of the content on the page where the advertisement appears.
In this way, contextual advertising essentially targets users while they have a particular frame of mind—based on the context of the page they are viewing. For example, if a user is reading a blog about coffee, they could be served ads for coffee beans or coffee makers since it’s likely that the user is thinking about coffee-related products at that time.
Because contextual targeting displays the right ads to your users at the right time, it also helps businesses preserve their brand image. Ads related to what a user is searching that display in real-time are more likely to be seen as helpful and informative.
How effective is contextual advertising?
Showing your potential customers what they’re looking for, and when they’re looking for it, is just one feature that makes contextual advertising so effective. This alone is reason enough to embrace this targeting method, but in fact, contextual advertising has other benefits. Here are 4 reasons why contextual targeting is both effective and beneficial:
- This targeting tactic allows you to reach users when they are in a receptive frame of mind. When a person is browsing content about a specific topic, it signals their intent at that moment, instead of targeting based on their past actions.
- Contextual targeting isn’t constrained by privacy legislation. Because it doesn’t collect or use information about users, it protects user privacy. Instead, it leverages the context next to which the ad appears.
- If your DSP offers an advanced contextual advertising solution, it will provide an opportunity to target niche contexts. You can choose to target by a general topic or use a collection of phrases for more precise targeting. Instead of targeting “coffee,” you can use input phrases like “organic coffee beans,” “organic coffee,” and “dark beans” to narrow the context even further.
- Since contextual advertising campaigns are served programmatically, you can review real-time metrics and optimize your contextual advertising performance. Your DSP should allow you to verify that your ads are served on relevant domains pre- and in-flight. This gives you the ability to revise your selected topics and phrases in real-time to improve the performance of your campaigns.
Since contextual ads reach consumers in the right frame of mind, less money is spent reaching your ideal customer. You may also see above-average conversion rates on contextual campaigns for the same reason. This adds up to an increased return on ad spend (ROAS), and it’s all possible because of the unique way that contextual advertising targets.
How Contextual Advertising Works
We’ve covered the features of contextual vs. behavioral targeting. But how does contextual advertising actually work? Let’s dig into the basic process for contextual ad placement.
If your DSP offers contextual advertising, the platform will do the heavy lifting of placing your ad on web pages that meet your targeting parameters. Once you have your creative all set to go, you’ll set up your custom contextual strategy.
Here’s an example of how it works: in the campaign setup, identify in context and out of context phrases for your campaign. Then, an algorithm will determine the best ad placements based on a publisher or site’s content using contextual artificial intelligence (AI). With contextual AI, targeting can be expanded further to include relevant phrases related to the context.
This becomes an essential tool, because how users “speak” when they search online may be different than how they talk to each other. Leveraging AI allows your contextual campaign to pick up on variations of your primary target term, known as semantic keywords, to help you show up in related articles. Increasing your visibility this way increases sales which, ultimately, boosts revenue.
But how does your DSP know which websites to match to your ad? Contextual advertising works based on a crawler. This crawler “crawls” the web and records the information on each web page. When someone visits a particular webpage, the information of that page is processed by your DSP and if it matches the selected context of your advertisements, they are placed on the page.
An important nuance to note is that the best context isn’t always the same as a campaign’s landing page. When advertising vacations to Florida, the right keywords should hone in on the mindset of someone who would be receptive to the idea of a vacation and warm weather. In this case, targeting phrases related to bad weather could capture the right user intent for the campaign.
Which method is right for you?
If you’re wondering whether to implement contextual targeting or behavioral targeting in your campaign strategy, the short answer is you should be using both. It goes back to the customer journey concept we mentioned earlier. Despite the growing amount of online data collected daily, it’s still impossible to 100% predict human behavior. That’s why using both behavioral and contextual advertising strategies is so important.
While it’s easy to think of contextual targeting vs. behavioral targeting in terms of features, because they’re different methodologies, the true power of these tools comes from using them both together. Using a mix of both contextual and behavioral targeting prepares you to capture a conversion at multiple points along the customer’s journey, even if you don’t know exactly when or how a potential customer will come to their purchasing decision.
How to Balance Contextual Advertising With Behavioral Advertising
With the cookie still relevant in many environments, most advertisers are continuing to rely on their well-established behavioral strategies. We understand—it’s comfortable to stick to what you know! But since the digital advertising landscape is evolving, now’s the time to consider how to introduce contextual vs. behavioral targeting and how they both fit into your existing strategy.
This doesn’t mean abandoning your behavioral campaigns. Instead, strike a balance between these methodologies so that you can slowly introduce contextual tactics. Blending both methodologies will make for a well-rounded strategy and help you gain more confidence in running contextual campaigns. Rather than waiting until legislation makes the use of cookies unavailable in some environments, get ahead of the curve and embrace contextual advertising now.
