Contextual Advertising: What to Know Before You Start

Contextual advertising is text or graphic ads that are located on the pages of search engines or partner sites.

Sites and Types

Places to post contextual ads are Google and their partner sites. The principles of contextual advertising and the visual appearance of the ads in both search engines are similar. The main objective is to create the maximum motivation for the user to click on ads on the landing page.

Contextual advertising can be of four types:

• Search.
• Thematic.
• Median contextual advertising.
• Contextual targeting advertising.

Search advertising is displayed on the search query page and on the affiliate network site. When installing it, the advertiser enters key phrases or words that the user can potentially use in the settings.

Organic entries appear after the ads in the list of results. Outwardly they can be distinguished only by the absence of the marking of ads.

Thematic ads are ads that are shown depending on the user’s behavior or the theme of the partner site.

Search engine advertising networks include thousands of partner sites. Advertisements on these sites are shown based on the interests of each specific user. For example, if we see ads for candle making materials, shortly before visiting the site we were interested in these products or candle making and visited the corresponding pages on the Internet.

Media-contextual advertising is advertising, which combines the results in one ad for a search query or on the thematic site and advertising banner. The banner can be in the form of graphics or animation.

The combination of formats allows you to successfully find the target audience (as advertising is often broadcast on the search page) and quickly deliver information about a product through a bright attractive image. This method will work if your goal is to increase brand awareness. 

Contextual targeting advertising is similar to thematic advertising, but it allows you to highlight a segment of your target audience in more detail. More specifically, customize not only topics and interests, but also other parameters, such as geo-position, age, etc. Narrowing the audience potentially allows you to get more leads, as the advertiser broadcasts the ad to the most interested users. According to the specified parameters of the audience the system selects suitable pages for your ads.

Contextual Ad Formats

Contextual advertising comes in several formats. You can choose the one which is most suitable for your product and audience and solve the problem of advertising campaigns.

Text or Graphic Blocks

Typically, these ads appear when you search for a specific product or service and contain a note about the ad, brand name and a call to action. Sometimes the block contains contacts or additional links to sections of the site. For example, if it’s a gambling Ad, there can be a https://tonybet.com/en/live-casino link. In the description, advertisers often place information about favorable conditions for the client, discounts, and interesting offers.

Banners

Contextual advertising can be presented in the form of graphic banners with an image and brief product information. These ads are clickable and may take you to a more detailed advertising campaign or landing page.

Smart Banners

These ads are generated automatically based on a person’s queries. They are usually presented in a carousel or selection format with interactive product cards.

Video Ads

These ads appear in the format of short videos with a button to go to the site. They are shown depending on the thematic queries of the user.

On YouTube, video ads are broadcast at the launch of the usual clip and lasts about 10 seconds. During this time, the advertiser must give the viewer maximum useful and attractive information about the product. Action button is usually located on the video layout itself or as a static banner after the ad time.

What the Targeting Options for Contextual Advertising

Like targeting advertising, contextual advertising is configured according to certain parameters:

• Key queries. These are the main words or phrases that the audience uses when searching for products, companies, events, services.
• Interests of the audience. Advertising can be configured according to user interests. This can be seen in the example of advertising with candlestick materials. Have we entered a similar search query at this point? No. We just went to the ad network’s partner site, which is not related to candles. But if this ad is being broadcast to us, it means that we were interested in this area before.
• Geographic targeting. You can select this criterion to show ads in the desired region or country. There is also hyperlocal targeting: if you want to limit the display of ads within a few kilometers, one point, a metro station. Let’s say you want ads for your coffee shop to appear only to users who are nearby and can immediately go in and buy a drink. Why not?  
• Socio-demographic indicator. In this point, you can narrow your audience by gender and age so that ads are broadcast to a specific segment. For example, only girls 18-25 years old.
• Retargeting. This is a show of ads to the audience who have already visited your site. Roughly speaking, you remind the user about your product.
• Time interval. Contextual ads can be set to show at a set time, if that’s important to you. This works well if your audience has obvious online activity peaks.

Pros and Cons of Contextual Advertising

The advantage of context is that with the right settings, campaigns bring high results with a minimum of your intervention. Advertising is as automated as possible, and the first results can be obtained on the day of launch.

Another advantage is the high quality of the audience that clicks on the link.  This is warm traffic, that is, users who are already interested in the product or service.

But contextual advertising has a disadvantage. If the parameters are not clear enough, the ad will not work – it will be on sites or search pages that are not directly relevant to your audience. Such advertising will be a drain on the budget and will not give high figures.  

How much Contextual Ads Cost

In contextual advertising, the CPC system works. You do not pay for displays, but for clicks, the user’s direct ad clicks on the landing page. This approach to payment can be identified as a separate advantage of contextual advertising.

The rate is determined by the auction. The frequency of display depends on your budget. Most of all broadcast ads of advertisers with a large budget.

Depending on the rate and the quality of the advertising campaign is determined by the price per click.

Another item that determines the cost of advertising is the scope. The more advertisers want to place an ad on a selected topic, the higher the price will be. The most expensive niches are real estate, finance, and cars.

Performance Measurement

The choice of metrics for campaign analysis depends on your business goal and expected results. You can use the formulas for financial evaluation:

• Advertising Costs/Advertising Profit * 100%. This is how the share of advertising costs is calculated. The main metric is profit from advertising. This metric focuses specifically on financial income, not campaign statistics in clicks or other actions.
• ROI = (Income – Investments in advertising) / Investments in advertising * 100%. ROI is a measure of the return on advertising costs. As you can see, only financial data is used here, too.  

Here are some metrics, which can be used to evaluate some performance criteria:

• CPA is the cost of a targeted action. You choose the action yourself and use ads to lead the user to it. For example, it is a click on a link, a request for a callback, etc. It is calculated by formula: costs / number of targeted actions.
• CR is the site conversion rate: the number of leads/total traffic for the time period.
• CTR means ad clickability: ad clicks/reach. According to this indicator, you can understand how interested users are in your ads. For example, if the CTR is high and there are almost no leads, it is most probably not about the ad, but about the landing page or product.

Useful Tips

Before you start running ads, set a clear goal. Do you just want website conversions or a specific number of orders? Purchases and orders in general or interest in a particular product? Your objective will determine the format of the ad, its content and the success of the campaign.

Analyze the ads of other advertisers and competitors. What do they emphasize? What techniques do they use to attract an audience? How do they cut virtual steps and where do they take the user? This analysis will help you understand how best to design your ad.

When setting up your ads, use services that will show you possible keywords in your field. These options can be simply entered in the parameters and do not rack your brains. In some services you can even see the keywords in a particular region.

Work on your ad text if you use an appropriate format. Sometimes advertisers just use company information in the description. This is not a good move. Insert your offer, which will immediately let the client know that these services will be more profitable for him than others.