First, there are privacy regulations such as GDPR and CCPA. Then Google announced that Chrome's third-party cookies would end in 2022. As if that wasn't enough for advertisers to deal with, Apple's iOS 14.5 update changed everything by giving users the option to track from a variety of sources instead of opting out. The end result of all these initiatives is that advertisers are scrambling to switch gears and figure out how to get their products in front of relevant consumers.

Over the next decade, a growing focus on digital privacy gradually ended the behavioral gold rush. With Apple's changes to the Identifier for Advertisers (IDFA) finally taking effect - and the impending demise of third-party cookies, forced mobile marketers engage consumers and personalize their ads by focusing on the context of their ads rather than one-to-one targeting.

To learn more about iOS IDFA turn off, you can check "iOS 14 IDFA Tracking Turn off, How It Will Change Mobile Marketing?" of our previous articles.

What is mobile contextual marketing?

Contextual ad targeting is the practice of pairing ads with relevant media to improve campaign performance based on the relationship between the ad and the relevant media. In short, it is a method of matching contextually relevant pages and ads. Thus, instead of serving retargeted ads based on a user's online behavior, ads are placed based on their thematic proximity to the content of the online page.

The ad selectively acts and is presented to web visitors or mobile app users whose interests are somehow aligned with the topic of the mobile app being advertised. For example, if a website visitor is reading an article about how to perfect their running technique, there will likely be an ad for running shoes or other running apparel.

This is in contrast to behavioral ad targeting, which dynamically targets users based on previous activities that can indicate the likelihood of their engagement with a particular type of ad. In other words, contextual ad targeting takes into account the state of the user/audience at the time the ad is placed, rather than leveraging historical information about a specific user's interests.

Contextual advertising allows retailers to create relevant marketing strategies by contextual signals about the site (e.g., keywords for page rank, topics covered, etc.). Contextual advertisers use a number of variables, topics and/or keywords relevant to their audience and then share this information with their digital media sources, who then use a variety of methods to pair ads with content, topics, keywords and images that match the parameters set by the advertiser as described below. Once a match is found, the ad is placed.

While it is up to advertisers to decide which topics and keywords are most relevant to their ads, some ad networks also allow advertisers to specify the desired level of match. If advertisers allow broad coverage, the content may require only a small degree of similarity. For example, an ad for a yoga mat might appear on content related to physical flexibility or emotional calm. Web pages need to include targeted keywords to match more specific coverage.

To learn more about post IDFA marketing, you can check "How iOS 15 shift today's mobile marketing?" of our previous articles.

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Contextual marketing advantages

Because contextual advertising is embedded in the context in which users are exploring or shopping, it offers a range of benefits to both consumers and advertisers.
Some of the most compelling advantages include:

Unimpeded by privacy regulations

In order for sellers to run effective campaigns using behavioral targeting strategies, merchants must collect user data, such as:

• The operating system used
• The websites they visit
• Likes and dislikes
• Which buttons or CTAs they clicked

However, this is where retailers are starting to run afoul of regulations such as the CCPA, restrictions imposed by Apple's latest iOS update, and the impending loss of third-party cookies on Chrome.

While these are undoubtedly consumer-friendly developments, the truth is that they also present significant barriers for advertisers to collect data on online user behavior. However, while behavioral targeting requires valid data, contextual targeting does not require a user's personal information to serve relevant ads. Instead, ads are targeted to users based on their explicit interest in a given topic or content.

Convenient and more economical

An important benefit of utilizing contextual advertising is that contextual advertising is more cost-effective than behavioral advertising.

Given that data collection is at the heart of behavioral advertising, it requires significant human and financial resources to apply effectively. In addition to data, sellers need strategies, tools and software to ensure that campaigns are properly optimized.

Brands that do not have the resources to acquire all of these necessities are essentially unable to run behavioral advertising campaigns effectively.

Therefore, the most logical conclusion is to run contextual campaigns instead, as this can help retailers deliver relevant ads to their audiences without investing a lot of time and resources. Ultimately, contextual campaigns are much cheaper to run, especially for smaller e-commerce retailers.

Context may be more relevant than behavior

The whole point of behavioral advertising is to serve personalized ads to users based on what they do, read or watch online. However, this is not always the case. Some users only engage in specific behaviors because they have a specific interest, but no intent to buy.

In addition, past behavior is not always an accurate predictor of a user's current needs and desires. That is, sometimes site visitors value what they are currently seeing rather than what they viewed a few days ago. Contextual advertising is a more effective alternative to target such consumers.

Privacy Friendly Ads

Some people do not want companies to collect information about them and their habits because they see it as an invasion of their privacy. In addition, some companies cater to these types of customers and have a stake in maintaining the privacy of their audience. For example, the target audiences of sites like DuckDuckGo or various cryptocurrency exchanges are very privacy sensitive and often do not allow services to install cookies on their devices that can track their Internet activity.

The truth is that there are ethical debates about data collection, especially when it is done without the explicit permission of the individual. Fortunately, in the case of contextual advertising, this debate is controversial because any brand or advertiser can use contextual advertising without collecting information about the user, thus allowing them to generate revenue through advertising, regardless of the target audience.

Prevent ad fatigue

Just as they avoid fatiguing subscription customers, advertisers who target consumers based on their behavior must be careful not to permanently turn away potential buyers by tiring them out. However, if merchants can use contextual signals to deliver relevant ads, they can actually add value to the user experience. Ultimately, this has a positive impact on ad fatigue because instead of being bombarded with messages from a company's different platforms, viewers will receive the right message at the ideal moment.

Content-related app targeting signals for mobile devices

App Information

Apps themselves provide some of the most basic, but also the most relevant, information about the users who use them. The categories and subcategories of apps in the Apple Store or Google Play Store, as well as the versions used, provide a general idea of the user's tastes. For example, people who play word games may prefer other word games, while people who use multiple versions of outdated apps may respond to ads for newer apps of the same type.

App information signals include:

• App versions
• App Store categories and subcategories
• Depth of impression
• Prior clicks
• Completion rate

Device Information

Anyone who has tried using their partner's or friend's phone knows that the way we configure devices is very personal. It also provides many touchpoints that mobile marketers can use to identify key identifiers. Settings such as dark mode, whether audio is on or off, and even battery level can paint a picture of the user that will help target mobile ads.

Time differences in UTC and language preference reveal the user's approximate geographic location. These are all data points that can be collected without violating consumer privacy or Apple guidelines. Mobile marketers can use contextual ad targeting to target users based on these types of details and then target them to test their campaigns to further engage with them.

Device information signals include:

• Keyboard language
• Available and total storage space
• Hardware version
• Time difference from UTC
• Dark mode setting
• Bluetooth connection

Creative Information

As much as people like to think of themselves as daring risk takers, the truth is that most consumers tend to be attracted to products they know they like. Ad creative provides a plethora of signals that mobile marketers can use for contextual targeting, such as emotion or player motivation.

Ads featuring surrealistic soldiers don't fit with games featuring cute cartoon puppies. Players who want to get on the leaderboard are less likely to pay much attention to ads that promise a "chill" experience. The insights gained from collecting these types of data points can greatly enhance the positioning of a campaign.

Creative information signals include:

• Genre fit
• Visual elements
• Mood and style
• Player incentive appeals

Understanding contextual marketing for better results

When it comes to mobile advertising, perhaps the most important key is that context matters. Understanding where the potential recipients of mobile messages are, who they are with, what is happening around them and how much time they need to think about mobile promotions are key questions, each of which adds a layer of complexity to the mobile ad formula. But their answers can help marketers become better gatekeepers by delivering the right mobile ad to the right person, in the right place, at the right time, in the right environment. As difficult as it may be, accomplishing this task may help keep consumers interested in mobile promotions and develop loyal consumers for mobile marketers.