Give Contextual Advertising A Chance.

There’s been a running theme in some of my email these days. I’ve been getting dozens of them. No, they’re not male enhancement spams. They generally take the following format.

Hey Tom. Check this out. I was on a web page that discusses how badly [insert name of product here] sucks. And then, there was this ad that [popped up, popped under, appeared as a text link] right on the same page. Coincidence?

No, not coincidence. Contextual advertising is taking off in a big way, and the industry is taking steps toward converting chunks of run of the mill ROS or RON inventory into contextually-targeted placements. These contextually relevant placements are orders of magnitude greater from a performance standpoint than ROS or RON, both in terms of clicks and conversions.

But how do contextual ads work? Depending on the technology and provider used, contextual ads may target specific URLs or the very content of the page being displayed to the user. This may be done with relevance algorithms or simple URL targeting or a combination of the two.

Why then, do we see advertising for a product on pages where the product is portrayed in a negative light? For instance, an ad for a particular cell phone might be displayed on a review page where the phone gets a bad review?

This question is a tough one for media planners. In other forms of media, particularly in print, it is not uncommon for agency planners to have placement guidelines that call for repositioning or even pulling an ad when there is negative editorial nearby. Obviously, advertisers don’t want to waste their money by running advertising in proximity to negative editorial.

These policies, as threatening as they might seem to the separation of advertising and editorial, are not uncommon. And in general, they work in mass media like print. But with fragmentation of consumption being what it is on the Internet, it would be difficult if not impossible to monitor the situation online. For the time being, we are probably going to see quite a few misplaced contextually-targeted ads.

But that’s not to say that advertisers should shy away. Rather, they should stick with it. Contextually-targeted ads are producing results like double-digit click rates (which should bring back fond memories of 1997 search engine keyword buys for many of us), and significantly increased conversion on the back end. If I can use contextual advertising to raise my initial response rate to 10 percent when I’m used to a 0.1 percent on ROS banner ads, that’s 100 times more chances to convert interested potential customers. That’s the upside.

On the downside, we might have to put up with some misplaced ads from time to time. I wouldn’t completely discount the negative effects this can have on a brand, but I wouldn’t avoid contextual advertising altogether because of it. Eventually, relevance algorithms will become sophisticated enough to understand that it doesn’t make sense to advertise widgets on the widgets-suck.com site, or on pages where widgets are trashed by reviewers.

Until then, let’s look at contextual advertising as the opportunity it is – to prove that technology will continue to enhance the effectiveness of online advertising.

By Tom Hespos
Courtesy of http://www.MediaPost.com