Contextual advertising: types, objectives, and tasks

Entrepreneurs are constantly working actively to increase sales volumes and raise brand awareness. To achieve these strategic goals, they often turn to a powerful tool — the internet, as this communication channel is quite effective. To achieve your business objectives, we recommend using contextual advertising, which has remained the most popular means of promoting brands and products in the online space for several years.

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What is Contextual Advertising

Contextual advertising is any advertising that takes into account the content of the page, user interests, or their behavior during its viewing.

Most people have a mistaken impression of contextual advertising, thinking it’s only ads displayed during search queries. However, this view is erroneous, as many confuse contextual advertising with search advertising, and in reality, contextual advertising encompasses a wider range of possibilities and placement locations than just search engine results pages.

Contextual advertising is an effective and popular tool in digital marketing. It is based on displaying ads of various types, such as product, text, video, and media, to users depending on their interests or the results of their search queries, as well as taking into account the user’s search history.

Contextual advertising can be displayed both in search results and on various websites with textual, video content, forums, news sites, and media. It can also include advertising on video hosting platforms, including YouTube and others.

Contextual-search advertising, known for its effectiveness, focuses on showing content directly related to the keywords that users enter into their search queries.

What is the Purpose of Contextual Advertising?

The purpose of contextual advertising is to increase the advertiser’s profits and effectively convey the company’s marketing message to the target audience.

What are the Objectives of Contextual Advertising?

These objectives can be crucial for a business at different stages of its development and help achieve various marketing goals. For example:

  • Increasing sales volume and company profits.
  • Raising brand awareness (if using media tools in contextual advertising).
  • Attracting a warm target audience that already has an interest in your offer.
  • Re-engaging with the audience through remarketing.

Please note that contextual advertising cannot address all your tasks at once with a single advertising campaign. It’s advisable to launch a separate ad campaign for each type of task. For example, the first one may focus on increasing sales volume, while the second one targets raising brand awareness.

How Does Contextual Advertising Work?

Contextual advertising operates on an auction-based principle. Various payment models are used.

CPC (cost per click)
CPM (Cost per thousand/Mille)
CPV (Cost Per View)
Search Ads
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Banner Ads
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Video Ads
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CPC
CPM
CPV
Пошукова реклама
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Банерна реклама
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Відеореклама
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So, when you launch, for example, search advertising, your ads are displayed to users during their search queries in search engines such as Google. Users see your ads and have the option to click on them, redirecting them to your website. You pay for each actual click on your ad, and this payment is typically done through an advertising platform such as Google Ads or on other placements that you believe are optimal for achieving your goals.

Depending on the type of advertising campaign, ads can be shown to users on various platforms and in different locations. However, marketers can set up the placements of their ads, further using audience targeting in the Google Ads or other advertising platforms. This allows you to control the placement of ads in mobile apps, search engines, or on other media platforms.

Cost of Contextual Advertising

For pay-per-click advertising, the minimum cost per click for Ukraine in Google Ads is 0.01 UAH. However, the actual cost per click may vary depending on:

  • The positions for search advertising (the lower the position, the cheaper the cost per click).
  • Position depends on the keyword quality score and your maximum bid per click, determined by the auction – the more you pay, the higher your ad will be displayed.
  • The level of competition in your product or service niche.
  • Keywords (low or high-frequency, contextual or non-contextual).
  • CTR (low or high).
  • Display time.

If we’re talking about the cost per thousand impressions (CPM), it’s important to remember that the CPM cost depends on various factors such as the geographical location of your target audience, the level of competition in the market, your marketing goals, and other factors.

Our team is ready to help you calculate the optimal advertising campaign strategy that takes into account your specific objectives and budget. It’s important to us to ensure that your advertising is effective and reaches your target audience.

Feel free to reach out to us, and we will create a media plan to achieve the best results for your business.

Advantages of contextual advertising

Contextual advertising offers several advantages:

  • Quick results. It is one of the benefits of contextual advertising. After launching an advertising campaign, ads are immediately shown to users. This allows for instant sales and the attraction of potential customers without waiting for improvements in organic search results, as in SEO.
  • Result tracking. In search advertising, you can track which keywords brought users to your website, their locations, and their actions, such as making orders. Setting up analytics is essential for this purpose.
  • Region-specific targeting tailored to your business. This is cost-effective and convenient because you don’t need to spend your budget on users located outside your target areas.
  • Immediate campaign suspension and cost control. You can quickly turn off your campaign and stop spending on it. This is useful for aligning with business goals, product availability, unforeseen circumstances, or when your company, for example, suspends operations or changes its address.
  • Interaction with a warm audience: Advertisements are displayed to those who have already shown interest in a specific product or service. Contextual advertising helps attract target customers who are already in the decision-making phase of making a purchase.
  • Operates based on the CPC (cost per click) or CPM (Cost per thousand/Mille) models, and for video ads, CPV (Cost Per View), where advertisers only pay for actual clicks on their ads. The advertising system allows precise budget control and measurement of campaign results.

Disadvantages of contextual advertising

  • Contextual advertising needs to be continuously monitored and optimized to ensure its effectiveness.
  • High competition in the industry can lead to an increase in the cost of clicks in contextual advertising. If you have a limited budget, this can become a problem for your business. In such cases, it’s better to turn to professional agencies with experience in this field, which can help you maximize the efficiency of your advertising campaign and optimize costs.

Types of Contextual Advertising

Search advertising

Search advertising is placed below the search bar and at the bottom of the first page of search results. The most common format for search advertising is text-based. It resembles organic search results but is labeled as “Sponsored”.

How is contextual advertising placed in search engines?

Contextual search advertising is displayed on the search results page in various positions depending on competition and the relevance of ads. The primary ad placement positions include:

  • Top Block (1-4 links): The most relevant ads, provided an adequate CPC bid, are typically placed in the top block of the search results page. These ads are immediately visible just below the search bar and may be the first ones users see.
  • Bottom Block (1-3 links): Some ads may be placed in the bottom block of the search results page. These ads can also attract users’ attention, especially those who scroll down the page.
  • Search Results Pages: Ads can also be placed on subsequent search results pages if there are many of them. This allows advertisers to reach a larger audience that is browsing different search results pages.

This placement scheme also applies to mobile devices, where ads can appear in the top and bottom blocks of the search results page.

The placement of ads is typically determined by an auction in which various advertisers participate, and the winning ad has the highest combination of quality score and cost per click bid.

Ads in this format are shown to users who are actively searching for specific products or services related to the keywords or phrases selected by the advertiser.

This allows advertisers to adhere to the principle of maximum relevance because ads are displayed to those who are most interested at that moment. Such an approach increases the likelihood that users who see this advertising will take desired actions, such as purchasing products or ordering services.

Banner advertising

It is displayed to users in the form of banners. Banners are used on websites and can be placed through various advertising networks. One of the most well-known advertising networks for banner advertising is Google Ads, specifically the Google Display Network.

A distinctive feature of Google banner ads is the presence of two icons in the upper right corner of the banner. The first icon typically looks like an “i” (for information) and informs users that this is an advertising material. The second icon allows users to report the ad if they believe it violates the rules or their rights.

Display advertising is an essential tool for digital marketing on the internet and enables brands to capture the attention of their target audience in the online environment.

E-commerce advertising campaign / Google shopping

To set up advertising campaigns on the Google platform, including Shopping ads, you need to use an additional tool: Google Merchant Center. Additionally, you need to create a ‘product feed,’ which is an XML file containing detailed information about your products.

Nowadays, Google Shopping is a must-have for the e-commerce industry. It consistently performs well when advertising and feeds are set up correctly, since it allows brands and online stores to effectively showcase their products and offers on various platforms, providing consumers with a convenient and straightforward way to shop online.

Local advertising in Google map

Local advertising on Google Maps is a powerful tool for attracting local customers and unlocking the potential of your business on a regional scale. It can be displayed in several different ways through various Google products and services, including Google Search Network, Google Maps, YouTube, Gmail, and Google Display Network.

  • Map Markers.  Advertising markers can be displayed directly on the map. In comparison to organic markers, which are typically red, advertising markers can be green and square. This makes it easy for users to distinguish advertising results.
  • Side Panel. Another way to display local ads is by placing them in a side panel below the map or beside search results. In this case, the advertising results can look nearly identical to organic results, except for the “Sponsored” label indicating that it’s a paid advertisement.

Video advertising

Video advertising is a composition of several video frames, typically accompanied by a crafted slogan or message. It’s important to note that such video clips may include both audio and be silent.

Today, there are five primary video advertising formats:

  • In-Feed ads, which appear in search results or in the news feed on various platforms.
  • Video banners. This ad format is designed to capture attention for a new product or service or reach a broad audience in a short period.
  • Out-Stream ads, which play on Google partner video resources and are not part of the main content.
  • In-Stream ads (overlay) with the option to skip and without the option to skip. They play before, during, or after the main video content, such as YouTube videos. Some of them can be skipped after a certain viewing time.
  • Overlay ads that appear at the beginning, end, or at specific intervals of the main video content and cannot be skipped. They are often used for branding or grabbing attention.

Performance Max

This advertising campaign utilizes various Google advertising channels, such as search, display network, Gmail, and YouTube, and serves as an example of an integrated multimedia marketing strategy. It covers different platforms and formats, allowing advertisers to deliver messages to diverse audiences in various contexts.

The optimization of this campaign is carried out through the use of artificial intelligence, which leverages data and user behavior analysis on the internet to target audiences interested in the product or service. By using Performance Max, your chances significantly increase when it comes to attracting new customers and improving conversion rates.

Conclusions

The concept of “contextual advertising” is very multifaceted and includes not only the familiar search ads but also video ads, remarketing, shopping ads, and other types. Google’s search engine covers a vast number of users worldwide and is the clear leader, surpassing its closest competitors.

Contextual advertising works most effectively for medium and large businesses. In some cases, it can be useful for small businesses, but clicks may often be too expensive for them.

In highly competitive industries, we recommend not setting up advertising on your own but turning to our UAMASTER specialists because our agency employs only professionals. Contact us now, and we will guarantee to set up contextual advertising for you with quality and professionalism.