The Effectiveness of Contextual Advertising

The Effectiveness of Contextual Advertising
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The Effectiveness of Contextual Advertising
1 introduction
Recent years have exhibited increasing funding of popular internet content such as blogs, e-mail, and social networking by advertising firms. Many online internet content and service providers (web publishers) obtain most of their revenues from online advertisement. Behavioral grouping of internet users is a strategy used by internet content providers to increase the value of advertisement.
Contextual advertising has been gaining momentum since the advent of online search engines and mobile phone usage. This form of internet marketing targets customers with specific traits such as demographics, nationality, origin, purchasing power and history. The use popular social media network such facebook and twitter has further increased the use of online contextual system on mobile browsers targeting the youth population.
A study conducted by Beales, (2009) found that this method of target advertisement has been effective and successful in securing huge amounts of revenues to web publishers which are gained from fees charged per every successful click on the advert link by the web user. This has and continues to generate more revenues as Compared to non target run of network advertisements. Beales (2009) also found contextual advert to be much more effective at converting users of the web to buyers of advertisers’ goods and services. His study findings therefore points to the increasing importance of targeted advertising by many companies.
Contextual ad is beneficial to consumers because they are treated as individuals rather than collectively making the method applicable in behavioral marketing of products and services, (Chen, et al 2001). In this form of advertisement, Consumers’ behavior and purchasing habits can be easily determined through the system and necessary adjustment made to win consumers with certain behavioral traits. The advertiser is able to reach more targeted consumers who have strong preference for their products hence eliminating wastage advertising experienced in other forms of advertisement. This saves unnecessary costs and leads to high profits.
Nevertheless, this method has raised some fears and concerns more specifically on the privacy rights and policies. The system has invaded on the privacy of individuals by way of interception web traffic without the consent of the web user. Most targeted fans surveyed in USA have cited violations of their privacy rights through tracking of their online behavior.
Overview of contextual advertising
Advertisement is usually treated in two ways, i.e. from the advertisers and the consumer point of view. Advertisers make decisions of planning, creating and conveying an ad whereas consumers react to the ad created by advertisers. Interaction of these two key players is facilitated via the communication process, (Sliburyte, 2007).
The effectiveness of an ad is determined by how the content influences the target consumer and this requires proper ad research to help increase the effectiveness of an advert. Schollten, (1996) and Wilkie, (1994) identified four main goals of advertisement as persuasion, reinforcement, reminder and acceleration of purchasing.
Contextual advertising incorporate four main players:
The first one is the publisher who is the owner web pages to which the advertisement is displayed. His main aim in advertising is maximimize on the revenue generated through provision of good user experience to the clients.
The second player is the advertiser who provides the supply of advertisements. In traditional form of contextual advertisement, his aim is to promote the products and services. In the modern online environment, the activities of advertiser are organized around product campaigns through a series of ads to market and promote their products and services.
Another player in contextual advertisement is the ad network who mediates between the advertiser and the publisher and selects the adverts to be displayed on web pages. He shares revenue generated from advertisement with the publisher.
The final players are the users who visit the web pages of the publishers and interact with the ads. This are the targeted consumers of the products and services being offered by the advertiser in the market.
Contextual advertisement is classified under direct marketing because its campaign is expected elicit direct response and reaction from the audience. The measurement of user’s reaction and response to the advert can be easily measured in online contextual advertisement because the user can easily follow up by clicking on the link and get to the advertiser’s website within seconds. The payment for this form of advertisement is based on the number of times the advertisement link was clicked.
Workings
A contextual advertising system works by scanning keywords in the website and returns advertisement to the webpage and is based on what the user is viewing. Advertisement is sent via website or pop-up ads. An example is when the viewer is on sports website which uses contextual advertising, he is likely to see advertisement of sports companies; those offering/selling sport ticket, sports wear and sport lottery companies.
Internet search engines such Google and yahoo displays advertisements related to the search results. A Person searching for educational trainings education is likely to see advertisement by colleges and universities offering educational training related to the field the user is searching.
The content thereto is related to the webpage and search results the user is viewing. This ensures that only advertisement correlated to what the user is interested in are displayed, for instance when searching information on travelling in North America, the most likely contextual ad to pop are airlines and flight prices in North America. Contextual ad system automatically changes to a different relevant ad after some time if the user doesn’t click on the link.
Content providers
The main providers of target advertisement are popular internet search engines, video sharing websites, micro-blogging sites and social networks who have embraced advertisement as the their preferred revenue generation avenue. Contextual advertisement is much more preferred among the above mentioned sites because of their high penetration among the internet users across the globe.
Contextual advertisement has been practiced by advertising agencies in the ads industry for many years in history through the use of media such TV and newspapers; which depended on the type of product being advertised, (Narasimhan, 1988). For instance, TV channel that air sporting activities have been used to advertise products of sporting companies such adidas, Puma and Nike. However, most thrilling developments in contextual advertisement have taken place in the online environment.
The use of sports section in the newspaper to advertise sporting products has been practiced for many years. The reason behind this approach is that lovers and users of sports wears are likely to see the products and buy unlike when they are advertised in other sections of the newspaper. This also applies to advertisement through other forms of media including magazines, indicating the enormous use of target advertisement as a marketing promotion strategy.
According Loewenstein et al (2011), the structure of the plot in television ads can improve consumers' brand attitudes and promote brand recognition. Contextual ads through the use of media such TV and newspapers has been used over the years before the advent of online target advertisement and their effectiveness entirely depend...