Mobile Contextual Advertising: The Future of the Privacy Era?

Contextual advertising is nothing new. Marketers have been using this technique since the early stages of digital marketing.

But, lately, it has been experiencing a renaissance.

The reason(s)?

A growing user concern about data tracking, privacy laws, and the industry’s response to these developments. Because of all this, mobile contextual advertising will be one of the biggest mobile marketing trends in 2023.

In this article, we’ll go over everything a mobile marketer should know about mobile contextual advertising.

But first, let’s get the basics straight.

What is Contextual Advertising?

context

Contextual advertising is the practice of targeting ads based on the content the users are currently viewing. In this process, the algorithms match an ad to relevant content in a mobile app or a website.

Let’s put it this way.

A crypto app can target users by placing ads in finance apps, while a fashion-themed mobile game might do the same in fashion news apps. In the same spirit, match-3 game advertisers can place their ads in other puzzle games.

The logic behind this is pretty simple — it just makes sense.

Users who are already fans of something related to your app are more likely to download it than random users.

Behavioral vs. Contextual Advertising

To really understand contextual advertising, you need to know how it differs from mobile marketers’ favorite — behavioral advertising.

Marketers use behavioral advertising to track users’ activities in other apps and serve personalized ads based on their browsing history.

behavioral vs mobile contextual advertising

Here’s a list of the key attributes that separate behavioral advertising from its contextual counterpart:

  • Relies on tracking mechanisms to collect user data (IDFA, GAID)
  • Used to target smaller user groups who have very specific interests
  • Very accurate because marketers have data on the users’ interests
  • Typically raises significant privacy concerns
  • On iOS, it completely depends on the user’s consent (App Tracking Transparency)

On the other hand, mobile contextual advertising relies on different, privacy-compliant strategies:

  • Relies on app metadata and other types of contextual data to display relevant ads
  • Far more private than behavioral targeting
  • Effective for broad targeting of larger groups of users with common interests
  • Less precise because it is based on conclusions
  • No need to ask users for any kind of consent

Behavioral vs. Contextual In Practice

Let’s say a user views an Adidas T-shirt on their phone. With behavioral targeting, marketers can track down the user and show them ads for this item everywhere  — from social media apps to their favorite gaming app.

Why?

Behavioral ads are about the user, not about the place they appear in.

To be honest, people are quite fed up with ads “haunting” them wherever they go. For this reason, when asked for data tracking consent, most iOS users deny access (54% of them, according to Statista).

And as you know, without tracking consent from the user (on iOS), behavioral targeting isn’t possible.

Enters contextual targeting.

This type of targeting is all about the context in which the ad appears. In this case, the Adidas T-shirt ad would appear in relevant environments only. For example, in a fitness, sports, or clothing shopping app.

The Context of Data Privacy

Data Privacy

Contextual advertising has been in the shadows of behavioral advertising for years. We don’t blame marketers for this — one is simply more effective than the other.

However, as advertisers started looking for data privacy workarounds, contextual advertising rose back to its former fame.

This is not only about IDFA being off the table.

Google has also announced its own privacy framework, and popular browsers are planning to “kill” third-party cookies. Because of all this, advertisers know that they can’t continue to rely on behavioral advertising.

Instead, they are looking for ways to get the most out of the data they already have, and contextual advertising is one of the best ways to achieve this.

Contextual Advertising: Top Statistics

Prediction of contextual ad spending worldwide from 2020 to 2027

Prediction of contextual ad spending worldwide from 2020 to 2027. Source: Statista

b Are you curious about the size and scope of contextual advertising? Or about how people react to this type of marketing?

To answer this and more, we’re listing four statistics all marketers should be aware of.

  • In 2021, contextual advertising spending was estimated at $178.3 billion. By 2027, it is expected to more than double, reaching $376.2 billion (Statista)
  • 79% of people prefer to see contextual ads over behavioral ads (GumGum)
  • Mobile ads are 23% more memorable when they match the surrounding content (Integral Ad Science)
  • Contextual advertising is the most popular strategy marketers use to fight the loss of third-party cookies and device identifiers. It is used by 74% of marketers, which makes it more popular than first-party data at 60% (IAB)

Mobile Contextual Advertising

Back in the day, contextual advertising was pretty straightforward.

Advertisers would pick out certain topics their audience should be interested in. Then, they would rely on Google or some other ad network to place ads on websites related to these topics.

For example, a protein shop marketer might place ads on websites related to fitness, exercise, and weight loss.

Today, this is still the basis of contextual advertising.

But there are a lot more factors to it, especially on mobile. Modern mobile contextual advertising comes with an array of targeting possibilities.

Contextual Advertising for Mobile Apps

mobile contextual advertising for apps

In mobile contextual advertising, the context is determined by many different signals. This includes the following:

  • Wi-Fi date
  • Ad network’s bid and price data
  • Approximate location
  • Device specifics (brand, version, OS, battery level, keyboard language)
  • App metadata (app category, app version, etc.)
  • Publisher data

The great thing about mobile contextual advertising is that it works on many data pieces from privacy-safe sources. Thanks to all these signals, mobile contextual advertising has decent targeting options.

You might think that. compared to behavioral data, rough location, WiFi data, or device data are useless.

But, that’s not true.

Thanks to WiFi data, you can figure out if users are at home, at work, or on the move. By knowing their rough location you can target them based on weather data, local events, etc. Moreover, based on the device they use, you can assess their socioeconomic status.

Ultimately, you can use all this data to create relevant ads and deliver them to the user at the right moment.

Top 5 Benefits of Mobile Contextual Advertising

Now that you have a solid understanding of what mobile contextual advertising is, let’s sum up its main benefits. These are our top five:

  1. Better TTR (tap-through rates)
  2. Cost-effectiveness
  3. User privacy protection
  4. Fighting ad blindness (subconsciously ignoring ads)
  5. Fighting ad fatigue

Tips for Effective Mobile Contextual Advertising

If you would like to get started with contextual advertising, here are a couple of steps you should follow to get the best results.

1. Start Broad, Narrow Down

When launching a contextual advertising campaign, you’ll first need to pick out the topics you believe are relevant to your audience.

This is usually something as broad as “beauty & fitness” or “music & audio”.

Example of contextual advertising on YouTubeExample of contextual advertising on YouTube. Source: Google Ads Help

After determining this, the ad networks will let you narrow it down. For example, the topics we mentioned above could be specified as “makeup” and “rock music”. Before picking out the subtopics, make sure you have a great understanding of your target audience.

On some ad networks, contextual advertising is based on keywords (e.g. Google). This allows you to target even more precisely.

Google recommends using at least five and no more than 50 keywords. Equally important, you should determine negative keywords to make sure your ads don’t appear on irrelevant searches.

2. Narrow Down Further With In-App Signals

Mobile contextual targeting should never be based on wild guessing.

Not when you have all this data just waiting to be used.

As we mentioned before, contextual advertisers have different in-app signals at their disposal. But, a lot of them are not sure how they can capitalize on this. Here are some tips on how to utilize these signals:

  • Focus on the app category your target audience uses most (e.g. gaming or music apps)
  • For more granularity, concentrate on subcategories (e.g. game genres)
  • Analyze how different audiences engage with different subcategories, publishers, and their apps (e.g. Gen Z vs. Millennials)
  • Focus on high-quality apps by looking into signals like rankings, downloads, and user reviews

3. Use Different Ad Types

We’re sure you have some favorite ad types. But, when starting with contextual advertising, make sure you use more than one ad format.

If not, you might end up limiting your campaigns.

By using different types of ads in contextual advertising campaigns, you have a better chance of connecting with the right user at the right time.

Some of the most popular ad types in mobile contextual advertising are video ads, rewarded video ads, playable banners, and native ads.

4. Optimize As Usual

Just like any type of advertising campaign, contextual campaigns also require optimization.

Once you launch your campaign, monitor the data, track the KPIs, and make necessary adjustments for better performance.

For example, by removing the worst-performing apps and websites and focusing on the best-performing ones.

Mobile Contextual Advertising: Summing It up

No, mobile contextual advertising is not a perfect technique.

But, given the circumstances, currently, it is one of the best alternatives to behavioral advertising, and one of the trends from 2022 to become even bigger in 2023.

Because of this, more and more mobile ad networks are starting to provide contextual advertising solutions. TikTok, for example, did not have one until May 2022, when it introduced it.

What are your thoughts on all this? Are you using contextual targeting for app advertising? Leave us a comment and let us know!

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