The Impact of AI on Contextual Advertising

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Contextual advertising was considered a simple strategy earlier. However, as platforms no longer support third-party cookies and legislation is being used around the world to improve customer privacy, marketers are focusing on context.

Why Is Contextual Advertising Becoming Popular?

Advertisers typically use behavioral targeting to use a potential customer’s browsing and shopping data. However, due to privacy concerns, advertisers needed other options. Now, with AI-driven contextual advertising, they can create relevant ads without relying on cookies.  Moreover, the context of these ads can now identify customer interest and intent.

Contextual intelligence works on data collected through a study of any web page. It assesses whether the advertisement will properly fit based on several standards. As a result, it adds to brands’ understanding of consumer choices, enables automation, and supports data-driven decision-making.

increase by 13.8 % annually between 2022 and 2030.

Global contextual advertising spending report.

Today, as firms face issues with traditional advertising, they increasingly opt for contextual advertising using artificial intelligence (AI). This has appeared as a breakthrough solution offering multiple advantages to firms.

Benefits of Contextual Advertising

Contextual advertising gives advertisers the power to use one of the biggest impact factors—context. Furthermore, AI tools enable contextual advertisements on relevant websites that reach the target audiences. Some of the top reasons that will drive its adoption are:

  • Adherence to Data Privacy

Third-party cookies have been blamed for impacting customer privacy. Cookie-less advertising solutions, such as contextual advertising, do not use users’ personal data to target adverts.

AI can leverage data from first-party sources to build a complete user profile. Demographics, first-party customer data, interests, and behavior are all examples of information that can be used to better target advertisements.

  • Improved targeting 

In addition to text and keywords, AI systems can assess and understand the context of a webpage or app. These algorithms can optimize ad campaigns through contextual ads by modifying targeting based on performance indicators. Click-through and conversion rates decide which ads work best on a given website.

AI-based NLP can even learn a search query’s intent, allowing more precise ad targeting. AI is also helping marketers discover the ideal areas for ad placements, ensuring maximum return on advertising efforts.

  • Enhanced Personalization 

Today’s consumers view most digital adverts as disruptive to their online experience. AI is helping to address this challenge. Not only can it help find the best spot to place the ad, but it also has the ability to blend ads into images or videos more seamlessly into the larger webpage content.

This makes it more attractive and interesting to readers, enabling a higher quality of experience and returns.

  • Increased Brand Safety and Suitability 

AI can also recognize negative articles, fake news, and fraudulent content. It can avoid showing ads in these contexts, and this helps maintain a positive image with audiences. It’s a great way to maintain a brand reputation.

AI is also being used to guarantee that ads are displayed in relevant contexts. It can also identify and stop fraudulent activity, such as bots clicking on ads, making online advertising more secure.

Also read: Benefits of Contextual Advertising for Businesses

The Impact of AI on Contextual Advertising 

Contextual advertising can adjust to the changing digital landscape, increasing adoption rates. Its ability to perform better in standardized segments will lead to its use as a more precise and reliable solution in a privacy-first world. Some of its future

  1. Transformation

Contextual AI advertising is also a creative solution for the digital advertising industry, especially as it adapts to stricter privacy standards. These features will further lead to more practical, responsible, and sustainable advertising practices.

  1.  Data Availability

When brands use contextual advertising, they gain access to a large amount of useful data. Under normal circumstances, this data would need many resources and expensive tools to gather.

It is extremely valuable and useful because it gives brands insights into consumer interests.

If a brand’s target audience is too limited, it can develop the modified category while still keeping it relevant. This will help it tap directly into the desired consumer base.

  1. Cure for Demographic Targeting

Demographic targeting has been degrading advertising. Consumers now connect these ads with the invasive cookie-driven techniques they’ve become familiar with. This leads to a negative view of the brands behind the ads. AI-powered contextual advertising allows firms to change this.

As the firms move toward a cookieless future, this is the only way to make advertising less generic and more relevant. This also ensures a more positive brand reputation in the market.

With privacy laws getting stricter, user tracking and targeting are the future of online marketing.

  1.  ROI

Holding the attention of target consumers through contextual targeting and brand suitability delivers a higher ROI. Moreover, it also creates better engagement and enables efficient media buying management.

Advertising, driven by the right content and context, has also proven superior to audience-based targeting. This can provide engagement and attention.

Conclusion

Contextual advertising benefits the overall marketing strategy by using data solely based on a user’s context. Everything, from content and keywords to images and web copy, is considered for effective advertising and contextual marketing content.

Contextual advertising uses artificial intelligence (AI) to give firms control instead of the user. It does so by allowing firms to focus on the visitor’s present behavior instead of what they have done in the past. For these reasons, contextual advertising is expected to be widely implemented in the coming years.

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Aafreen Shaikh
Aafreen Shaikh
Aafreen Shaikh is a Senior Associate Editor with OnDot Media. She has had professional exposure in the research industry for 6+ years. She is interested in several tech-related topics, such as AI, IoT, and marketing technology, to mention a few. When not absorbed in the latest gripping page-turner, Aafreen loves spending far too much time playing the latest games on the computer. She also loves to stay abreast of industry trends and reads up on as many publications in that domain. Her insights in the IT domain are translated into the crisp and fresh perspective-based content she creates.

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