As Internet marketing evolves, marketers are under increasing pressure to choose online advertising solutions with the highest potential for generating desired results.
A solution with merit is search, which can serve as an effective channel to attract customers. However, search’s popularity has posed some challenges to the marketer, namely a lack of available inventory. With more marketers turning to the Internet to conduct ad campaigns, little choice is left in regard to ad placement and frequency. As a result, there is fierce competition, making ad and cost-per-click (CPC) rates soar. Other advertising tools can supplement search and provide marketers with more cost effective options.
Enter contextual advertising. Contextual advertising is a viable option for marketers who are looking beyond search to enhance ad performance. Whereas space on search sites is limited, the space available for contextual ads is not since they appear on content sites, such as those for newspapers and magazines. With nearly 30,000 newspapers and magazines in the US alone, it’s easy to extract the potential – less competition for inventory and far less expense.
Contextual advertising and the Internet are a perfect match because they are both centered around dynamic information. As an individual browses the Web, they are presented with advertisements that are deeply relevant to what they are reading. The high degree of an ad’s content relevancy promises the potential for a higher click through rate and an increase in sales.
Contextual advertising also attracts a different kind of consumer that is not targeted as effectively through search. People that use search are active buyers, searching for something specific that they have already seen an advertisement or promotion for elsewhere. Therefore, the number of new prospects that can be reached through search is limited. Contextual, on the other hand, targets “passive buyers” since many people are incited to purchase a product only after they’ve seen a contextual ad that corresponds to what they’ve read. In essence, contextual creates a new set of prospects for the advertiser.
Meredith Corporation is an example of a company that displays contextual ads on their sites, such as Better Homes & Gardens. The value for them is that they’ll be able to offer relevant ads at the right time to the right customer – a meaningful business proposition. Financial analyst firm U.S. Bancorp Piper Jaffray expects contextual advertising to generate $100 million this year alone and grow to a $1.4 billion market by 2008.
Given this, it can be safely predicted that as search becomes more saturated, marketers will look to supplemental and highly targeted solutions such as contextual advertising to achieve cost effective and powerful results. I, for one, am looking forward to it.