Contextual vs Behavioural Advertising

In this guide, Passendo compares contextual vs behavioral targeting to help advertisers decide which is right for their next campaign in a post-cookie world.
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The marketing industry is constantly changing, and one of the most pivotal changes is the ongoing transition from behavioral targeting to contextual targeting. These two forms of targeting get easily confused, but they are distinctly different in many fundamental and technical aspects. 

Here is a comprehensive overview of contextual targeting vs. behavioral targeting and how each technique works. 

What is Contextual Targeting? 

Contextual targeting is a form of advertising that bases the ads served on the host platform’s content. The underlying factor here is relevance — the ad must be relevant to the host page’s content and overall theme. 

Publishers match a marketing campaign’s topics and keywords with similar topics and keywords on web pages on host websites. For example, suppose that a user is browsing a web page discussing how to use makeup. Under a contextual advertising strategy, the publisher will place an ad related to makeup, such as cosmetics (and related topics such as fashion), because it is relevant to the page’s theme. 

Advantages of Contextual Targeting 

Contextual targeting offers dozens of benefits. Some of the most notable ones include: 

  • Easy to Regulate 

More and more people are joining the discussion about data protection and privacy regulations. Tech companies and marketers are increasingly coming under criticism for exploiting users’ personal data and preparing for a cookieless future. The use of cookies that track users’ activities has often been highlighted as an example of the invasive use of users’ data. 

Contextual targeting is a form of cookieless advertising that doesn’t track and collect users’ data. This makes it easier to regulate as governments worldwide adopt a stricter approach to data privacy. 

  • Relevant & Efficient 

Users’ interests influence their browsing habits and online activities. For example, someone reading a review about the PS4 gaming console may be currently interested in buying one. Consequently, the user is more likely to click on an advert related to this gaming console. 

Contextual targeting uses ads that are relevant to the page’s theme. These ads increase the number of leads and viewability, and conversion rates as they fit users’ interests. 

  • Measurable  

You can easily track and measure your marketing campaign’s performance when using contextual targeting. For example, you can see how users interact with the campaign and how the keywords work. This is possible using several popular platforms, including Google Ads and Google Analytics. 

  • Easy to Manage 

Contextual targeting gives you complete control over your marketing campaigns. You can set and adjust a range of factors, including texts, titles, keywords, and terms and conditions. Additionally, you can launch ads in minutes and opt-out at will. It is much more flexible compared to behavioral targeting. 

Challenges of Contextual Targeting 

Contextual targeting also poses a range of challenges, including: 

  • A Likelihood of Inaccuracy 

Many ads posted through contextual targeting are relevant to the platform’s overall theme and topic. However, they are not always accurate or precise as per the user’s needs and interests. 

For example, consider a Beyonce fan reading about how the singer recently bought a hundred-million-dollar mansion. Some of the featured ads under contextual targeting would include high-end real estate properties available for sale. The ads may be relevant, but the user may not have the money to buy the property. 

  • Highly Competitive 

The marketing industry has always been competitive. However, contextual targeting amplifies the competition as ad placement is based on bidding. The highest bidder gets the best of everything: high-quality ads, prime placement on high-traffic sites and positions, and more. The level of competition depends on how many competitors you have. 

On that note, the cost of purchasing paid ads can add up over time. However, there are still many affordable solutions. 

  • A Bit Technical When Starting 

Contextual advertising is easy to understand and gives users complete control over their marketing campaigns. For example, you can adjust and customise important aspects such as titles and keywords. 

Many contextual targeting solutions are intuitive. However, they aren’t always easy to use at first, especially if the user lacks the necessary technical skills. As such, it may be necessary to hire a professional to run the ads. 

However, this is a disadvantage only when you want to run the campaign yourself. Besides, hiring a professional saves you time and delivers better outcomes. 

What is Behavioral Targeting? 

Behavioral targeting is a form of advertising that serves ads based on the particular user’s web browsing behavior. This technique uses cookies and other tracking tools to track users’ online activities. The cookies collect and compile data, giving marketers an insight into the user’s interests and preferences. For example, a user who recently bought a bike may get ads marketing bike gear and accessories. 

Behavioral targeting precedes contextual targeting. Additionally, the use of cookies to track users’ online activities has raised concerns about data privacy. Thus, the use of behavioral targeting will be more and more limited over time. 

Advantages of Behavioral Targeting 

Behavioral marketing offers a range of benefits, including: 

  • Good User Engagement 

Behavioral targeting is data-driven. Ads are based on data collected over time, giving marketers a better understanding of the user’s needs. Consequently, ads are customized to suit the individual’s user’s needs and preferences instead of simply making the ad relevant to the platform’s theme and content. 

  • Good Ad CTR & Conversion Rates 

Many people consider generic ad banners a nuisance, and they either ignore or block them. However, they may be genuinely interested in ads that prey on their needs and preferences. Here, there is a higher likelihood that they will click on the ad, offering a high click-through rate. This is possible using behavioral targeting as ads are customised to suit the individual user’s needs. 

Behavioral targeting also offers good conversion rates. Some of the users who click on the ads will continue and do as requested, whether it is making a purchase or subscribing to a platform. Marketing campaigns that use this technique may experience better ROIs and increased revenues as a result. 

  • Good Customer Experience 

Many people consider ads a nuisance, and they either block or ignore them, as explained. Bombarding a user with unwanted ads can also ruin their experience, giving them a negative perception of the brand and the platforms hosting these ads. However, ads generated through behavioral targeting are highly relevant to the customer, and they serve to complement their overall user experience. 

Challenges of Behavioral Targeting 

Behavioral targeting also poses a range of challenges, including: 

  • Data Privacy Concerns 

Behavioral targeting uses cookies to track users’ online behavior, as explained. This has raised data privacy concerns and prompted action from the authorities, tech companies, ordinary internet users, and other concerned parties. For example, Google announced that it is planning on phasing out all third-party cookies off its platform by 2022

The growing concern over data privacy poses limitations and challenges for behavioral targeting. It is restricting the amount of data that marketers can collect and what they can do with it. 

  • Potential Advertising Overload 

Generating ads that are relevant to the user’s needs and preferences is appealing. However, bombarding the user with too many ads leads to an advertising overload. This gives the user a negative perception of the ads and their brands, ultimately driving potential customers away. 

The data used in behavioral marketing enables advertisers to develop as many ads as they wish. It is also excellent for retargeting. However, it is advisable to use this technique sparingly to avoid advertising overload (and save yourself some money). 

  • Can be Expensive 

Behavioral targeting works on a pay-per-click basis, whereby the advertiser pays the publisher every time someone clicks their ads. It is an effective advertising approach, but it can also be expensive when deploying many ads. Consequently, this can limit the number of ads that you can deploy at a given time, depending on your budget and financial bandwidth. 

Contextual vs. Behavioral Targeting 

Contextual and behavioral targeting are distinctly different, as explained: the former is based on a platform’s content while the latter is data-driven. Additionally, these techniques have varying advantages and shortcomings. 

So, which of these two techniques is better, and what approach should marketers and publishers take? Here is a comparison of how these techniques fair based on the following three important factors: 

  • Efficiency 

Efficiency, in this case, is a broad term covering factors such as relevance, lead generation, and conversion rates. Contextual targeting checks all of these boxes. 

Behavioral targeting relies on users’ past data to create ads. However, past behavior is not always a reliable predictor of the user’s present and future needs and interests. 

In contrast, contextual targeting relies on the user’s present activities, and each ad is relevant to the content they are browsing. The user’s present interests are more pressing than their past interests, and this increases their likelihood of viewing and clicking the served ads. 

  • Economic Execution 

Advertisers can also save more money with contextual targeting compared to behavioral targeting. Behavioral targeting requires considerable financial resources to purchase all of the tools needed to track users and collect and analyze their data. It also requires human resources to manage tools, execute data, and do more. It may not be affordable for smaller brands with limited financial resources. 

In contrast, contextual targeting is mostly automated and has fewer financial obligations. Brands can still serve relevant ads without spending a fortune (and time and human resources) tracking users’ online activities. 

  • Privacy Regulations 

Behavioral targeting is coming under increased scrutiny as concerns over data privacy grow. Many people don’t want cookies tracking everything that they do on the internet. Regulatory bodies across the world are setting stricter data privacy laws. Additionally, Google and other search engines are phasing out third-party cookies, as explained. 

Overall, there is a growing limitation on how much data advertisers can collect. Consequently, this limits the quality and quantity of ads that they can create going forward. It also makes advertisers who use behavioral targeting liable to fines and penalties if they breach the set data privacy laws. 

Contextual targeting relies on platform content instead of users’ data. As such, advertisers and marketers don’t need to worry about complying with the dynamic and increasingly stringent data privacy laws. 

Verdict: Which is Better? 

Ideally, advertisers should work with the approach that generates the best results. In this case, it is advisable to combine both behavioral and contextual targeting. 

A combined approach will enable you to make the best of each technique’s advantages while also using their strengths to offset each other’s limitations. However, it is also advisable to focus more on growing your behavioral targeting approach in the preparation of the ongoing decline and potential demise of behavioral targeting

Can Contextual Targeting Replace Third-Party Cookies? 

Third-party cookies are currently operating on borrowed time, and many of them could be useless in less than one year. As a result, many marketers have been looking for alternative solutions. 

There is an ongoing drive to develop alternative trackers that will not infringe on users’ privacy. However, Google recently announced that it would not join the effort to develop more identifiers and trackers, dealing another blow to the fundamental aspect of how behavioral targeting works. Consequently, contextual targeting is poised to replace third-party cookies. 

Some of the challenges and shortcomings of contextual targeting are caused by the lack of data available in a behavioral targeting approach. However, contextual targeting tools are becoming more sophisticated and offering more analytical power. 

Tim Beveridge, a GM strategy expert with Silverbullet, says, “Truly effective contextual targeting engines are able to process all types of content that exist on a page, to give true 360-degree guidance as to the page’s semantic meaning.” Publishers can identify good platforms to post their ads based on more than a simple keyword match. 

Modern and advanced contextual targeting solutions allow publishers and advertisers to tweak a wide range of metrics, from keywords to a platform’s political tone. Some tools are also sophisticated enough to analyse videos per frame and identify important aspects such as products and logos. Additionally, marketers are working on making contextual targeting tools more powerful as they brace for the end of third-party cookies. 

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