How contextual advertising is making a comeback in cookie-less times

Industry observers say digital marketers are finding alternatives to the cookie-based solutions, involving first-party data & contextual targeting

e4m by Kanchan Srivastava
Published: Apr 26, 2022 8:56 AM  | 3 min read

The deprecation of third-party cookies by major web browsers has marked a major turning point for advertisers. Brands are now increasingly concerned about the digital environment in which their brands are projected. This has led to digital marketers finding alternatives to the cookie-based identity-driven solutions and going back to the first-party data and contextual targeting approach that was looked down since the emergence of behavioral targeting.

Sharing more on this is Rahul Vengalil, Managing Partner of Isobar, a dentsu group company. “The growing concerns over identity-driven behavioural advertising has brought the focus back on first-party data and contextual targeting that will play an integral role in the future of ad tech.”

“Behavioural advertising targets ads on the basis of user data such as websites visited, products viewed and purchase history. It makes use of third-party cookies to reach consumers, irrespective of contextual relevance. On the other hand, contextual advertising involves showing ads that are contextually relevant to the content a user is consuming.”

“Instead of using users’ personal data, the programmatic system displays relevant ads based on the content of the webpage that users visit. If you are reading online news related to cars, you will be shown the ads of cars, if you are watching videos related to mixer-grinder, AI tools will show you kitchen items,” points out Vengalil.

Agreeing to this was Ambika Sharma, Founder & MD, Pulp Strategy. “Contextual advertising model is the way out when privacy concerns limit the mechanics of some digital advertising tools.”

The new digital landscape includes a range of identities that go beyond first-party data. It allows you to pseudonymise branding strategies in various ways to increase versatility and use it for consumer targeting while keeping the context in mind.

However, Sharma notes that in the changed scenario ad tech agencies will have to focus more on creatives now to win the game.

Ad tech companies are already witnessing a spike in demand for AI tools that enhance contextual targeting.

Sharing interesting perspectives on this, Mukul Kumar, Co-Founder and President (Engineering) at PubMatic, said, “Marketers are increasingly looking for solutions that enhance first-party data and contextual targeting, especially for Connected TV (CTV) and Over-The-Top (OTT) platforms that have witnessed tremendous growth in the last two years.”

Kumar says PubMatic will continue to forge partnerships with buyers to take contextual advertising to the entire scale of the ad industry.

Better ROI

If brand marketers can continue to leverage contextual advertising to meet their customers in the right place at the right time, they will be able to successfully move past their dependence on third-party cookies to deliver meaningful messages at scale, say industry observers.

The icing on the cake is that contextual targeting has been a more effective method of targeting than third-party cookies, studies have shown.

IPG Media Lab conducted a study in 2016 among 8,600 consumers, examining the impact of showing the same video ad across a variety of content on YouTube. The study found contextual targeting increased purchase intent by 63% as compared to instances of audience or channel-level targeting. It also showed that consumers were 83% more likely to recommend the product. Overall brand favorability was 40% higher for consumers targeted at the contextual level. Consumers were even ready to pay more for a brand.

GumGum, an US-based artificial intelligence company also came up with a study in 2020 titled “Cognitextual: A Neuroanalytic Study of Contextual Ad Effectiveness”. It revealed ads with the most contextual relevance elicited 43% more neural engagement and 2.2 times better ad recall. The study also found that contextually relevant ads inspired a significant increase in purchase intent.

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