Contextual advertising is not outdated in a digital world, and GroupM Nexus’ Deepika Nikhilender says strategic use of contextual targeting can translate to better outcomes unique to the brand’s business challenges.
Since the earliest days of advertising, context has always been king. From specialist magazines to television programme plans, placing an advertisement based on a medium’s audience has played a critical role in driving brand growth.
Simple contextual targeting strategies have been utilised extensively for many years by marketers and brands to connect with consumers in a brand-safe, suitable and relevant way. However, with the last decade’s explosion of programmatic and digital targeting, contextual placements have been sidelined.
But a resurgence is long overdue. With third-party cookies facing retirement, marketers seek new ways to create meaningful, personalised campaigns without the hyper-targeting technology of recent years.
Re-enter contextual advertising, a method with decades of proven history and compliant with Southeast Asia’s tightening privacy laws.
A new era
The previous decline of contextual advertising goes back more than a decade. With the fall of traditional media outlets and the rise of digital advertising, marketers quickly became enamoured with the seemingly unlimited possibilities offered by third-party data collection and hyper-targeting technology.
Tracking cookies and location data have enabled marketers to finely pinpoint specific individuals with highly relevant ads. However, over the years, this has drawn fierce concern around data privacy. Now, with governments responding to these concerns with tighter regulations and guidelines, it is no surprise that the industry will soon say farewell to third-party cookies.
As contextual signals are identified using technologies like AI, being less impacted by changes in local privacy legislations (GDPR, CCPA, PDPA) and the gradual deprecation or restriction of third-party cookies across browsers, they are in resurgence.
Asia Pacific is home to a diverse range of people, ethnicities and cultures, not to mention 60% of the world’s population. Here, brand marketers are aware they cannot simply use a uniform, one-size-fits-all approach to advertising and expect great results. Moreover, what may seem like a fun, harmless ad in one market may spark fierce backlash in another. Given this backdrop, it is unsurprising that APAC marketers may have sidelined contextual marketing in recent years. However, their perceptions of contextual marketing have long been outdated.
In the digital era, contextual ads typically appear alongside similar content, targeting consumers via the context of their consumption. An internet user watching beauty tutorials is, for example, more likely to be shown ads for make-up. A recent study revealed that audiences in APAC are extremely receptive to contextually relevant ads. And in APAC, contextual relevance is preferred across all verticals.
While traditional contextual ads deal with wide audiences across much broader demographics, today’s contextual strategies can work with highly specific content that audiences are passionate about. In the same way as programmatic advertising, consumers still demand personalised experiences. Now, contextual advertising provides a way for advertisers to deliver relevant and targeted messages without infringing on user privacy. This will be key in the coming years.
Driving purpose and outcomes
The deprecation of third-party cookies and backlash against the share of non-consented traffic means privacy and transparency must be central to any advertising strategy in 2023.
In contrast, contextual targeting does not rely on any personally identifiable information and therefore does not require large amounts of data or consent to work. Thus, marketers are compelled to identify and analyse content rather than the user, making contextual advertising more respectful of customer privacy while still providing expected efficiency.
In addition, contextual advertising erases banner noise. Customers are so used to banner advertisements peppering their screens that they have developed banner blindness to ads that do not resonate with them. This means they are subconsciously overlooking irrelevant advertisements without engaging or converting. However, contextual targeting can help tackle this issue simply by serving relevant ads that fit seamlessly into the content being consumed.
Most critically, contextual advertising drives outcomes and significantly boosts brand favourability and consumer purchase intent. Indeed, consumers were 14% more likely to purchase from an in-context ad than otherwise.
Additionally, the in-context ad generated higher brand favourability among participants, resulting in a 5% increase when compared with consumers viewing the out-of-context ad. Ostensibly, contextual advertising has a place in modern, digital campaigns. But what are the next strategic steps as technology advances?
- First, marketers can expect to see the use of artificial intelligence (AI) in contextual campaigns. AI-powered technologies are enabling advanced content analysis using a combination of text, natural language processing, audio and image recognition to provide a more accurate and nuanced understanding of context and sentiment in the way that a human would.
- Additionally, marketers will increasingly be able to leverage neuro-programmatic technology, which attempts to match the emotional content of the ad to the content with which the consumer is engaging and thereby the emotions of the consumer. Once achieved at scale, this will ideally bring the same efficiency and speed as the use of behavioural and demographic programmatic targeting.
Today, digital out-of-home (DOOH) campaigns have become shining examples of how AI-powered contextual targeting can drive brand engagement and increase onsite sales, as seen in a standout DOOH campaign for Veeba Sauces that effectively targeted upper middle-class consumers as they passed three key touchpoints at supermarkets across Delhi.
Standing out among competing brands in stores was a challenge, so the campaign focused on three major touchpoints:
- Before customers enter the store
- At the store
- At the billing counter
GroupM Nexus’ programmatic solution, Xaxis, utilised its proprietary platform intelligence to display targeted messages supported by mobile activity to users within 20 metres of the DOOH location. The campaign helped increase sales of Veeba Sauces by 15% across the stores in Delhi.
Contrary to perceptions of being outdated and unfit for the digital world, contextual advertising has become an efficient solution for marketers and is no more a binary or an either/or choice. Having evolved in its sophistication and application across the digital web and app-based environments, it has now become a vital consideration in a brand’s media and marketing plans.
Strategic use of contextual targeting has the potential to translate to better outcomes unique to the brand’s business challenges and thus increase return-on-digital media investments.