A contextual advertising system scans the text of a website for keywords and returns advertisements to the webpage based on those keywords. The advertisements may be displayed on the webpage or as pop-up ads. For example, if the user is viewing a website pertaining to sports and that website uses contextual advertising, the user may see advertisements for sports-related companies, such as memorabilia dealers or ticket sellers. Contextual advertising is also used by search engines to display advertisements on their search results pages based on the keywords in the user's query. Contextual advertising is a form of targeted advertising in which the content of an ad is in direct correlation to the content of the web page the user is viewing. An example of contextual advertising is an ad offering a special price on a flight to Italy appearing on a website concerning travelling in Europe. Contextual advertising is also called "In-Text" advertising or "In-Context" technology. Apart from that when a visitor doesn't click on the ad in a go through time the ad is automatically changed to next relevant ad showing the option below of going back to the previous ad. Contextual ads are less irritating than traditional advertising. That is why it influences user more effectively. It shows user area of interest thus increasing the chance of receiving a response.
Service providers
was the first major contextual advertising network. It works by providing webmasters with JavaScript code that, when inserted into webpages, displays relevant advertisements from the Google inventory of advertisers. The relevance is calculated by a separate Googlebot, that indexes the content of a webpage. Recent technology/service providers have emerged with more sophisticated systems that use language-independent proximity pattern matching algorithm to increase matching accuracy. Media.net is the other major contextual ad network competing with Google Adsense.
Impact
Contextual advertising has made a major impact on earnings of many websites. Because the advertisements are more targeted, they are more likely to be clicked, thus generating revenue for the owner of the website. Contextual advertising has attracted some controversy through the use of techniques such as third-party hyperlinking, where a third-party installs software onto a user's computer that interacts with the web browser. Keywords on a webpage are displayed as hyperlinks that lead to advertisers. With advertisers and marketers focusing on Brand Safety and Suitability, contextual advertising plays a role in protecting a brands value. Brand positioning and contextual advertising are directly corelated to user perceptions so it is important for marketers to protect their brands by using appropriate contexts.
Agency roles
There are several advertising agencies that help brands understand how contextual advertising options affect their advertising plans. There are three main components to online advertising:
media planning—where the advertisements are to be run; also known as "placements"
media buying—how the advertisements are paid for
Contextual advertising replaces the media planning component. Instead of humans choosing placement options, that function is replaced with computers facilitating the placement across thousands of websites.
