Contextual advertising
Updated: 2021-11-02

Most consumers dislike advertising because of its intrusiveness. However, contextual advertising is not intrusive, it has fundamentally changed the presentation of advertising, given it a completely different impact and made advertising voluntarily searchable. In Western European countries, contextual advertising formats have the highest budgets among both digital and traditional formats.  Contextual formats win in terms of efficiency, availability of planning and post-campaign data, and versatility of advertising impact.  Contextual formats can help to build an image and grow sales at the same time. This is something almost no other advertising format can do.


Contextual advertising formats

Contextual advertising emerged at the beginning of the 21st century with search engines and specialised portals. It is a completely new approach to advertising planning. For almost a hundred years, advertising has been planned according to the consumer's ability to buy based on their socio-demographic characteristics. This approach has led to an increase in advertising effectiveness of 30-40%.

Contextual advertising is aimed at targeted buyers. The user of a search engine or specialised portal betrays his or her needs by reading certain content or entering key phrases into a search engine. In this way, the buyer himself asks to be advertised to. Contextually, that is, advertisements for similar or precisely searched content are placed alongside or integrated into the content. This results in hundreds of times more awareness, effectiveness and engagement with the advertisement. The cost of reaching the buyer is also reduced, as advertising expenditure is limited to the interested, intending buyer.

Many advertising formats have been developed based on the contextual approach, here are some of the main ones:

Contextual advertising

  1. Native advertising is the integration of advertising, usually for products, into content on the same topic, usually articles or films. This format is slightly different when working with publishers and social media influencers. Publishers are the transfer of a classic media business to the digital space. They are more trusted for more expensive items. Specialised publishers tend to exploit Google search traffic. The added value of such advertising is that much of the content has long-term value. This format is good for image building, reinforcement and works well as a sales tool. Publishers can predict results with high accuracy and provide detailed analyses of the results of organised campaigns. Their traffic data is much more detailed than that of other market participants.

Dedicated influencers are the offspring of the publishing business. They usually start out on social networks. Most of them not only lack planning skills, but also campaign performance data. For example, many social networks are still unable to provide data on engagement, i.e. time spent on content. Advertisers usually pay for the release of specific content, the writing of an article, the production and distribution of a film. The price in Lithuania ranges from a few tens to €1 500. The average cost of an article with integrated advertising is €500. Converted into a cost per click, one visitor to the content costs around €0.1. The price decreases depending on the length of the contract. For example, for long-standing clients of the IKS Portal Group, the price per visitor/buyer is between €0.03 and €0.04.

Specialised publishers can also use content data to create a contextual retargeting campaign. Often, the customer comes to the portal of specialised publishers when he/she is just starting to choose the product he/she wants. This is very influential for image building but can be lost before the moment of purchase. Therefore, retargeting - a constant reminder of the product - helps to accompany the buyer right up to the point of purchase. It is not a very common format, and in the IKS Portal Group it costs money to set up and maintain the campaign. Purchasing banners at auction adds approximately 40% commission.

  1. Google ads are advertisements that are contextually selected to appear alongside natural search results. The link in the ad usually leads to a commercial website and has a significant impact on driving sales. It is the fastest way to appear in Google search and one of the cheapest formats for reaching buyers. Pay-per-click, the cost of which depends on broadcast location, competition, budget. The average cost per click for Google Ads in 2020 was around €0.15-€0.2. This is significantly less than on the English internet.

  2. SEO or working with your own website or e-shop. This format is partly suitable for image building. However, the effect is much less than working with a publisher, as an external recommendation from a publisher is more effective than self-promotion. The greatest effect is on sales of goods.


The most common errors in this format are when:

3.1 Durable goods sellers try to make their website a traffic accumulator and emphasise image building on their website. In contrast, the buyer of such products will purchase the product every ten years or more and will not remember the website when buying again. It is much more effective to build an image on publishers' portals and not to measure the results in terms of the number of visitors that come from the publisher.

3.2 With a small budget and the help of SEO students, try to come up with the most important keyword phrases in Google search. The most important keyword phrases are fought for by professionals working on highly optimised platforms. Standing out for a small company or vendor is like winning a million in the lottery. It is much more effective to " stick" to those who have emerged with the most important key phrases: image key phrases for publishers, buying key phrases for trading platforms.

4. Google Adsence (GDN - Google Display Network) is a network of banner ads. It is the most modern banner broadcasting network in Lithuania, but with very high errors, as it is not yet able to differentiate between the main content and the banners of other content. Therefore, it is possible to see an advertisement for insulation foam next to an article about shoes in a completely non-contextual way.

5.One of the fastest growing formats is advertising on sales platforms., advertising revenues already account for almost a third of Google's revenues. The platforms are mostly used for advertising by in-house stores, which are better positioned to sell out, and where more customers come. It is a highly effective format for increasing sales.

6.Youtube videos are becoming one of the most effective formats for contextual advertising. Youtube itself has a high quality search engine that allows you to quickly find the film you want. Youtube films are also often ranked first in google searches.


Image building and contextual selling

Even from self-proclaimed digital advertising gurus, you hear that image building and sales are incompatible. This is archaic thinking without taking into account the new formats and the complex possibilities offered by the internet.

The greatest compatibility between image and sales in native advertising. Advertising integrated into content is often not perceived by the buyer as advertising. Especially if it has been prepared by a professional. Most content, articles, films must be illustrated. Professional content illustrations, the use of specific material, are the most effective form of recommendation advertising. It is very similar to word of mouth, although it is more often used to transmit herpes.  At the same time, the product can be accompanied by an active link to the shop. The product can be immediately illustrated with promotions and discounts. Good and recommended with a good price, image and sales.

It is often forgotten that a visitor leaves a footprint on the internet. One of the most important components of a purchase in modern marketing is data about the consumer. Contextual advertising provides highly accurate data about the customer. Not only what the visitor is looking for, but also at what stage of the purchase process. The data can then go to banner broadcasting networks where an algorithm decides which adverts are better to show.

However, contextual retargeting remains the most effective for now. This is the process of identifying a person's need, adding it to a database, and connecting it to a banner network. The buyer is then chased for a set amount of time and pages to wherever this network is integrated. The most commonly used network for retargeting in Lithuania is the Google Adsense network, which is used by almost all Lithuanian and foreign publishers.


Formation of the target group

In contextual advertising, the target group is defined in a very concise way: customers. The main criterion for grouping buyers is the key phrases they use. Knowledge of key phrases becomes the most valuable for planning a contextual advertising campaign. Several tools can be used to obtain key phrase data. Google Ads shows the number of keyword phrases each month. This data is used by several other popular tools, such as Ahrefs. The accuracy of the data is quite high, with a slightly higher margin of error with less popular keyword phrases. It is also possible to suspect that some key phrases are grouped into several different key phrases.  However, for many, it is an indispensable tool for evaluating key phrases and planning a key phrase strategy.

The Google Analytics Search Console tool shows a much more accurate picture. It shows the key phrases with which a website was found in a Google search. It is a tool that can be used to quickly check the results of an advertising campaign. The Search Console shows the number of keyword phrases used each day, the position of the website and the percentage of clicks.

Keyphrase analysis toolsGoogle Analytics Search Console can show you how people behave online. In many cases, this is invaluable data. You can find out the size of the market. We can find out how to market a product, because key phrases show what customers expect from a product. Long-term tracking of results can show whether brand usage is evolving.


Contextual advertising

Customers naturally pay more attention to advertising that is relevant to their needs. Therefore, the visualisation of the advertisement is not very important. It is even observed that simple, everyday visualisation has a greater impact than artistic presentation. This leads to suspicions of unnaturalness and commerciality.

Quality content is much more important. It must be useful, better than the competition. The time spent on content is of great importance. It is the best reflection of the quality of the content.

Although, as the volume of contextual advertising grows, we can expect increasing competition for attention.

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