AI in Contextual Advertising: Delivering Ads Based on Real-Time Situational Awareness

Authored by Chandan Sharma, General Manager- Digital Media, Adani Group

Imagine you’re waiting for your morning metro to reach your office, scrolling through a news website on your phone while reading an article related to sustainable living. As you go through the article, you come across an ad related to sustainable housing projects. At first, you thought it was a random ad, but then you realized it aligns perfectly with the article about a greener lifestyle. The ad feels almost perfectly timed, tailored to exactly what you’re looking at. That’s the magic of artificial intelligence (AI) in contextual advertising—delivering hyper-relevant, timely ads by tapping into real-time situational awareness.

Contextual advertising uses advanced technologies like AI to target ads. Contextual intelligence analyses a webpage's content, context, relevance, brand safety, and suitability to determine its fit. This helps brands understand consumer interests, automate processes, and make data-driven decisions confidently.

Contextual Advertising Explained

According to a report by Research and Markets, the global contextual advertising market size is expected to touch the US$335.1 billion mark by 2026. Contextual advertising allows brands to leverage one of the most crucial and impactful factors, i.e., context. With its AI capabilities, contextual advertising delivers ads on relevant websites to target the right audiences. Guess what, without the use of cookies.

It sounds normal, but trust me, in this age of cutthroat competition and strict CCDA/GDPR regulatory compliance, marketer’s lives are tough.

In contextual advertising, ads are displayed based on the content posted on the web page. It targets potential customers; such advertising type is repelled by context- web page content, location, or weather.

For instance, users reading a book review blog will come across ads related to book purchases, subscriptions to a Kindle, etc. All this is due to AI in contextual advertising.
Or if a user is reading an article related to fitness and exercise, then they might see ads for gym clothes and other fitness accessories on the web page.

All these are contextual advertising, providing an enriched user experience by displaying relevant ads.

Contextual Advertising: How It Works?

A contextual intelligence platform powered by Artificial Intelligence technology scans the available information on a web page, for instance, the food and kitchen items in a picture accompanying a recipe on a blog.
This information is then translated into actionable insights to target consumers.
The contextual intelligence platform then places contextually relevant ad units within the web page, aligning with the user's behaviour and the content they are consuming.

How AI Improves Contextual Advertising: Delivering Ads Based on Real-Time Situational Awareness

AI in contextual advertising leverages technologies like machine learning algorithms to predict customer responses and use the same information to display specific ads.

Delivering Ads Based on Real-Time Situational Awareness

AI not only looks at the content but also evaluates real-time factors influencing the relevance of ads. For instance:

Location: A user near a hotel might see ads related to staycation packages.
Relevance of Ads Based on Climate: AI might show ads for ice creams or shakes on a hot sunny day.
Ad Posting Timings: If it's late at night, the ads could be related to midnight cravings, while on a lazy Sunday afternoon, you might see ads related to movie packages, restaurants, etc.
Kind of Device: With AI, even ads are tailored based on the device. For instance, mobile users might see location-based promotions, while desktop users might be targeted with more in-depth offers.

Advantages of AI in Contextual Advertising

Along with generating meaningful user engagement, Contextual AI’s sophistication offers advertisers several unique benefits:

Improved Relevance and Engagement
Improved ROI
Personalization
Niche Targeting
Transparency
Enhanced User Experience
Boost Conversion Rates and Drive Revenue

The Future of AI in Contextual Advertising

AI-driven contextual advertising is a trend and a dynamic shift in the advertising landscape. Contextual advertising gives control to advertisers or ad publishers rather than the user, letting them emphasize the visitor's present behavior instead of what they have done in the past. Moreover, contextual advertising is far more economical and easily implemented, making it a great alternative for new and small businesses. It has increased the purchase intent by almost 70%, which pretty much seals the deal when finding ways to advertise online.

The future of AI in contextual advertising is quite promising. AI will enable brands to create highly targeted and effective campaigns that resonate deeply with users.

DISCLAIMER: The views expressed are solely of the author and Adgully.com does not necessarily subscribe to it.