Why Contextual Targeting Is The Most Inclusive Ad Targeting Tactic

Michael Schwalb JW Player

"The Sell Sider" is a column written by the sell side of the digital media community.

Today's column is written by Michael Schwalb, GM of Data and Advertising at JW Player.

For the most part, the internet has made advertising more inclusive. Social media brought attention to stereotypes and discrimination in advertising, and in response, brands took a stand and made diversity, equity and inclusion a priority in their ad creative and messaging.

But the industry still relies on one discriminatory tactic: the third-party cookie.

This tactic is based on the outdated idea that you can make assumptions about people based on their age, race, gender, location, income or any other external characteristic. Judging a book by its cover, as they say, may be frowned upon everywhere else in our society, but it’s still standard practice in advertising. 

The death of the third-party cookie will be an important step forward for inclusivity, as advertisers wean themselves from their reliance on the assumptions.

It begs an important question, though: How will advertisers target their ads without cookies? Well, one option is to go back to what advertisers used before cookies – contextual targeting.  

Not Your Parents’ Contextual Targeting

Contextual targeting dates back to the pre-internet days of advertising on TV, print and radio. Without cookies, advertisers couldn’t track who was watching their ads. So they placed ads based on the surrounding media’s relevance to their offering.

But back then, contextual targeting was just as reliant on assumptions as cookies are today – if not more so. There simply wasn’t enough media for advertisers to find content that aligned perfectly with their offering. 

So advertisers had to make generalizations about their audiences much like they do today with cookies: Sports watchers were most likely men, business news audiences were most likely high earners, cooking show audiences were most likely housewives and so on. 

Obviously, not everybody who watches sports is a man, not everybody who reads The Wall Street Journal is wealthy and not everyone who watches Julia Child is a woman. But advertisers were forced to layer these assumptions with even more assumptions about what these different demographic groups would be interested in buying. Of course, not all wealthy people are in the market for a Mercedes or any other luxury item. The same goes for any other demographic group. 

Fortunately, contextual targeting has come a long way since the pre-internet days. For one, there are infinitely more types of content on which advertisers can place ads. Hundreds of hours of new videos are uploaded every minute. So no matter how niche your product is, there will surely be thousands of videos that are directly related to it. The challenge is in finding them.

In the past, brands using contextual targeting could only place ads on broad categories of videos, diluting their ad inventory with videos unrelated to their offering. But recent advances in AI and natural language processing made it possible to categorize the content of any video with laser precision. 

To put that in context, imagine a brand selling American cheese. A few years ago, they would only be able to target videos in the “Food/Drink” category. Their ads would be shown on plenty of videos for fine dining, vegan recipes and mixology, wasting ad spend on audiences who probably aren’t in the mood for good old Velveeta. But today, the same brand could target videos with much more specific keywords – for example, “grilled cheese” or “best dip recipes” – and place ads on these videos at scale across the web. 

Another added benefit of the advances in contextual targeting is that advertisers can target ads based on the content of the videos themselves, rather than the URL hosting them, which opens up even more inventory. So, for example, if Sweet Baby Ray’s wanted to advertise on videos of barbecuing, they could place ads on an Insider video with barbecue tips for beginners, which would otherwise be categorized as “News” content based on the URL alone.

The difference is that advertisers no longer need to assume who may be interested in their offering. They can know exactly who is interested, regardless of their demographics. It doesn’t matter if the audience is rich, poor, male or female – what matters is that they are watching a video about grilled cheese, barbecue or whatever else a brand is advertising.

Making the Switch to Inclusive Advertising

After 25 years of reliance on third-party cookies, it’s only natural that advertisers would be hesitant to give them up. Even if they try contextual, many will still use cookies as a safety net. 

But brands only hurt themselves by clinging to the cookie. By limiting their ad targeting to audiences they assume are interested based on their age, gender, race, nationality or any other demographic detail, advertisers miss out on reaching potential buyers whose interests don’t line up with expectations. In other words, it pays not to assume what people want.

With contextual targeting, you already know that audiences are at least somewhat interested in your product. Videos are now an important part of the buyer journey and often go-to sources for research on upcoming purchases. At the very least, people watch videos that reflect their interests and hobbies. Unlike with cookies, you don’t need to invasively track your audience's interests over time; you can show ads related to what people are watching in the moment.

Ultimately, contextual targeting is a win-win for advertisers and audiences alike. Audiences get ads that are more relevant to what’s currently on their mind without sacrificing their privacy. They also don’t get served ads that make assumptions about them based on their demographics. Meanwhile, advertisers can reach more engaged audiences without limiting their reach by discriminating along demographic lines.

Follow JW Player (@JWPlayer) and AdExchanger (@adexchanger) on Twitter.

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2 Comments

  1. I respectfully disagree with some elements of this article, particularly the generalization that business owners and marketers are just blindly guessing.

    Kinda the irony of the article here...

    As a business owner I know the income ranges of the individuals who can afford my services, zip codes to my local are, and I have spent over half a decade working with a particular niche of clients that I specialize in working with, and there are factual commonalities that help me reach them through ad settings and SEO.

    Additionally contextual marketing would hurt me cause my services are something the client doesn't think about, or often search for but all of my clients see the value in this service for their family.

    There is no silver bullet in marketing or serving our clients and I believe many of us worry that we will be forced into trying to reach our niche with tools that aren't best compatible for our industry.

    Reply
  2. Change is required, Change is good, Change is inevitable.

    Advertising existed prior to the internet and advertising existed before all the nefarious tracking.

    I personally do not have a problem with advertising but I do have a huge problem with all the seedy underbelly of adtech / tracking / spying / user inference (which can be wrong), to even the simple having of the same ad follow me everywhere (which is likely to make me less want to purchase that product !!). And since tracking comes along for the ride with advertising, I end up blocking it all as its gotten completely out of control and the sooner ad tech and advertisers wake up to that fact the better.

    Get with contextual advertising as its the only sane thing to do and Cody don't say contextual advertising will hurt you without indicating what product / service you sell as you are not making a case that contextual advertising is bad without some context !! 🙂

    Reply

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