Contextual advertising: Delivering relevant ads without third-party cookies

While audience-based targeting has ruled the scene for years, contextual advertising is making a comeback. Predating online advertising, this approach is now more relevant than ever.

Data from Adlook, presented in the 2024 Digital Marketing World Forum, shows just how inaccurate cookie-based targeting can be. For example, the targeting precision for women aged 18-24 was less than 20%, and it wasn’t much better for other cases—66% of people targeted as parents didn’t actually have kids.

Contextual advertising offers a smart solution, allowing marketers to deliver targeted ads and personalized content without relying on cookies or compromising user privacy.

In this article, we’ll cover everything you need to know about contextual advertising: 

• What is contextual advertising, and how does it work?
• The benefits of contextual advertising 
• 3 steps to build a contextual advertising strategy 
• How to measure the success of contextual advertising  

What is contextual advertising, and how does it work?

At its core, contextual advertising is super simple: it involves placing ads on web pages where the content aligns with your product. It’s a cookieless tracking solution that targets ads based on the content of the page itself. 

Picture an ad for winter tires appearing in an article about safe winter driving—that’s contextual advertising in action. Makes sense, right? 

Check out our podcast episode on how contextual advertising works and why you should try it. 

When you dive into the nitty gritty of how contextual advertising works, things get more technical. The process has evolved from simple keyword targeting to using artificial intelligence (AI) and natural language processing (NLP). These technologies analyze web content to understand themes, topics, and sentiment, ensuring that ads are well-matched to the context. Additionally, you can also use first-party data and zero-party data to inform your contextual advertising strategy since they both provide information about your customers.

While each company may use different approaches, trusted publishers like the BBC ensure ad placements within specific contexts on their sites, offering an added layer of credibility and targeting assurance in this new advertising landscape.

Contextual advertising vs. native advertising vs. behavioral advertising

Native advertising is paid content that blends into the media where it appears. For instance, a car company might place a native ad as an article on a website, making it look like that site’s regular content. Native advertising is one format that could be one part of your larger contextual advertising strategy. While native ads focus on how the content is presented to fit in naturally, contextual advertising focuses on where the ads are placed to match the surrounding content. 

Behavioral advertising targets individuals based on their past activities, like what they’ve searched, clicked on, or purchased. This approach can sometimes result in irrelevant ads, like a car ad showing up while someone is reading news or a health article. Contextual advertising flips the script by focusing on the content a user is currently engaging with rather than their past behaviors. So that car company would place their ad in articles about cars, for example. 

These methods aren’t mutually exclusive: contextual advertising works best when it’s part of a broader, multi-channel strategy. It can also span multiple platforms, like programmatic buying via demand-side platforms (DSPs), search campaigns, and social media (depending on how targeting interests are set up). By combining contextual ads with other targeting methods, you can strike the right balance between compliance and performance.

Who is contextual advertising for? 

Contextual advertising works especially well in industries like B2B, healthcare, finance, and travel, where a lot of content is naturally created around these topics. 

Products that require research, like cars, insurance, or tech gadgets, fall into what’s called the “messy middle” of the buying process. Here, people compare options, read reviews, and gather advice. This creates plenty of opportunities to place ads within relevant content like blog posts, reviews, or how-to guides.

Contextual advertising also works great for niche products. Take cholesterol-lowering medication, for example. When someone searches “how to lower my cholesterol,” that’s a clear signal they’re looking for solutions. Placing an ad for a cholesterol-lowering product on the search engine results page (SERP) or in an article about managing cholesterol makes perfect sense—it’s the right message in the right place.  

The benefits of contextual advertising

Here’s a quick look at the key benefits of contextual advertising. 

Relevancy 

Contextual advertising is all about real-time relevance. It focuses on what someone is doing right now, not what they’ve done in the past. For example, if you’re watching a YouTube video about Supermetrics, you’ll likely see ads for our reporting and analytics tools. 

Contextual advertising doesn’t just improve ad targeting—it can also inspire your organic content. By analyzing what your audience is currently engaging with, you can create content that resonates with their interests and strengthens your brand’s presence.

Privacy compliant

Because contextual ads don’t rely on personal data, you don’t have to worry about breaching increasingly strict privacy laws. There’s no tracking of browsing history or personal information. 

This is one reason why spending on contextual targeting is expected to keep growing worldwide in the coming years. 

Improved brand safety

Contextual ads help ensure your brand only appears next to content that aligns with your values. For instance, ads for hair products will show up on beauty or hair-focused sites, avoiding pages with questionable content, like those spreading misinformation or political extremism. This approach keeps your brand safe and aligned with the right context. 

When working with an agency or a digital team for programmatic buying, make sure they verify brand safety and help you effectively target the right audience. 

Better ad experience 

Buyers are more receptive to ads that match their current interests, which can improve ad recall. A study by GumGum found that contextual ads are 2.2 times more memorable than contextually irrelevant ads, and generate 43% more neural engagement.

So if someone’s watching a hair tutorial on YouTube, they’re more likely to notice and remember ads for hair products because the ad is directly connected to the video. 

Cost-effectiveness 

Contextual ads are a cost-effective option because they tap into what people are currently interested in, driving higher engagement and click-through rates (CTR). According to a VDO.AI study, contextual campaigns boost CTRs by an impressive 64%.

For smaller brands, this precision is a game changer. If you’re selling a niche product (like cholesterol medication), you can target specific Google searches related to it, ensuring your ad reaches exactly the right audience at the right time.

3 steps to build a contextual advertising strategy 

Ready to build your first contextual advertising campaign? Keep in mind you might already be doing contextual targeting without realizing it (think Google search ads, for example).

That being said, follow these steps when building your contextual advertising strategy. 

1. Understand your category entry points

First off, identify the reasons, motivations, triggers, and situations that prompt someone to consider buying a product in your category. These are called category entry points (CEPs)—the moments when your product becomes relevant or purchased.

For example, if you sell bicycles, what are the moments when someone is likely to need one? Are they buying because they need a bike for work, leisure, or travel? The same goes for products like furniture—think about when someone might be in the market for a new sofa: moving house, getting divorced, or starting a family. Pinpointing these entry points helps your brand stay top of mind at the right moments. 

2. Analyze your audience’s content consumption 

Next, understand where your audience spends their time online. What specific kind of content do they engage with? Video tutorials? Articles? Forums?

Once you know their interests, you can place ads alongside content they’re already interacting with and that naturally align with your brand. For example, if your target audience is interested in cycling, they might be searching for commuting tips, scenic cycling routes near them, or travel guides for bike-friendly destinations. By aligning your bicycle ads with this type of content, you ensure your brand shows up when it matters.

3. Refine and test your topic selection 

Now it’s time to refine your topic selection to find the optimal focus areas. Use keyword analyzers and semantic analysis tools to uncover related terms and expand your search. You want to find that sweet spot where your audience’s interests meet your product.

A combination of signals provides the most accurate and effective targeting. Keywords identify relevant topics, page themes offer broader context, and sentiment analysis gauges the user’s emotional state. For example, targeting positive sentiment in articles about healthy eating could be highly effective for a healthy food brand. Using all three elements helps refine your targeting and ensures the ad reaches a receptive audience.

With so many platforms, ad formats, and targeting options available, testing is key to figuring out what works best for your audience and brand. Plus, factors like seasonality and trends can impact performance. 

Start by casting a wide net: test multiple options, refine your strategy based on the results, and repeat. If you narrow your focus too early, you risk limiting your reach and potentially excluding valuable audience segments.

How to measure the success of contextual advertising  

Measure success by aligning your metrics with your contextual advertising campaign objectives. Common metrics include: 

• Website visits: Track how well your ads drive traffic to your site.
• Conversions: Measure the number of desired actions taken after clicking on a contextual ad, like purchases or sign-ups. 
• Brand lift: Assess the impact of contextual ads on brand awareness and perception.
• Engagement: Monitor click-through rates (CTR), time spent on site, and other engagement indicators to gauge your campaign’s effectiveness. 

Make sure your tracking is set up to capture data specific to your contextual strategies. Using a tool like Looker Studio or Power BI  to visualize performance makes it easier to refine campaigns and test what works.  

Also, be cautious about how data is collected. Pay attention to how contextual advertising companies categorize websites or articles, as this can affect the relevance of your targeting. As a buyer, it’s important to ensure the data being used aligns with your campaign goals so the targeting is relevant. 

Context is everything 

Marketing has always been about delivering the right message to the right audience at the right time. Contextual advertising helps you do just that by ensuring your message shows up in the right place. 

Contextual targeting isn’t a passing trend. It’s a smart way to deliver highly relevant ads without the need for user-based data. The more you understand your audience and their online behavior, the better you can serve them with ads that feel natural and relevant. At the end of the day, this is how you drive better performance and ROI.