GLOBAL: The combination of restrictions imposed by GDPR and advances in machine learning is encouraging brands to experiment with context as an alternative to audience-based targeting, a new WARC report says.

A WARC Trend Snapshot, Contextual Advertising, notes that using context to improve the effectiveness of marketing communications is as old as the ad industry itself, but that this frequently has become a secondary consideration as marketers have targeted audiences through programmatic advertising.

They have been rethinking that approach following last year’s brand safety scares which prompted many to shift spending to premium publishers and this year’s introduction of GDPR which rendered much consumer data unusable.

“Clients have pulled campaigns and paused programmatic budgets indefinitely,” according to Mark Bembridge, chief executive of ad tech firm Smartology. “Context is increasingly being seen as a critically important replacement for audience targeting while the industry re-assesses the impact of GDPR.”

Some observers take a cynical view of ad tech companies pivoting to contextual solutions. “It is absolutely because their ability to use data in a compliant and legal way is no longer there,” said Robin O’Neill, managing director of digital trading at WPP’s GroupM.

But a new generation of ad tech firms is promising to make contextual advertising more effective than the basic keyword reading of old. And Bembridge insists that contextual ads deliver higher engagement based on pre-click, click and post-click metrics, and that developments in natural language processing technology ensure the disambiguation of homonyms such as ‘apple’ and ‘coach’.

Nor is it just digital platforms that are turning to context – UK broadcaster Channel 4 claims its recent work using AI to place contextual ads doubled ad recall.

But if context is to become the key method by which brands reach relevant audiences, there must be a dramatic increase in the volume of digital inventory, the Trend Snapshot says.

By only running ads alongside specific types of content, this automatically rules out swathes of the web – from publisher homepages to social network feeds. The identification of white-listed brand safe sites further reduces inventory levels, as does the overlay of any location or demographic targeting.

O’Neill believes the industry will also have to reconsider how it labels different types of online content: “We’ve got ourselves into a situation where we use the terms ‘premium’, ‘quality’ and ‘brand safe’ interchangeably, and that is not right.”

Sourced from WARC