What is Contextual Advertising?
Contextual advertising is a type of targeted advertising that involves online placement of ads in such a manner that these ads are related to the content of the website on which they are placed. In other words, such advertising is based on the relevance of website content with that of the ads featured by that website. Now how exactly does contextual advertising work, and what are its benefits? Let’s find out!
How Does it Work?
The underlying element of all contextual advertising is the keywords; keywords that appear on a particular website are first scanned by the system, after which the viewer is shown ads that contain or are related to those specific keywords. For example, if a certain user is browsing a website related to mobile phones, s/he might come across ads for mobile companies on the same website. These are usually in the form of banner ads or pop-up ads on the website. On the other hand, they could also be in the form of advertisements on search engine results page, based on the keywords typed in by the user.
The pricing of a contextual ad may either be done on the basis of pay-per-click (PPC) or cost-per-impression (CPM). In the former, the advertiser is charged for each click a certain ad gets, while in case of latter, the advertiser has to pay a fixed rate after every thousand impressions an ad gets. Both the methods are popular and in use, depending upon each advertiser’s requirements and nature of keywords etc.
Benefits of Contextual Advertising
When used the right way, contextual advertising can prove to be quite beneficial for advertisers. For one thing, the ads are much more likely to be noticed by viewers, with a greater probability of them taking some kind of action after viewing the ad. This is because of the fact that contextual advertising is targeted in nature, which means that viewers would only come across ads that are related to what they are already searching. This way, they might be able to find better options through advertisements if such ads appear on the websites that the users are browsing. Thus, the contextual ads are perceived as much more meaningful and relevant as opposed to random ads appearing on the websites or on search engine results page.
Because such ads are meaningful to consumers, they often carry a higher conversion rate as compared to traditional forms of advertising. Basically, users who are browsing through a certain website are essentially trying to find specific solutions or seeking to purchase those products; thus, if they come across an ad related to what they are already looking for, they are much more likely to click on that ad and even buy product or avail the advertised service.
Lastly, contextual advertising is cheaper than other modes of Internet advertising because of the lower but specific clicks such ads receive. Therefore, contextual ads are not likely to add to an advertiser’s cost because such ads will not receive unnecessary and irrelevant clicks from users.