Understanding Contextual Marketing: Definition and Best Practices

Context matters when you want to deliver relevant marketing messages that resonate with your target audience. You need context regarding what they’re interested in, what their needs are, and what pain points they have. Otherwise, you’re just throwing away money on ads that don’t even matter to your audience. That’s why you need contextual marketing to ensure that your ads and your overall marketing strategy are highly relevant and, therefore, more likely to drive conversions.

So what is contextual marketing and how does it work? More importantly, how exactly can it benefit your business? This post provides you with the answers.

What is Contextual Marketing and How Does It Work?

Contextual marketing is the practice of delivering targeted advertising based on relevant context such as their search history, browsing activity, previously viewed ads, and more. It aims to address the specific needs and pain points of individual customers through personalized experiences. So someone who has previously interacted with an ad for scarves might see more ads promoting scarves from other brands. 

As such, contextual marketing requires a variety of consumer data to gain a better understanding of the current context and gauge needs, pain points, and preferences. This data is typically collected through cookies across search engines, retail websites, social media platforms, and news sites. The contextual content is then displayed automatically to the right audience using advanced algorithms.

A common method for ecommerce retailers to engage in contextual marketing is by providing recommendations based on products or categories a customer has previously viewed before. That means someone who’s searched for baby carriers will get recommendations for baby carriers and other childcare equipment such as strollers. In the following example, Etsy recommends more Jack Skellington crochet products based on what’s been viewed previously.

Contextual marketing takes an omnichannel approach and can be implemented across a variety of channels and platforms. It’s not just limited to websites and search engines or desktop browsers. It also extends to social media and email as well as mobile apps and browsers. 

Benefits of Contextual Marketing

With the ability to create experiences that are more relevant and personalized to each individual, contextual marketing can deliver a number of benefits. Here are some of the reasons why your brand might want to consider focusing your efforts on contextual marketing.

Better Brand Visibility

Contextual marketing enables you to get your offerings in front of the right audience. You can effectively reach more people through the right channels using algorithms that pre-select consumers based on a variety of relevant conditions. This helps you boost brand visibility, making it easier to build brand awareness.

For example, when your ads are shown to people who have previously searched for social media schedulers, you can boost your brand visibility with this audience. Similarly, people who see the following ad from HeyOrca are going to learn about the platform and its social media scheduling features. 

Higher Click-Throughs

In contextual marketing, your ads are displayed to people who need it. So they’re more likely to click on it or interact with it because the ad is promoting something that addresses their needs. This means you’ll end up with higher click-throughs, which contribute to your bottom line. 

In fact, a study by Adlucent found that 70% of respondents would click on a personalized ad for a brand they know whereas 57% would click on a general ad from the same brand. Additionally, people are twice as likely to click on an ad from an unknown brand if it’s tailored to their preferences.

More Targeted Traffic

Since you’re reaching a highly relevant audience with contextual marketing, you can also attract more targeted traffic. It helps you ensure that the traffic coming to your website is very specific and highly relevant to your business. This also improves other aspects of your performance by reducing bounce rates and increasing time on site.

More Valuable Engagements

On the same note, the engagements you receive with contextual marketing tends to be more valuable. When your ad is only shown to people who are likely to find it relevant, you can also ensure that whoever engages with it is likely to convert at some point. So the engagements you get on these ads are high-value.

Improved Customer Experiences

With contextual marketing, you’re not bombarding the audience with ads that don’t even come close to what they want. Instead, you’re selectively delivering offers that closely align with their preferences, interests, and needs. This personalized approach to marketing enhances the overall customer experience, which may even influence buying decisions. According to the Adlucent study from above, 71% of consumers prefer to see ads tailored to their interests and shopping habits.

Increased Cost-Efficiency

Another major benefit of contextual marketing is the ability to reduce advertising costs. You’re streamlining your spending by targeting a highly relevant audience. This means that you’re paying for impressions and clicks that will eventually yield returns. 

For example, social media platforms like Instagram let you target users who have characteristics similar to your existing customers. Brands like Yuedpao have been able to see a 14% lower cost per message when targeting a lookalike audience compared to when targeting a broad audience.

Moreover, contextual marketing doesn’t require significant investment in terms of tools and platforms. You can get started with the data and analytics available on your website and across various social media platforms.

Greater Profitability 

On a similar note, contextual marketing eventually improves your bottom line by helping you minimize your expenses and get more out of your advertising dollars. You’re no longer spending money on wasteful mass-targeted campaigns and instead fine-tuning your targeting and messages to reach a highly engaged audience with relevant offers. 

Challenges of Contextual Marketing

Before you get started with contextual marketing, it’s important to be aware of the various challenges that you might encounter. Prepare to meet the following challenges so you can successfully execute contextual marketing campaigns.

Risk of Inaccurate Targeting

A majority of contextual marketing relies on a user’s browsing history. So there’s some risk of inaccurate targeting based on this information alone. For instance, there’s a chance that your ads may be displayed to someone who’s already bought what they wanted and, therefore, no longer find your offer relevant. 

Privacy Concerns

Since contextual marketing makes use of cookies to understand consumer behavior, some customers may have privacy concerns regarding your methods. Now with the introduction of the General Data Protection Regulation (GDPR) and other related regulations, businesses are required to get consent before collecting this type of customer information. 

5 Contextual Marketing Tips and Best Practices

Getting started with contextual marketing may seem overwhelming at first. So here are some tips and best practices to help you find success.

1. Define Your Audience

Contextual marketing relies on consumer data, so you need to start with a clear idea of the audience to collect this data from. Using data from everyone and anyone will give you too much noise that you end up confused about how to analyze or make use of the data. 

This makes it crucial to start with a definition of your target audience. For instance, you might analyze audience data from a specific area instead of targeting the whole city. Similarly, you might target people in a specific state instead of the entire country. Likewise, you can create multiple audience segments based on your goals so you can better organize your efforts and gain more valuable and actionable insights. 

2. Decide on Channels and Formats

As previously mentioned, contextual marketing is omnichannel. This means you have the opportunity to reach your audience through multiple methods across a variety of channels. Whether this involves video ads on YouTube, display ads on Instagram, lead magnet ads on LinkedIn, or even Shopping ads on Google, make sure to decide the channels and formats to focus on. 

This decision relies on the type of people you want to target and the goal of your campaign. For example, if you want to drive sales and attract end-of-the-funnel customers, displaying your products in Google Shopping ads will make perfect sense. 

Shopify, on the other hand, used a carousel ad on LinkedIn to showcase the value of their Plus solutions in the form of a case study. The carousel format makes perfect sense as it allows them to tell a story in a sequence for people to follow. Using LinkedIn as a channel also makes sense since the target audience is other businesses. 

Showing the same ad on Instagram might not have the same impact. Sure, Instagram has business users, but the platform’s user base is too broad to precisely target these B2B users.

3. Develop Audience-Centric Messaging

One of the most effective ways to create contextual content is by ensuring that your messages are audience-centric. This means that instead of making the content focused solely on the product, it should focus on how the product can add value to your audience. Your messaging should resonate with them by addressing their needs, pain points, and concerns or appealing to their interests and preferences.

In other words, contextual content should be relevant and relatable. When your audience sees the content, they should be able to understand how your product or offer is relevant to them. 

The following Facebook ad from Outback is an excellent example of audience-centric messaging. Starting from the visual, it contains text overlay that encourages the audience to “make a lasting impression.” Meanwhile, the caption explains that the product “makes you look good everywhere you go.” It also includes a list of additional benefits that might intrigue the audience.

4. Craft Relevant Offers for Specific Pages

Besides providing personalized product recommendations, you can apply contextual marketing to your website by offering recommendations for “related products” for specific pages. For example, someone viewing a product page for a smartphone may be interested in related products such as phone covers, earphones, and wireless charging ports. 

Additionally, you can create relevant offers for different blog posts and non-sales pages. This is ideal for B2B companies and businesses that rely on more informative and educational content to generate leads. 

These offers should add value to the website and give visitors more reason to engage with your business. Ideally, they should address specific pain points related to the respective pages. For example, if someone’s reading about how to create a social media campaign, including a link to download a social media campaign checklist could be a great way to execute contextual marketing.

HubSpot does this really well in their blog posts, where they craft offers that are related to the topic at hand. For instance, the following blog post on how to create a marketing plan includes a download link for a free marketing plan template.

Similarly, in our list of TikTok’s highest paid influencers, we include a TikTok influencer search tool. This lets you conduct a search right on the page without having to go anywhere else.

5. Leverage Dynamic Advertising

Dynamic ads are the easiest way to execute contextual marketing successfully. These are ads that automatically display content or offers that are most relevant to each individual shopper. This means that the content or products shown in the ads automatically change depending on who’s viewing them.

As such, dynamic advertising is a core part of contextual marketing as it’s the most effective way to deliver highly relevant ads tailored to the needs and preferences of each customer. Retargeting campaigns are a form of dynamic advertising where people are retargeted with ads that display products they’ve previously viewed.

Air Serbia made use of dynamic ads that significantly boosted online bookings. They created thousands of image ads and 120 video ads and launched using which they automatically displayed localized content relevant to each customer. Besides the visual content, the ad captions were also localized for increased relevance. This meant that the captions were adjusted to display different flight prices based on where the user was located.

Get the Most Out of Contextual Marketing

When executed correctly, contextual marketing is a highly effective way to create relevant and personalized experiences for your target audience. Use the tips and best practices highlighted above to get started and unlock the true value of contextual marketing.