What is “Contextual Advertising”?
Contextual advertising refers to an online advertising approach in which users are served with targeted ads based on their browsing history and purchase behavior. The ads are based on algorithms that examine keywords found on the pages that users are browsing.
For example, if you’re reading the latest online edition of Auto Trend, you may be targeted with ads for cars and motor oil. If you're watching Bridezillas, you might see ads for feminine products. In essence, contextual advertising hides in plain sight. It arrives at the right place and the right time, based on information that customers have willfully submitted.
Targeting customers with adverts that reflect their interests and preferences will enhance the user’s shopping experience, while increasing your click-through and conversion rates.
Contextual Advertising Pioneers: Amazon
Amazon leverages the knowledge it has gained about its customers to anticipate their needs and drive future engagement, by presenting them with relevant products. They do this using a method they call “item-to-item collaborative filtering.” This approach manifests itself in the form of recommendations for products with a line of copy, i.e. “customers who bought this item also bought that.” This approach uses contextual clues collected behind the scenes, but is more deliberate about explaining to users why they are being served specific ads.
It’s all about generating sales from a niche market of individuals, based on what they are actually shopping for.
Here are just three reasons why Amazon is the undisputed king of context:
1. Targeted Traffic
Amazon is the best at targeting the traffic that they get to their site. They track what you’re looking at and shopping for, and create personalized advertising campaigns for you.
2. Providing Quality Information
Amazon doesn’t send their customers generic, blanket e-shots. Their emails are personalized and will usually reference something you’ve bought or were thinking about buying. Their personalized e-mails generate a better response than generic, blanket e-shots, as they provide quality information to the end user.
3. Increasing User Satisfaction
Amazon’s priority is making sure that their customers have the best shopping experience possible. The way in which they reach out to consumers is done in such a way that it is not obtrusive, but actually informative and helpful. This is how Amazon continues to grow in the retail space.