What makes contextual advertising different is that your ads do not appear on search engine result pages.
Rather, they appear directly on pages of content found on websites. In effect, if you visit a website that has information about digital cameras, you may encounter contextual advertising of related products, such as memory cards, camera cases, zoom lenses, battery recharges, etc.
Although many analysts consider contextual advertising to be a new phenomenon, it has actually been present since the Internet became a commercial enterprise, mainly in the form of banner advertising, popups, and other ads.
In the past, consumers considered these means of advertising undesirable and even an unwanted part of their search experience, viewing them as unnecessary clutter that detracted from the actual information available on a web page.
For example, most of us have had the experience of visiting a website and then being prompted to allow the download of software, which, once installed on our computer, will allow contextual ads in the form of popups, etc. to be shown as you travel through various websites.
If your computer is not set up to prompt you before downloading software, you, may actually have such programs installed on your computer, without even knowing it.
Sometimes these types of program encourage the visitor to download the software by offering free benefits, such as access to coupon sites or dictionary/encyclopedia resources.
This practice is best known as copyware/adware and is regarded very negatively among online users.
By the Near 2003, contextual advertising had become a form of advertising that consumers did not generally respond well to.
And many users began to install popup blocking software to cut down on the incidence of unwanted ads suddenly appearing a new window or as part of the current browser window.
However, also in 2003 a new facet was introduced into contextual advertising that changed its public perception, and it has become a fast-growing means of capturing new traffic for advertisers.
What makes pay-per-click contextual advertising different from pay-per-click search engine advertising is not just how and where it appears, but also the type of user it appeals to.
Pay-per-click contextual advertising is designed to appear on pages of a website that have content that is highly relevant to the ad.
Depending on which search engine is delivering the advertising, the ads may appear on the right side (or the top or bottom) of the web page, and be similar in appearance to standard PPC ads, with a title, description, and URL to click on.
The types of websites that typically carry contextual ads are news sites, magazine sites, educational sites, product review sites and other reference sites.
There is little-to-no incentive for an advertiser to add contextual ads to their own websites, because competitors’ ads could wind up being shown there as well.
While contextual ads arc mostly text-based, a relatively new development in contextual search is the introduction by Google of the ability to include images in contextual ads, thus allowing the advertiser the opportunity to show a product as well as provide a link to the related website.
Another difference between the two is the delivery method. Contextual ads are generally served up via a complex algorithm that determines which ads to display on a website that is in the contextual ad business.
Thus, the advertiser does not have as much control as with PPC search, where they determine their positioning via keyword bidding.
Bidding is a part of contextual search, but usually on a group of keywords, a channel, or a category level.
In addition, contextual ads tend to be clicked on by visitors who are in a different stage of the buying cycle and may not be interested in purchasing a product at all.
Because they appear in the websites of, for example, online newspapers, a contextual ad may be shown just because the text of the article mentions the type of product, even if the intent of the article has nothing to do with selling that product.
The person reading the article may have no intention of purchasing that product at that time, but may, out of curiosity, click on the contextual ad just to see what it’s talking about and to get a little more information about a product they might not know much about.
Pay-per- click ads on a search engine, however, are more often clicked on by visitors who are interested in purchasing the product in question.
Although many may still be in the research phase, they more often have a purchase in mind.
Therefore, contextual ads usually have a lower conversion rate or ROI than search pay-per-click ads, because of the intent of the visitor clicking on the ad. Nevertheless, the contextual ad campaign is still charged for each click on the ad.
Given this, advertisers are divided in their view of contextual advertising. Some think it is a worthwhile endeavor, while others see it as an ineffective method that they do not wish to expend ad dollars on.
Some advertisers also express concern that their ad could be served up on a website that has little relevance to their product, if the algorithm is not constructed appropriately, as reportedly has happened on occasion.
However, there are positive points about contextual advertising that have contributed to its growth of use:
• Contextual ads tend to have more online exposure than search pay-per-click ads, because their placement on partner sites of the search engine is determined by their relevance to the content of those sites, and is not totally dependent upon keyword bidding to achieve placement.
• Contextual ads are a good source of revenue for the partner sites that include them. Because the ads are not in competition with the “product” being offered by the content website, they are generally seen as a plus by content partners.