What Is Contextual Advertising and How Is it Changing TV?
Contextual targeting in TV advertising is gaining traction as a solution to privacy concerns and the limitations of traditional audience segment targeting, as TVREV Co-Founder and Lead Analyst Alan Wolk, Estrella MediaCo VP, Business Operations Christina Chung, and adtech expert C.J. Leonard of Mad Leo Consulting discuss in this clip from Streaming Media Connect 2024. Initially, streaming services targeted audiences based on demographics and purchase history, but this approach faced challenges. And it frequently risked jarring juxtapositions of ads that didn’t match the sentiment or gravity of the programming they accompanied, such as cheery dating app ads following tragic news reports. Contextual advertising aims to address that problem by effectively the advertising content into the content itself by interpreting the content to match it with relevant ads.
Making Ads More Relevant
Contextual targeting leverages metadata to align ads with relevant content, such as placing a pizza ad during a scene where characters order pizza. "It also means that if there's sports content on, these sorts of brands seem to go well with it, and that makes sense," says Wolk. "If there's a certain actor or performer that's on there, we have data that says people who like them also like these types of brands. So it's become much more based on the content and fitting in."
This method is particularly useful in environments like Connected TV (CTV) where cookies are absent. "Cookies aren't there," says Leonard. "So there's a bit of inference that has to happen there."
Contextual advertising, she explains, offers a way to achieve parity with linear TV advertising by using content IDs and other technological advancements to decode and transact against specific content. "When I was at Iris," she recalls, "we were working with the DSPs to make sure they were not only seeing it, but then able to extract it, and transact against it."
She goes on to say, "We had a Kevin Hart campaign that was running for Chase and any time Kevin Hart came up, Chase wanted to target that content. And coming from a world where people are geotargeting, and audience targeting, you get so limited. I was shocked when it was successful, because I'm the pragmatic ops person in these situations."
Privacy Concerns
Contextual targeting also addresses privacy issues by focusing on content rather than personal data, although regulatory uncertainties remain.
Generally, Wolk says, contextual advertising "is positioned as the antidote to privacy concerns, because rather than targeting specific people based on data about them and where they live and who they are, it's just like, 'Okay, here's this type of show and you'll reach the same audience more or less than if you use people."
Privacy is "something that we are very much aware of," Chung says. "And part of the reason why we haven't fully gone full force into things like contextual is because of exactly that. There are so many regulations right now where contextual is potentially a great thing for many, many different reasons. But it's also like, is the government going to shut down contextual signals? I was on a Google symposium specifically [focused on] privacy, and they were saying how that the government may not accept content signals that are coming from contextual signals. That's something that I'm not very familiar with, but it's something that, I need to be aware of, because if I'm going to be implementing new technology and in five years it's going to go away, I don't know if I have the resources for that. So I think from an operation standpoint, we need to be careful of what's actually going to happen with regulation and privacy."
Legacy Architecture
Legacy architecture also creates issues that can inhibit contextual advertising’s progress, according to Chung.
"For us, contextual is actually a really interesting topic for Australia," says Chung. "I find that we have a number of hurdles internally, whether we have things on-prem or if you have things in the digital ecosystem. And a lot of times these contextual signals are placed when the content is in the cloud where we have a lot of our content, and we also have to make sure that the linear channels are set up correctly and it's all through a master control, [which is] sometimes a very antiquated system. And sometimes, it's very difficult to add these additional constant signals for contextual targeting and layer it on top of some of these antiquated systems. So I think there's a challenge where we have in terms of getting publishers to the next level because we are still sitting on very old systems and we need some of these old systems because that's how we're operating today."
A New Way of Thinking About Buying Television
Leonard sees the opportunities with contextual as being particularly expansive when it comes to sports broadcasting vs. traditional television advertising. The approach is evolving, with innovations aimed at enhancing engagement and providing advertisers with more control, signaling a shift in how TV advertising is bought and sold.
"With sports, the optionality there is just so dramatic compared to saying, 'I just want to buy Seinfeld in the seven o'clock syndication slide on Channel 17 in Philadelphia.'" In this context, she continues, the granularity contextual offers opens up "a whole different way of thinking. We are going to have to change how we think about buying television. We have all of these options now and we have to look at these things differently. I'm working with a startup that's trying to create more engagement in the break and give advertisers more control in the break. We're just scratching the surface on the innovation that's to come."
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