Contextual Targeting Is The Key To CTV And OTT Advertising

It’s no secret that the future of digital advertising is cookieless and shifting to contextual advertising.

Several big players have implemented important data and privacy policy changes that directly impact the ability of advertisers to reach their target audience through behavioral methods. Apple’s ID for Advertisers (IDFA) iOS update and Google Chrome’s “Privacy Sandbox,” are both working to protect users’ data and privacy. Chrome specifically will no longer support third-party cookies in 2023.

What does that mean for advertisers? Well, there’s about to be a massive gap in accurate and effective digital advertising through these behavioral targeting methods. Enter contextual advertising, which not only fills that gap for online advertising but is able to expand into Connected TV (CTV) and Over-The-Top (OTT) spaces for data-driven, effective marketing results for video, audio, and text content. User privacy and data will soon be less accessible and it’s time to pivot. Advertisers should begin shifting their digital marketing strategy to find solutions with contextual marketing, instead of dying behavioral targeting methods.

WHAT IS CONTEXTUAL ADVERTISING?

Contextual advertising uses content to appropriately and specifically place ads based on context. It doesn’t rely on cookies, which is a behavioral-based approach to marketing. Instead, contextual advertising aligns content and, importantly, context to deliver relevant ads at the right time to a target audience.

CONTEXTUAL ADVERTISING FOR CTV AND OTT

CTV is short for Connected TV and refers to streaming content on TVs, mobile devices, gaming devices, and apps. Sling TV, Roku, Direct TV OnDemand, and PlayStation are all examples of CTV.

OTT is short for Over-The-Top services, which skirts TV providers and streams on-demand from any device through an app. This can be paired with CTV, like watching Netflix on your smart TV, but through the lens of advertising, the two are different in how you approach ad placement.

Until now, CTV and OTT advertising has relied on IP addresses to deliver relevant ads. This is similar to using cookies, in that the systems track user behavior and place ads based on what the user is literally clicking on and, in the case of CTV and OTT, watching.

Contextual advertising protects the privacy of IP addresses by placing ads based on video content. With this strategy, brands can more accurately meet the target audience where they’re at by the video content they’re consuming.

For example, your brand wants to reach 25-34-year-old women with children consuming a specific type of video content that aligns with their brand. When done right, contextual advertising solutions provide a specific list of content, such as TV shows and online videos, to meet the ideal customers at the right place and time.

This is done by understanding the content and context of each video, ensuring that they match the advertiser’s target audience and goals. Going back to our example of the target audience of women age 25-34, let’s say the advertiser is looking to align with vegan video content. Combining contextual advertising with sentiment analysis ensures that a client’s pro-vegan ad isn’t placed alongside a documentary discrediting a vegan diet.

But what about IP addresses? Unfortunately, the future of using IP addresses for targeted advertising is unclear. Google Chrome’s Privacy Sandbox includes a proposal, Gnatcatcher, that would mask IP addresses to protect privacy. We understand advertisers are looking for a precise, data-supported strategy to authentically connect with their target audience. Contextual advertising offers that solution without relying on IP addresses.

THE RISE OF CTV AND OTT

The global pandemic pulled the pin on an explosion of growth in CTV and OTT spaces. With an unprecedented number of people staying close to home and streaming or connecting virtually, advertisers have shifted their strategy to connect with their audiences in these digital spaces.

Data from the Interactive Advertising Bureau (IAB) shows that more than 70 million homes in the US stream CTV video. In fact, according to an eMarketer Q2 2021 Digital Video Trends Report, adults in the US will spend about 2.5 hours viewing digital video every day. That’s an increase of 9 minutes from last year. Further data from IAB reports that over half of ad buyers are shifting their budget from broadcast (53%) and cable (52%) and reallocating to CTV.

The research confirms what we already know, what we’ve been living since the COVID pandemic started: more people than ever are using streaming devices and apps to consume video.

The real challenge lies in reaching your target audience during their CTV and OTT video experience. Advertising in CTV and OTT is more nuanced than linear TV and that’s where contextual advertising triumphs. Just as the TV landscape has changed, contextual advertising is the up-and-coming strategy offering a data-backed solution to traditional IP address targeting. By identifying relevant video content that resonates with your target audience, contextual advertising respects your audience’s privacy while reaching them through more granular, and effective, ad placements in CTV and OTT spaces

YOUR CONTEXTUAL ADVERTISING SOLUTION

Ultimately, the future of digital marketing is in contextual advertising, especially in the CTV and OTT spaces. New content is being created every minute – videos, shows, social media, blogs, and that just to name a few. The ability of software to understand the context of the seemingly endless collection of online content and turn it into a clear roadmap for marketing is the future of advertising. And it’s already being done.

AdSkate’s contextual targeting solution creates that roadmap. It enables advertisers and brands to reach their audience with hyper-specific videos or web domains based on the campaign criteria. The system uses its proprietary artificial intelligence program to understand the context of digital content, aligning it with the brand’s target audience data to produce significant results. Reach out with questions or more information on how your brand can find success with contextual advertising.

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Frequently Asked Questions (FAQs) About Contextual Advertising and the Cookieless Future

What is contextual advertising?

Contextual advertising is a privacy-first advertising method that places ads based on the content of the page, video, or app rather than user behavior or personal data. It uses context, such as keywords, topics, and sentiment, to match ads with relevant content in real time.

How is contextual advertising different from behavioral advertising?

Behavioral advertising relies on user data like browsing history and cookies to target individuals. Contextual advertising, on the other hand, does not require tracking users across the web. Instead, it analyzes the content being viewed and serves ads that align with that content, ensuring relevance without compromising privacy.

Why is contextual advertising important in a cookieless world?

As third-party cookies are being phased out by browsers like Google Chrome, advertisers can no longer rely on behavioral data to target users. Contextual advertising provides an effective alternative that respects user privacy while still delivering relevant and timely ad placements.

How does contextual advertising work in CTV and OTT environments?

In Connected TV (CTV) and Over-The-Top (OTT) platforms, contextual advertising analyzes the video content itself to determine where and when to serve ads. This ensures ads are placed in relevant and brand-safe environments without relying on IP addresses or tracking user behavior.

Can contextual advertising deliver the same results as behavioral targeting?

Yes, and in many cases, it can outperform behavioral targeting, especially when combined with AI-powered content analysis and sentiment detection. Contextual ads are more likely to be seen as relevant and non-intrusive by viewers, which can lead to higher engagement rates.

Is it possible to target specific demographics using contextual advertising?

While contextual advertising doesn’t directly use demographic data, it allows advertisers to target content that appeals to specific audience segments. For example, advertisers can place ads alongside family-focused or wellness-related content to reach women aged 25–34 with children.

What platforms support contextual advertising for CTV and OTT?

Many CTV and OTT platforms, such as Roku, Sling TV, and Hulu, offer opportunities for contextual targeting. AdSkate’s contextual intelligence can help identify and recommend the best video environments across platforms based on your audience and campaign goals.

How does AdSkate support contextual advertising?

AdSkate uses advanced AI to analyze and understand digital content across video, audio, and text. It builds contextual targeting strategies that align ad placements with relevant content, driving performance while adhering to privacy regulations. Our platform provides data-driven insights and content recommendations to maximize ROI without relying on third-party cookies or IP tracking.