Digital advertising takes the top spot in marketers’ toolboxes worldwide since this type of product presentation enables a far wider reach than any form of organic marketing. If perfectly aligned with the needs and wants of the target audience, digital marketing can bring about extremely powerful results. Marketers commonly rely on two types of advertising. The most notable difference between these two types is their method of targeting the audience.
In today’s article, our PPC agency in Chicago helps you enhance your marketing campaign by comparing contextual vs. behavioral targeting. Together, we’ll explore all the nooks and crannies of these types of ad placement to ensure that your brand always shows up in the right place, at the right time, and with the right content.
What is behavioral targeting?
Third-party cookies have been the engine that drives behavioral targeting for the past 20 years. This allowed publishers and advertisers to tailor and display ads to online users based on their internet browsing behavior. While, on the one hand, marketers can improve the effectiveness of their campaigns, on the other hand, this type of advertising requires that users forfeit some of their online privacy.
Behavioral targeting has proved to be valuable for sales motivation and campaign acceleration, but it seems that those benefits are not going to last much longer. Due to these privacy concerns, some web browsers, such as Safari and Firefox, have already blocked third-party cookies, while Chrome has made the first steps in phasing them out. Besides blocking cookies, marketers that use behavioral targeting run into obstacles in the form of different privacy regulations like the General Data Privacy Regulation (GDPR) or the California Consumer Privacy Act (CCPA).
What is contextual targeting?
Contextual targeting is well on its way to becoming the most successful form of B2B (business to business) advertising. Instead of focusing on users’ personal data to deliver ads, it relies entirely on the content the person is consuming. As the internet user views the content, the algorithm matches it against the ad using keywords, topics, language, and location. Since the ads are displayed dynamically, the higher the content relevancy to the user, the higher the chances they will click on the ad.
How does behavioral targeting work?
Continuing our comparison between contextual vs. behavioral targeting, let’s explore how both of these methods function. We’ll start with behavioral targeting.
As the term explains, ads are displayed to users based on their online behavior with behavioral targeting. This can include:
- Browsing history
- Links clicked
- The amount of time spent on a web page
- Overall website engagement
- How recently they’ve searched for something online
As we have already mentioned, this is made possible by means of cookies. Cookies are small files that include unique identifiers. They are inserted into the browser on your hard drive the moment you visit a brand’s website and opt to accept them. Thanks to these files, brands can monitor where you are browsing, what search results you are clicking on, how often you visit their website, which products you are adding to the cart or a wish list, etc. This way, they can show different ads to first-time users, repeat buyers or even display locally relevant ads based on geolocation and IP address parameters.
Internet users with similar patterns are grouped, allowing marketers to retarget groups of users with certain browsing habits. For example, Let’s say you wish to buy a new cell phone. So you start your research online by looking at different models and comparing their prices. Later that day, you log in to your social media to check what your friends are up to and see a bunch of ads for new cell phones. That’s behavioral targeting at its best, and it is not limited to social media. You could be reading news or performing various other online actions.
How does contextual targeting work?
We’ve explained the inner mechanisms of behavioral targeting. Now, let’s move on with our contextual vs. behavioral targeting comparison by exploring how contextual targeting works.
As we have mentioned above, contextual targeting is the practice of displaying ads on website pages based on the content of those pages. This process involves ad segmentation based on parameters such as keywords or website topics.
For example, suppose you were to browse a financial website and see an ad about accounting software. In that case, you are probably targeted contextually since the product is related to the website’s content.
Contextual targeting is done through a demand-side platform (DSP) that shows your ads on those web pages that meet your specific parameters. A demand-side platform is a software that advertisers use to purchase mobile, search, or video ads from a marketplace on which, in turn, publishers list advertising inventory. These platforms allow advertising management across multiple bidding networks instead of just one, like Google Ads.
To go further into details, we’ll demonstrate how contextual targeting works on the Google Display Network.
To start your contextual marketing campaign, you first need to tell the advertising system what your campaign is all about. You do that by setting topics and keywords.
Topics are broad categories upon which you base your campaign. Depending on your product and target audience, this could be anything from music and fashion to vehicles or botany. Once you pick a topic, you may be offered subtopics. As soon as you make these selections, your ads will be eligible to appear on websites across the Google Display Network related to the topic.
Keywords allow more precise targeting within the topics and subtopics you selected. Google suggests that each campaign should contain anywhere from 5 to 50 keywords, including your negative keyword list. So, you may include car models and manufacturers or exclude some of these with negative keywords. This way, you’ll help the Google Display Network match your ad to website content.
Google analyzes the web pages in its network
Once you pick your topic and keywords, Google analyses content in each display network web page to match your ad with the most relevant ones. Some of the elements it takes into account are:
- Page structure
- Link structure
If you include both topics and keywords in the same ad group, Google will favor keywords when deciding where to display your ads. In other words, though there may be some web pages that are related to your topic, if they don’t also match your keywords, they won’t display your ad. That’s the difference between broad and specific reach. When you select broad reach, your ads are eligible to appear on web pages that match your topic. On the other hand, specific reach allows your ads to be displayed on those web pages that match your keywords and at least one of your topics.
Google placed your ad
So, Google used the parameters you had set, analyzed the web pages, and found those that contextually matched your ad. In this part of our contextual vs. behavioral targeting comparison, we’ll dive deeper into the way Google determines where to place your ad both in terms of keywords and topics:
- Keywords: If your keywords match the central theme or select concepts of a website, your ad is eligible to be displayed there. Google calls this process automatic placement. However, this doesn’t mean that the ad will be placed there. Other factors (such as bid, location targeting, language, and so on) also have to align.
For example, you wish to advertise the latest lineup of your car dealership. Your ad group contains keywords like fuel-efficient cars and 2022 electric cars. Contextual targeting will place your ad on web pages that match those keywords.
- Topics: Again, if your topic matches the theme or content of a website, your ads are eligible to be displayed there. Other targeting factors decide whether your ad will show up or not. In this case, your exact keywords are NOT the deciding factor.
To elaborate, let’s get back to our car dealership example. You wish to advertise the sale you have on electric cars. Your ad group subtopics could be Autos & Vehicles > Vehicle Shopping > Vehicle Specs, Reviews & Comparisons. This way, you target all the Display Network’s web pages related to car reviews and comparisons, even if they don’t contain your targeted keywords.
Though we take Google as an example, other display networks place contextually targeted ads in a similar fashion as well.
The benefits of contextual vs. behavioral targeting
Though both of these methods use users’ interests to target display ads, behavioral targeting may seem like contextual targeting taken a step further. After all, targeting people based on their behavior is a higher level of personalization than simply matching your ad with the content. Just because someone is reading about the latest electric car models, it doesn’t mean they are looking to buy one. On the other hand, visiting a dealership’s landing page shows buyer intent.
With that in mind, it does seem like behavioral targeting checks all the boxes necessary for an ad to deliver results. However, there are some upsides of contextual targeting that alternatives don’t have:
- Cost efficiency and ease of implementation: The success of behavioral targeting relies on gathering data. You need tools to collect and analyze data, implementation strategies, and personnel to optimize the entire process. The first-party data are the most valuable, but some businesses neither have enough resources nor customer data to back up this advertising model.
Contextual targeting is a more affordable alternative that provides a significant level of relevance. Though it may not offer the same level of personalization, its reach is usually broader. It will help you direct a notable amount of visitors from other websites to yours.
- Privacy: The General Data Protection act classifies cookies as personal information and determines strict rules for how they can be collected as well as fines for violations. Soon, other countries followed up with their own regulations. It is no more implied that you agree with using cookies as soon as you enter a website. Now you have to opt-in, which makes the data collection process more difficult.
Contextual targeting doesn’t use personal data, so advertisers can rest assured that their ads are being displayed on compliant websites. Due to the effects of GDPR, many marketers sided with contextual targeting and even enjoyed improved ROI.
Also, as we have mentioned at the beginning of this article, Safari and Firefox have already excluded third-party cookies, and Google is also taking steps in that direction.
- Brand safety: Brands take a lot of pride in their reputation and go far and wide to build and maintain it. However, displaying ads based on users’ behavior bears the risk of your brand being advertised on websites with adult or extremist content. On the other hand, content is at the center of contextual targeting. By choosing topics, subtopics, and keywords, you are reducing the chances of your ad being displayed where you don’t want it to be at the minimum.
- Greater relevance: The more personalized the ad is, the more relevant it should be, right? Yes, but not always. Just because the ad is personalized based on your previous behavior, it doesn’t mean that it is still relevant today or at the moment. Simply put, if you are running a business and researching the industry online, once the long day’s work is over, you may want to Google a restaurant for a nice relaxing meal. So, would you want to be bothered with industrial raw material prices going up at that moment? Probably not.
While this doesn’t necessarily mean that contextual ads are more relevant than behavioral, it does provide an interesting perspective. Behavioral retargeting is effective, no doubt. But, what the user is viewing at the moment can be of higher relevance at that point.
- Not intrusive: With so many years of being bombarded with ads wherever we turn our heads, it is no wonder that we subconsciously learned to ignore them. Especially if they are not relevant to our current situation.
According to Infolinks, contextually relevant ads of lesser-known brands are recalled 82% more by people compared to ads of famous brands but irrelevant to page content.
Also, being constantly served ads based on our past behavior can evoke the feeling of being monitored by Big Brother. That can generate discomfort and even deter users from clicking, no matter the relevance. Contextual ads perfectly blend into the surroundings, which increases their trustworthiness.
Check out these stats provided by Adpushup:
- Contextual targeting averaged a 73% increase in performance compared to behavioral targeting.
- 49% of US marketers utilize contextual targeting today.
- 31% of brands plan to increase their spending on contextual advertising.
Contextual vs. Behavioral Targeting: Final thoughts
Both contextual and behavioral targeting have different roles in your digital marketing strategy. With each of these methods having its unique advantages, it can be challenging to settle for one over the other.
Contextual advertising may be a better choice if you plan to launch a campaign that requires fewer resources for implementation since you won’t be collecting personal data. That also means you won’t have to worry about GDPR compliments. Opting for a topic and a keyword makes the entire process pretty straightforward while it also increases your reach, safety, affordability, and ease of implementation.
In contrast, displaying behavioral ads to people that have already visited your website is extremely valuable for retargeting purposes. And that’s the benefit that contextual targeting doesn’t provide.
Ultimately, both methods have a place in the modern digital marketing game. What matters is knowing what goals you wish your ads to accomplish, what feeling you wish to evoke with your customers, how you want your brand to be perceived, and what portion of your advertising budget you are willing to allocate.