Contextual Targeting vs. Behavioral Targeting

Friday, September 23, 2016

Contextual targeting and behavioral targeting are not one in the same. Learn why they are different, and why Big Data makes such a difference when it comes to deciding which type of campaign to implement.

Contextual targeting is ad placement done smartly. Rather than relying on broad demographics, location, and simple browsing history, contextually-targeted ads connect the right message to the right person at the right time. Contextual ad campaigns show the user content similar to what’s on the page that they are currently browsing.

Behavioral targeting is done in a similar fashion in that it uses cookies to determine the best ads to deliver to the prospect based on their browsing history. However, it will not be targeted as supremely as a contextual ad because the content can be completely different (i.e. a clothing company that the user browsed shows up on an insurance company’s website, while a contextual ad would be a sports ad showing up on a sports site.)1

Differences in Targeting Within Local vs. National Ad Campaigns

Digital marketing experts have frequently hailed behavioral targeting as being superior to contextual targeting, but it is not without caveats. If the marketing platform lacks access to big data sets on prospects, contextual ads are going to be a safer bet than behavioral targeting. For small brick-and-mortar businesses not located in major urban areas, data sets aren’t as likely to be available on their prospects. Because these advertisers are not running large national campaigns, conversions would be lower with a behavioral targeting strategy since they depend on local foot traffic and subsequently need to target local prospects.

Behavioral targeting is only as effective as the geographic target and its population in order for ads to be displayed on sites with the highest relevance to the product as well as location. Big data is really what powers behavior targeting, on account of location, browsing history, spending habits, and other information. An ad campaign that relies on cookies and other behavioral factors gleaned from thorough data sets is only as good as the data available by location. If big data’s not there, it’s not going to have much of an effect.

Contextual targeting on the other hand is driven directly by the page’s content and relevant keywords. Studies have shown that contextual targeting can have almost twice the click-through rate of the cookie-based targeting used in behavioral campaigns. Contextual targeting can also be more cost-effective because it’s not only cheaper than behavioral targeting (behavioral targeting costs 1.94 times as much as contextual targeting, and has a cost per action that costs 3.18 times per action as contextual targeting does2) but it doesn’t rely on prospects’ locations at all.

Using behavioral targeting for local ad campaigns is challenging, as the smaller population can present insufficient ad buying opportunities and a limited amount of prospects to bid on. Behavioral targeting makes more sense for large advertising campaigns appealing to a broader demographic, because these campaigns provide plenty of opportunities to be selective. Contextual targeting can be successfully employed in large national campaigns where there’s more room for the advertiser to be choosy regarding their prospects, but when it comes to local campaigns it has far higher likelihood of clicks and conversion.3

It’s clear that contextual targeting and behavioral targeting both have their advantages, but contextual targeting is often a better choice because it costs less, and provides marketers the ability to advertise effectively without depending on campaign size or location.