Contextual advertising places in real time an ad on a page based on the specific content of that individual page. For example a publisher may have a sports channel and has traditionally sold this placement option with the same ad displayed on all pages in the sports channel. With contextual advertising an ad for tennis shoes would appear on pages about tennis events while an ad for golf clubs would appear on a page about golf events. With a news site this becomes even more powerful due the wide range of ever changing stories and topics covered by each page of the site.
Contexual advertising technologies have been around for a number of years but Googles AdSense program has made a real impact and is set to really shack up the online advertising industry now that AdSense can support image banners in addition to the traditional Google AdWords (text ads).
The Google AdSense program also places ads not only based on context but also on popularity of the ad (click through rate). This means that publishers maximize the return from there inventory by eliminating ads that perform badly and only presenting ads that are relevant to the content and popular with visitors. Advertisers are charged on a cost per click basis.
Overture also offers a contextual advertising technology called “Content Match”
Industry Stats
Contextual advertising is expected to grow rapidly as more publishers and advertisers adopt this performance based advertising option over traditional banners.
Advantages
- Performance based advertising
- Text and image ads supported
- Placement is automated and more relevant to users than channel or site wide placement
- Ads are placed on a wide range of sites not just search engines
- Very cost effective for international banner and text ad campaigns
Disadvantages
- Ads are only displayed if relevant and popular limiting branding opportunities
- Early days and current inventory in NZ is limited
When to Use
- Cost per click is low and conversions are high so should always be used.