Audience Based Targeting Vs Contextual Targeting: Which Is Better?

Two main types of targeting can be used when placing ads online: audience-based targeting and contextual-based targeting. Both have their advantages and disadvantages, so it's essential to understand the similarities and differences to choose the best option for your needs.

What is audience-based targeting?

Audience-based targeting involves targeting ads based on specific demographics, interests, or behaviors. This can be done through retargeting, which shows ads to people who have already visited your website or somehow engaged with your brand. The advantage of audience-based targeting is that you can reach a specific audience with your message. The downside is that it can be less effective than contextual targeting since not everyone in your target audience will see your ad.

Audience-based targeting mainly deals with dividing consumers into segments based on their interests or data within their demographic. However, campaigns often reach a very minimal percentage of their target audience and can often be found inaccurate. A new study shows that 30% of Facebook’s inferred interests are inaccurate or irrelevant . This is where audience-based targeting comes in. This type of targeting allows advertisers to efficiently use their ad budget as they are not required to waste their ad spend on audiences who will not exhibit a high return on investment (ROI).

Prices are increasing, but to what extent?

Advertisers can use contextual targeting to reach their target audience more effective when done correctly. By targeting ads based on the content being viewed, contextual targeting ensures that the ads are relevant to the person viewing them. In comparison to audience-based targeting, one study showcased that 45% of publishing executives saw no significant benefit from behavioral ads and 23% noticed a decline in revenue. This increases the chances that the person will click on the ad, which leads to more conversions for the advertiser.

Contextual targeting can be used with other targeting methods, such as demographic or behavioral targeting. Advertisers can use contextual targeting to reach their target audience more effectively and increase their ROI.

The Role of Contextual Targeting in Programmatic Buying

Programmatic buying is a form of advertising where automated software is used to purchase ad space in real-time. In fact, in 2021, the digital display ad market stood at almost $106 billion U.S. dollars and is projected to reach almost $142 billion by 2023. This form of advertising effectively boosts a brand's awareness across a wide range of demographics through ad exchanges and networks. Programmatic buying additionally maximizes the relevancy of ads for targeted audiences and improves ROAS (Return on ad spend).

Audience Based Targeting vs Contextual Targeting: Which Is Better?

So how does contextual targeting contribute to programmatic buying?

Contextual targeting allows advertisers to target ads based on the context of viewed content. For example, if someone is reading a travel article, contextual targeting would allow an advertiser to target that person with an ad for travel insurance. Contextual targeting can target ads on websites, mobile apps, and even video content.

Contextual targeting enable advertisers to spend less and receive a high volume of valuable impressions. Using contextual targeting in programmatic buying is quite efficient, considering marketers can easily adjust their campaigns concerning how their campaign performs.

Tips for audience-based targeting.

Utilize Google Analytics to find out the interests of your website visitors.

Google Analytics has implemented a section for their users to see what their visitors are interested in visually. Google Analytics can measure over 95% of visitors and uses machine learning algorithms to split audiences into categories as specific as travel, cooking, and music. Advertisers can now implement these interests into their marketing efforts to increase lead generation and sales based on these categories.

Take advantage of social media to attract your target audience.

Test out a few different types of content to discover which content engages well with your audience. Further, the content should be promoted on a platform on which most of your audience is present. If they are most active on Facebook, it would be helpful to create the most postings on that platform. Certain content works best on distinct platforms. For example, videos and curated content work best on Facebook. News and blogs work best on Twitter, and photos, quotes, and stories work best on Instagram.

Use A/B testing to test if your targeting campaigns are making an impact.

Well, what is A/B testing? It is an experiment that divides an audience into two groups, A and B, and both groups are involved in a test run of your campaign or content. After the testing is complete, advertisers are left with feedback that will aid them in improving or tweaking their marketing campaigns. Using A/B testing allows advertisers to confirm if their marketing efforts are reaching the target audience and whether or not their advertising techniques are effective.

While there are significant benefits to audience-based advertising, there are a few critical disadvantages that marketers should be aware of. For one, audience-based targeting can be very expensive. Facebook, for example, charges more for audience-based targeting than they do for standard demographics-based targeting. This is because marketers who target a more specific audience have to spend more to reach them. Whereas demographics are not targeting a specific group of people with specific interests, but characteristics of populations and subsets of these populations.

Another downside to audience-based targeting is that it can be challenging to track and measure the results of your campaigns. This is because you are targeting a group of people rather than a specific individual, so it can be hard to know how many people in your target audience saw or responded to your ads.

Finally, audience-based targeting can sometimes result in lower conversion rates than other types of targeting. This is because you may be reaching a larger audience with your ads, but not all of them will be interested in what you have to offer. Audience-based targeting can be a great way to reach your target market, but it's essential to be aware of the potential disadvantages before you dive in.

What is contextual targeting?

Contextual targeting involves placing ads on websites or in other contexts relevant to the products or services you offer. For example, if you sell sports equipment, you might place ads on websites about sports or fitness. The advantage of contextual targeting is that it can reach a broad audience interested in what you have to say. The downside is that it can be less targeted than audience-based targeting, so you might not reach your ideal customers. Unlike audience-based targeting, contextual targeting does not rely too heavily on personal information or third-party cookies. This advertising method is often preferable for companies that abide by GDPR regulations and other privacy regulation acts.

So how exactly does it work?

When a visitor visits a website, the content shown to the visitor is based on the page containing information that goes to the ad server, which matches with relevant ads for keywords and content.

Today, contextual targeting also uses first-party data to add contextual signals and further build product affinity scores for each URL. Advertisers can advertise on pages and products guaranteed to have the most impact. URL targeting is used in marketing initiatives when marketers want their ad to be displayed on specific pages, a single page, a narrow subset of pages, or hosts and paths. Contextual advertising can also be implemented with Youtube channels. By advertising a product/service on a relevant Youtube video channel, advertisers can target specific video channels with text, images, and rich media-based adverts.

Ultimately, the best option for you will depend on your specific needs and goals. If you're looking to reach a particular audience with your message, audience-based targeting is a good option. However, if you're looking to reach a wider audience with your message, contextual targeting may be a better option.

Tips for contextual targeting

Split up campaigns

It is important to note that the same ad groups should not be used for similar search ads. By doing this, you'll be able to reach a wider audience and save money on your search ads. Remember that demographics play a significant role in contextual targeting, so make sure you target your ads accordingly.

Ensure you are targeting the right audience

Conduct a narrowed-down, specific study of your target audience's internet usage habits. Advertisers can strategize when and where to run their ads using that data. When their target audience is most active online and likely to click on a specific site, it is crucial to do so.

Consider using cost-per-mile vs. cost-per-click

Cost-per-mile (CPM) is a technique that is useful when advertisers are looking to advertise on a specific website, webpage, or blog page. It is used to calculate the total ad spend per 1,000 impressions on a given website or specific page. As the title implies, the marketer pays for every thousand impressions of their ad on the given network. This method is, in fact, cheaper and is often the preferred method for advertisers. It also allows advertisers to increase brand awareness to larger audiences and simultaneously generates visibility on a company's products/services.

One of the critical disadvantages of contextual targeting relies heavily on demographics. This can be a problem because demographics can change rapidly, and what was once a reliable target may no longer be relevant.

Another disadvantage of contextual targeting is that it can be less effective than other methods. This is because it relies on the context of the user's search, which may not always be accurate. Contextual targeting can also be more expensive than other methods, as it requires more data to be collected and a more significant amount of analysis to be performed.

How to use AdSkate for contextual targeting?

AdSkate enables marketers and brands to study relevant contextual targeting data in a privacy-first world. AdSkate platform is driven by AI and machine learning to provide relevant brand safety, sentiment analysis, and categorization data.

Increase audience engagement by discovering relevant media to advertise on. AdSkate's data helps an advertising agency reduce their campaign spend by 36%

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