Dmitriy К. Google Ad Expert

Contextual advertising: what it is and how it works

It is much cheaper to attract buyers from among those who are already interested in the product and are looking for it. This is where contextual advertising helps.

Contextual advertising: definition and principle of work

Contextual advertising is a type of advertising on the Internet that is shown in accordance with search queries, the subject of the site, the selected audience or other context.

This is one of the most popular types of advertising, as it allows you to show ads to users who are already interested in products, services, brands:

- drove in the relevant queries in the search;

- visited thematic sites;

- watched videos, etc.

The general principle of work is simple. For example, a person plans to buy a vacuum cleaner. The person directly enters the query “buy a vacuum cleaner” into the search bar, reads the article “How to choose a vacuum cleaner” on some site or watches video reviews. So the advertising system understands the user’s intentions and shows the corresponding ads to the person.

Whether the system will show the user a specific ad of a particular advertiser depends on many factors:

- keywords and other types of targeting in the advertising campaign settings;

- management strategies and specific rates; ad quality;

- CTR forecast generated by the advertising system.

Ad impressions are also affected by the auction and the actions of other advertisers. For example, in one of the contextual advertising systems, an auction works on the first page in the search. Its winner, who is ahead of competitors in terms of rate and other parameters, is shown on the first line of the advertising issue and pays:

65% of traffic at the lowest price - the rate of a competitor who was in last place;

10% - at the rate of the fourth competitor;

10% - at the rate of the third competitor;

15% - at the rate of the second competitor.

Approximately the same principles, sometimes a little more simple, work in other advertising systems.

There is an opinion that the contextual advertising mechanism excludes inappropriate impressions and clicks. In fact, it all depends on how well the campaigns have been set up and optimized: they have selected key phrases and audiences, formed lists of negative keywords, and turned off low-quality sites.

Goals of contextual advertising

The key goal of contextual advertising, like any promotion on the Internet, is to bring customers and profit to the business. For this purpose, the main task is to bring users to the company's website, where they will perform some targeted actions and get into the sales funnel. More detailed and specific tasks depend on the marketing strategies and the complexity of the funnel that the company uses.

Placements of contextual advertising

When talking about contextual advertising, the first association arises with impressions in search engines. However, contextual ads are actually shown on many other placements. Let's consider them all.

Search results. Ads are shown on Google and other search engines in response to user search queries. Usually they are placed in the first 3-5 places of issuance.

Search hints. On Google, users see contextual advertising ads even before they send a query to a search engine. It is shown when you enter a phrase in a field in the list of search suggestions.

Main page of search engines. This usually displays large banner ads below the search bar.

Image search. The websites can display both product cards with a price and a link to the store, as well as ordinary text and image ads. The first option is found on Google. The displayed product cards correspond to the query in the search.

Mobile applications. These sites are also part of the Google ad networks and serve the same ads, but may have different formats.

Video hosting. For example, Google video ads can be seen on YouTube. They are shown in the format of clips within the video content.

Music services and internet radio. On such sites, audio ads are played, which are also placed through contextual advertising systems.

Types of ads and main types of advertising campaigns

The types of advertising campaigns differ not only by placements, but also in the tasks that they can be used to solve, as well as available payment models and other nuances.

Search contextual advertising

Search ads are ads that appear in search results in response to user requests. Keyword targeting works. Usually, text ads are placed on search, but some ad systems have other formats.

Such campaigns are often used to attract users at the lower stages of the sales funnel. They are already ready to buy the product and are looking for it on the Internet. However, sometimes search ads are targeted at those who are only looking for a solution to a problem.

Then the specialists set up impressions according to informational and general thematic requests. The cost per click is usually cheaper.

Search advertising is good because you can cover hot demand and attract interested users. In addition, with proper settings, it is possible to avoid non-targeted clicks and get a high conversion.

The main disadvantage of such campaigns is the high cost per click compared to other types. The main reasons are high competition when working with transactional requests like “buy an iPhone” or “order a pizza”.

Thematic contextual advertising

Thematic contextual advertising is ads that are shown in the advertising network and on partner sites of advertising systems. The key difference from the search engine is that it is displayed in accordance with the site's theme and user interests, and not in response to search queries.

An example of thematic contextual advertising: a person is on a website with homemade recipes, which means she/he may be interested in equipment for them.

Often thematic campaigns are used to reach users who are just looking at the product. In such cases, they advertise useful content, lead magnets, and anything that can attract people who are already interested in the topic, but are not ready to buy. Also, thematic advertising can be used:

- to promote goods of an average price category with a short time for making a purchase decision;

- as another touch when advertising complex and expensive products with a long decision-making time;

- to combat abandoned carts and views in online stores;

- to drive traffic to the site, for example, to develop a blog or content project.

In thematic contextual advertising, the cost per click in the same niches is usually significantly lower than in search. In addition, such advertising allows you to reach a wide audience of potential customers who are not yet looking for a product directly, and start building their trust. When they are ready to buy, they will already know about the brand and perhaps perceive it as an expert in the niche.

At the same time, the traffic here is much less targeted. There are many low-quality sites that are hung with advertising blocks and do not work. There is a risk of spending the budget and not getting leads at all, or they will be too expensive. You can avoid this and get a predictable result from thematic contextual advertising if you regularly analyze site statistics and turn off useless ones in time.

Display contextual advertising

Contextual display advertising is ads that are shown in accordance with the interests and geography of users, socio-demographic characteristics, data from CRM. They can be placed both on the search and in the advertising network, mobile applications, video hosting, music and radio services, offline multimedia screens.

Display advertising is used at the upper stages of the sales funnel for the following tasks:

- formation and increase in demand for goods or services;

- increase brand awareness;

- formation or transformation of the company's image and other similar tasks.

Sometimes such advertising is also called branding advertising, because it does not pursue the goal of direct sales, but helps to increase profits by reaching a large audience and generating demand.

The main advantage of display ads is in prominent formats, thanks to which ads attract the attention of users. In addition, such campaigns allow you to reach a large audience. The main disadvantage is that media advertising is most often about big budgets, which means that it is available mainly to large brands. In addition, such campaigns are usually paid according to the CPM model and do not bring sales here and now. This makes it more difficult to evaluate the effectiveness in terms of the number and cost of leads, conversion to purchase, etc.

Personalized contextual advertising or retargeting

Retargeting is ads that are shown in response to user actions. With their help, they usually “catch up” with users who visited the site, were interested in the product, but did not buy anything. Most often they are shown on partner sites and in the advertising network, on video hosting sites, in image search and mobile applications.

Such advertising is called personalized because it is aimed at specific users and allows you to attract attention with exactly those offers that are of interest to them.

Such campaigns are good because they allow you to reach a hot audience. The cost per click is usually lower here, and the conversion is higher.

However, the audience for such campaigns is limited to those users who have already interacted with the brand.

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