10 Contextual Advertising Trends for Internet Marketers and Bloggers

For most advertising campaigns to be successful, it has to be targeted — reaching the people who are interested the most.

An example could be Google Adsense, which attempts to match the adverts displayed to the content of the webpage.

Larry Kim reports 10 Facts and Trends about Contextual Advertising:

1) Advances in Advertisement Relevance Software
Developers are seeking to improve the relevance of targeted advertisements displayed to the viewer. Currently, the relevance of an advertisement is determined by technology such as Googlebot and Mediabot. This technology works by inserting JavaScript into the webpage in order to display relevant advertisements to the user. The algorithms are currently being improved to more accurately match advertisements to the preferences of the consumer.

2) Message Customization and Contextual Advertising
Developers are devising ways to determine the ages of the individuals using a particular computer or the family groups associated. The French are currently using this form of intuitive digital advertising. Developers are seeking ways to customize the messages displayed to the audience. The advertisements, in the future, will also be able to gain more information from the audience to influence an individual buyer through message customization.

3) Software-Free Contextual Advertising
Some companies choose to work directly with publishers to include contextual advertising. These companies elect not to rely on software. About.com uses the Sprinks service to insert contextual links. Applied Semantics also solicits ads in this manner. Their AdSense program analyzes the content of their web pages and selects ads that seem most appropriate. This company has placed ads on USA Today, Excite, and iWon. The company expects to gain several more major customers within the month.

4) Contextual Advertising and Video Games
Developers have tried to insert contextual advertising in video games. Sony’s Wipeout HD was one of the first games to contain contextual advertising before loading. Gamers complained and immediately the advertisements were removed from the games. The advertisements were presented at a time that was more annoying to the gamer than helpful. Developers are seeking ways to integrate contextual advertising without interrupting the load time of the game and the user’s experience. The University of Luxembourg has created a game called AdRacer to test new advertising techniques. As the player is driving, advertisements will appear on roadside “billboards.”

5) In-Text Video Contextual Advertising
Adbrite was one of the first to market in-video text advertisements on YouTube. ScanScout uses General Catalyst Partners in order to place advertisements over the video before viewing. Video-on-video advertising is possible as well. The ScanScout technology works similarly to the AdSense technology. ScanScout scans the video for content and then provides advertising based on the content of the video.

6) Billboards and Contextual Advertising
Companies are making plans to embed cameras in billboards and scan the faces of people who pass by the billboard. The software will tell the advertiser how many people passed the billboard and how long they looked at it. Most individuals will have their gender read by an accuracy of 85%. Men and women could see different ads based on their gender. These campaigns intend to be “ultra-targeted” to direct advertisements only to individuals who frequent the area. This is another form of contextual advertising that may be available in the near future.

7) Viral Videos and Contextual Advertising
Viral video uses the participation of the audience to create user-generated media. Businesses will try to understand their audiences to solicit involvement from user-generated media. Consumers will become attracted to messages that are relevant to them as opposed to targeted at a general audience. Businesses no longer need absolute control with this software and consumer participation.

8) Contextual Advertising and Pricing
Publishers and advertisers are encouraged to work together to maximize the amount of money that they both earn. If they work together, they both will earn a profit. Advertisers enjoy the ability to set their own prices for their product. However, companies are trying to determine if a price can be set for all members of the network. Google introduced the Smart Pricing scheme that will allow prices to be dynamically set. Yahoo! has opted to set one price for each company rather than using software to determine a price for the product. The problem with this option is that most companies are compelled to set the price to the least valuable site in the network.

9) Contextual Advertising and Control
Publishers were excited about the ability of splitting the profits with contextual advertising companies when the idea was initially introduced. Publishers can now select more than one contextual advertising company. Publishers will gain more control when they are allowed to choose. Publishers may also have the ability to select specific ad categories. For example, a publisher may know that an individual that likes a certain type of music may also like a certain type of stereo speakers to accompany the music. This allows publishers the control to select advertisements that make these connections in their audience.

10) Contextual Advertising and the Migration Toward Behavioral Advertising
Behavioral advertising is expected to become the next contextual advertising. Behavioral advertising records the user’s behavior rather than just the user’s preference. Many people are uncomfortable with the privacy issues that surround targeted advertisements and tracking a person’s behavior on the Internet. Contextual behavioral advertising will be based on the user’s surfing behavior in prior sessions. Therefore, two individuals will see entirely different advertisements even though they are visiting the same site. The behavior is tracked via cookies stored on users’ computers. Many companies are interested in pursuing this practice, because experts have shown that the click through rate and, more importantly, conversion rates are higher with behavioral marketing than they are with other forms of advertising.