Last Updated: November 16, 2020

In the film Minority Report, John Anderton (played by Tom Cruise) walks through a mall and is greeted personally by advertising billboards: “John Anderton! You could use a Guinness right now!” In a later scene, another advertisement is even more target-specific: “How did those turtleneck sweaters you purchased work out for you?” In the near future—at least as presented here—our ads will know who we are and what we’ve bought.

Or perhaps this isn’t just in the future. In the present, contextual advertising knows what we’re searching for, what websites we’re visiting, and even perhaps what physical location we’re in. And armed with that knowledge, the companies using this type of marketing seek to sell us even more.

What is contextual marketing?

Contextual marketing refers to online and mobile marketing that provides targeted advertising based upon user information, such as the search terms they’re using or recent web-browsing activity (See also Computational Marketing).The goal is to present ads to customers representing products and services they are already interested in. For example, a customer performs an Internet search for commuter cars and fuel efficiency. Afterwards, they check their daily news website—and the ads which show up alongside the news are for hybrid cars. The customer, already thinking about saving fuel on their commute, clicks on the ad to check out the latest hybrids.

Who implements contextual marketing?

The textbook example of contextual advertising is Google’s AdSense program, which uses the terms entered into each Google search to select an appropriate advertisement for that user (See also Pay-per-Click Marketing). Run a few different searches on Google, on different topics, and see what kinds of ads pop up. You’ll find that all kinds of different companies use this type of advertising, from realtors to insurance agencies to technology companies to restaurants and hotels and more. Every business wants a higher return-on-investment in advertising, and contextual advertising gives them that opportunity.

Objectives of Contextual Marketing

By showing visitors ads they’re actually interested in, advertisers and websites:

  • Increase the number of clicks per ad
  • Increase conversions of sales leads to actual sales
  • Decrease customer annoyance at ads
  • Eliminate unprofitable ads (showing low or negative return on investment)

In addition to search engines like Google, many other types of websites use contextual ads. News websites, such as CNN or The Wall Street Journal, can run contextual advertising to match ads to the articles being viewed. Social-media websites and blogs can use keywords in members’ posts and comments to trigger contextual ads. Any website with a variety of content can use contextual advertising, and match the content viewed with the ads displayed. Meanwhile websites with a smaller variety of content can still take advantage of contextual marketing by using tracking cookies—in order to show advertisements based not on the current website content, but upon all the websites the user has recently visited.

Internet contextual advertising has been developing over the past decade, and continues to become more specific as the Internet becomes more accessible and integrated. Meanwhile, a new type of contextual marketing is being developed around mobile devices, as more and more people carry such technology with them everywhere they go. Such devices can use your geographic location to provide the context for ads, showing only local businesses and promotions. Mobile devices can also apply information about their use to provide contextual ads—for example, by delivering a special offer on an unlimited data plan to a customer who’s nearly used up his or her monthly allowance.

Meanwhile a near-future development in contextual marketing does involve billboard advertising. Some companies are making plans to embed cameras in certain well-populated billboard locations (such as bus terminals or malls) that will track how many people are in front of the advertisement, and how long they’re looking at it, triggering different ads. Additionally, software that recognizes the gender of the viewer can be used, so men and women are presented with different targeted ads.(See also Street Marketing)

For what kinds of customers is contextual marketing effective?

Contextual marketing becomes more effective the more customers spend time online, or otherwise connected to the Internet through mobile devices. It is through interacting with networks that customers provide the information that makes contextual marketing work. Of course, providing this information is not always (or even often) a conscious decision; when people use a search engine to get information about a particular person, place, or product, they’re probably not thinking about the fact that they’re also providing information for contextual marketing. As long as the contextual advertising is doing its job without being invasive, they simply go on with their online activities—and perhaps click on a few more ads, since they find them more interesting. The more comfortable a customer is with online shopping and media, the more responsive they are to contextual advertising.

However, the fact that contextual marketing collects and stores information about users does bother some users, who feel their privacy is being compromised. Apple found themselves embroiled in controversy when people found out that the company’s iPhone and iPad kept a record of the geographic places they’d been, and that the information could be retrieved to map their [approximate] movements. Apple was not actively tracking people’s movements; the devices simply added data to Apple’s Wi-Fi hotspot and cell-tower database, for improving wireless service—and triggered contextual ads through the iAds system. Nevertheless, many users became concerned about their privacy.

An important lesson learned from this is that Internet marketing needs to be transparent, so that customers can know exactly what is going on and how it involves them. When customers have the knowledge and power to choose participation, they no longer feel like their privacy is being violated.

How is a contextual marketing campaign developed?

Online advertising typically involves three components: creation of the ad, planning where the ad is to be run, and arranging how the ad is paid for. Contextual marketing replaces the middle step; instead of advertisers deciding which websites should host their ads, the computer software enables the ad to be placed across thousands of websites, and triggered by users’ keyword searches and other online activity.

"Places" Featuring Contextual Advertisements

  • Search engines
  • Social media
  • News websites
  • Mobile devices—which in addition to providing ads can generate contextual electronic coupons
  • Spontaneous networks, such as those created by certain photo- and music-sharing applications
  • Video games? So far, attempts at contextual advertising here have backfired.
  • Billboards? Maybe in the not-so-distant future, John Anderton.

This makes the choice and development of contextual advertising software particularly important, as no computer program is as capable as a real person at identifying appropriate context. As a result, sometimes embarrassing errors can result. For example, a news article on celebrity “croc-hunter” Steve Irwin’s death triggered an ad on life insurance—which tended to be perceived as bad taste on the part of the advertiser, hurting their reputation. In another particularly unfortunate case, a news article about severed feet washing up in a Canadian province triggered an ad for a moving agency called “Put Your Feet Up.”

Writing a computer program to recognize language context, as opposed to simply keywords, is quite difficult. The word “bank,” for example, can refer to a financial institution, the side of a river, the act of counting on a particular event, or even a bank shot off a wall. But an ad about financial banking is probably not interesting to someone searching for a good fishing spot on the banks of the Ohio River.

Contextual advertising software can also be written to exclude certain words or websites. For example, since advertisers typically don’t want to be associated with negative events, they may wish to avoid appearing in the crime sections of news websites.

Meanwhile, developed contextual marketing campaigns will use more than just search terms and browsing behavior. They should be considering not only the context of words, but also location, purpose, and mobility. Someone at home will find different advertisements relevant than the same person at work. Someone checking Facebook is probably in a social mindset, and would find ads regarding social events and food more relevant than they would have an hour earlier, when they were checking their stocks. The effective campaign needs to be able to adjust to these moment-by-moment variations in context—particularly as Internet access is becoming more common through mobile devices. (See also Mobile Marketing)

What career titles work with contextual marketing strategies?

Internet Marketing Managers

What do they do?

What type of salary should I expect?

  • Internet Marketing Manager
    Median annual pay: $116,010
    Top earners: $187,199+
  • Market Research Analyst (category includes Media Analyst)
    Median annual pay: $60,570
    Top earners: $111,440+

Source: U.S. Bureau of Labor Statistics

  • monitor and coordinate all online marketing, including affiliate and contextual advertising
  • oversee the creation and purchasing aspects of online advertising
  • track responses to contextual marketing
  • monitor effectiveness of contextual programs, and communicate with appropriate teams and individuals, such as PHP (hypertext preprocessor) or ASP (active server-pages) programmers, to improve contextual marketing software
Education and Skills

Most marketing managers have at least a bachelor’s degree—often in marketing, advertising, or business management— as well as substantial experience in online commerce. Education preparing them for this career includes classes in marketing, market research, computer science, and consumer behavior. Additionally, future marketing managers often pursue and complete internships while attending marketing school.

Market Research Analyst

What do they do?
  • gather data on customers’ interests, as well as information on how that data is affected by context (home vs. work, geographic location, etc.)
  • use statistical methods and software to gather data about click-thru and conversion for online ads
  • evaluate customers’ responses to contextual advertising, and make recommendations about how to fine-tune how the advertising is targeted
Education and Skills

Market research analysts need at least a bachelor’s degree in market research (or related field, such as statistics or computer science). They can start gaining experience by completing an internship while in school, and may gain additional experience in jobs which require collecting and analyzing data and writing reports.

Media Analyst

What do they do?
  • plan and design advertising according to which media channel(s) it’s being used in (i.e. print, video, or Internet advertising)
  • design and run tests to evaluate the performance of advertising
  • plan and/or optimize behavior and contextual marketing campaigns, based on feedback and statistical data gathered
Education and Skills

Media analysts need at least a bachelor’s degree in communications, or a related degree; as well as two years of experience using digital media. Other important skills and classes that will help you along this career track include visual communication, advertising, and computer science.

How can a marketing school help you succeed?

Our Recommended Schools

  1. Grand Canyon University (GCU)

    GCU's Colangelo College of Business offers leading edge degrees that address the demands of contemporary business environments.

  2. Southern New Hampshire University (SNHU)

    Explore the bond between business and consumer behavior with a degree in marketing.

Contextual marketing is a powerful tool for the correct placement of advertising. However, you still need to be able to create effective advertisements, and arrange for purchasing them. A marketing school has classes and programs to help you develop both skills.

Effective contextual marketing involves communicating to a targeted audience, but you waste that advantage if you do not know how to understand and appeal to that audience’s expectations. Classes in a marketing program will require you to practice and develop such skills, providing plenty of practice and feedback to alter and improve your message and delivery.

Marketing programs also teach you how to acquire good data so that you understand the decisions, perceptions, and responses of your customers. Such programs will train you in the methods of research, data collection, and statistical analysis that enable you to anticipate and respond to customers, and adjust your advertising to meet their needs.

So begin picturing yourself in a new context for your future. Request information from schools with degrees in marketing, and learn more about what a marketing school can do for you.