Contextual advertising is the latest method that marketers and advertisers use to target consumers online and attempt to steal their attention in hopes of converting them to paying customers. It’s a form of online marketing that we all love to hate, but those ads certainly aren’t going anywhere just yet because it is still one of the most effective forms of advertising.
If everyone hates it, how can it be profitable?
The thing that sets contextual advertising apart from traditional forms of advertising is exactly what makes it effective. The truth is that most of the time, the ads don’t get any bites and turn into sales, but the sheer volume of ads that are put in front of the right people means that even a small success rate makes it profitable enough for advertisers to keep doing it.
Search network vs. display network
The search network is the network of text ads that show up in search engine results. PPC advertisers utilize the search network to put relevant content in front of people searching with targeted keywords.
The display network is the network of ads placed on web pages across millions of sites, which are strategically placed according to visitor profiles comprised of each visitor’s search history; these ads are also matched with the content of the site where they are displayed.
The ads you find on a given site is increasingly based on relevance to the visitor, rather than relevance to the site, meaning that, with all things being equal, two people independently visiting the same website will see two different sets of display ads.
Trends in retargeting and display ads
Over the past decade, the number of people who not only get all of their information from the Internet, but who also do most of their shopping online, have grown in massive numbers. This fact is not lost on advertisers, who have collectively invested billions in contextual marketing, in addition to all kinds of online marketing.
Display ads are especially going to become more tenacious, and even more tailored to each visitor. There are two developments that will enable advertisers, marketers, and online content publishers to reach consumers more effectively in the future:
1. Progressing technology continues to augment the ability of advertisers to reach online consumers efficiently and consistently.
2. People are willing to share ever more of their personal, and even sensitive, private information online, namely through social media. They are already unwittingly providing information that is valuable to advertisers, by way of everything they search in Google, as well as sites that share visitors’ information with third parties.
The fight against ad blockers
In the summer of 2015, the Interactive Advertising Bureau actually threatened to sue the ad blocker companies, and IAB’s losing battle is still ongoing, as more consumers use ad blockers every day.
Randall Rothenberg, President and CEO of the IAB called one ad blocker company “an unethical, immoral, mendacious coven of techie wannabes,” and that was just one of many desperate outbursts he fired at ad blockers. Story Worldwide referred to Rothenberg as the “Donald Trump of Digital”, due to his habit of throwing tantrums and thoughtlessly hurling unwarranted insults at his opponent because he didn’t get his way.
So the advertising companies are not happy with the trend towards ad blockers, but the market has started to favor ad blocking companies, no doubt the result of consumers who are sick and tired of the relentless ads that follow them everywhere on the web.
While contextual display advertising is still profitable today, moving forward, the industry will be forced to innovate to reach consumers in new and different ways.
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1. Erin Sagin, “Search vs. Display: Which AdWords Network Should You Use?,” WordStream, November 20, 2016, http://www.wordstream.com/blog/ws/2014/05/20/google-adwords-search-versus-display
2. Adam Grow, “2016: The Year of Display,” Marketing Land, January 22, 2016, http://marketingland.com/2016-year-display-159754
3. Tim Peterson, “IAB Explores Its Options to Fight Ad Blockers, Including Lawsuits,” Advertising Age, September 4, 2015, http://adage.com/article/digital/iab-surveys-options-fight-ad-blockers-including-lawsuits/300228/
4. “Advertising is Losing the Anti-Ad-Blocking Battle. Here’s Why.,” POST advertising, Story Worldwide, July 13, 2016, http://www.postadvertising.com/2016/07/advertising-is-losing-the-anti-ad-blocking-battle-heres-why/