Once upon a time, the emergence of third-party cookies forced contextual advertising to take a backseat to behavioral targeting. And for good reason: The cookie era meant marketers could reap the many benefits offered by behavioral targeting—benefits that contextual advertising simply could not match.
Third-party cookies work by tracking users across the web and consumers worldwide have become more and more leery of how brands are using the data collected about them through this kind of tracking. For example, 72% of U.S. consumers say they’re less likely to purchase again from brands that fail to handle consumer data responsibly, and over 20% have avoided buying a brand because of its data privacy practices.
The result of these privacy issues? Increased regulatory pressure, followed by Apple and Mozilla’s decisions to restrict third-party cookies in Safari and Firefox. And then came the penultimate blow: Google’s announcement that it would begin phasing out third-party cookies in the second half of 2024.
And as a cookieless future draws closer, contextual advertising appears set to don the mantle of its former glory. But despite being the latest buzzword in the adtech world, is contextual advertising the most effective cookieless solution available? The answer: Maybe not. After all, why take a step back when you can step forward into a new solution? And that new solution might already be here, because there’s a cookieless alternative to contextual advertising that provides the cookie-based behavioral targeting benefits that marketers have grown to love—all while remaining cookie-free and privacy compliant.
What is Contextual Advertising?
As its name implies, contextual advertising refers to ad placements on web pages based on the context or content of the page. There are two types of contextual advertising:
- Topics-based contextual advertising. With this type of contextual advertising, your ad is placed based on the topic and subtopic the content of a page falls within. For example, a retailer of high-end skincare products that chooses the subtopic Beauty & Fitness > Face & Body Care might see its ad for a face cream placed on a skincare product comparison page on a beauty site.
- Keywords-based contextual advertising. This type of contextual advertising lets you use keywords to get a more targeted placement of your ad by matching your ad to the text on a page. For example, if the skincare retailer above selects the keywords “skincare routine”, “skincare do’s”, and “face moisturizers”, its face cream ad might be placed next to an article on how to build a skincare routine that’s featured in the self-care section of an online newspaper.
The Rise of Contextual Advertising in a Cookieless World
In addition to data privacy, contextual advertising offers marketers other benefits, such as:
- Cost-effectiveness. Unlike behavioral targeting methods, contextual advertising is generally more cost-effective because it doesn’t require huge amounts of data, which can be costly to collect.
- Broad reach. With contextual advertising, you have access to all the websites within the network you’re using, limited only by the topics or keywords you choose.
- Relevance. Because your ad is placed on a page based on its content, you have a certain level of assurance that your message is relevant to a user’s current interest.
These benefits bode well for the continued popularity of contextual advertising. But another viable cookie-free option exists that can be more effective: Interest-based advertising, which, as you’ll see below, offers additional benefits contextual advertising can’t provide.
Interest-Based Advertising in a Cookieless World
One quick look at recent adtech headlines makes it clear that contextual advertising dominates the leaderboard of cookieless solutions. And yes, contextual advertising does enable marketers to reach their audiences using relevant ads in a privacy-compliant way.
But consider the main reason that has given rise to the impending cookieless future: The deprecation of third-party cookies driven by consumer desire for better privacy. This is key to understanding how interest-based advertising can be an effective solution in a cookieless world.
Yes, There are Privacy-Compliant Interest-Based Data Solutions
Interest-based advertising is a form of behavioral targeting that displays ads to users based on their interests. It’s long been an effective way to reach audiences within an environment driven by third-party cookies. Given this context, then, how can it be a viable cookieless alternative to contextual advertising?
While interest-based advertising has thrived since the introduction of third-party cookies, interest-based data itself can be collected without the need for such cookies. Here’s how:
- First-party data. First-party data has always been a valuable data source for brands, and this won’t change in the new cookieless era. Whether collected through first-party cookies on brands’ web properties or via direct interaction with users, this data provides a rich resource for driving interest-based insights.
- Privacy-centric data providers. But interest-based targeting is still an option even for brands that don’t have access to large amounts of first-party data. Within the broader adtech ecosystem, there exists a number of data providers, such as ShareThis, that have built robust and privacy-compliant data solutions that continue to effectively power interest-based advertising, all without the use of third-party cookies.
Why Interest-Based Advertising is the Better Option in a Cookieless Future
Interest-based advertising rivals contextual advertising as a “safe” data solution since third-party cookies aren’t required. But it also has an advantage over contextual advertising because it offers a number of benefits similar to those seen with behavioral targeting in the current third-party cookie environment.
Using interest-based data, you can segment your market into clusters based on users’ interests. This gives you an edge over contextual advertising when it comes to more precisely fine-tuning your targeting.
For example, with contextual advertising, a running shoe brand might place a general ad for running shoes on a page about nutrition for runners. But with interest-based segmentation, the brand could display a “best distance running shoe” ad on that nutrition page, for users who have been segmented into a marathon runners interest cluster.
Personalization is extremely important to today’s consumers: 80% of consumers are more likely to buy if offered a personalized experience, and 60% are more likely to become a repeat buyer after such experiences.
Contextual advertising offers personalization based on assumptions about a user’s interests derived from the content of the page. So, for example, with contextual advertising, you might show the same ad about a Bermuda travel resort to all users landing on a page about Bermuda tourist attractions. But using interest-based data, you could deliver an ad about wedding facilities at that resort to a user who’s planning a destination wedding—a more precisely targeted message that has a higher chance of a conversion.
Enhance your first-party data.
In a cookieless future, the data you collect has significant value. After all, these are your customers, your audience, and your market, and you can gain invaluable insights from how they interact with you online. But there’s only so much you can glean from the data you collect directly.
Interest-based data from a privacy-compliant data provider enhances your first-party data by capturing additional information about prospective customers. For example, someone who’s looking to purchase might not yet be ready to take the actions on your site that signal an intent to buy, such as filling out a form or downloading a sample, but interest-based data can tell you they’re taking actions outside of your site that do signal an intent to buy, such as reading reviews or making product comparisons.
Quality and cost-effectiveness.
Working within a cookieless environment gives marketers the opportunity to shift their focus to quality rather than quantity. This is because interest-based targeting lets you finetune the delivery of your message to users with a precision that contextual advertising can’t match. The end result? Higher quality leads, which translates into better cost-effectiveness in the long term.
And while it can be costly to collect the vast amounts of first-party data necessary to drive interest-based insights, privacy-compliant data providers offer affordable solutions that allow even smaller brands to harness the more accurate targeting of interest-based advertising.
While undeniably valuable, behavioral targeting in the past has given rise to a common consumer complaint: the sense of being “cyberstalked” by brands as users make their way across the web. However, interest-based data can be leveraged to deliver messages that are in line with users’ interests and intent, so your ad delivers the precise information your users need without having a jarring effect.
For example, based on insights gleaned from interest-based data, you can display an ad offering a 30% discount for a specific stand mixer to a user who’s at the point of choosing between different brands of stand mixers. This kind of relevance isn’t jarring because it speaks to an issue that’s top of mind for the user, and offers the incentive and information they need to make their buying decision with confidence.
More Than One Viable Cookieless Solution
As privacy concerns have come to the forefront, contextual advertising is experiencing a rise in popularity. This has led to a common perception that it’s the best “safe” option because it doesn’t rely on either cookies or identifiers.
But interest-based targeting can deliver more powerful results than contextual advertising while still remaining privacy-compliant, because it uses first-party data or privacy-centric data or a combination of both. This provides brands with another viable and potentially more effective cookieless solution.
Marketers worldwide are grappling with uncertainty about the performance and scalability of new solutions such as cookieless interest-based targeting. But there’s one thing we can be certain of: Once these new solutions become more tried and true through iterative testing brands can be more confident about using such cookieless solutions to achieve the precision they need to reach the right customers, a precision that contextual advertising cannot provide.