Why a cookieless world marks the return of contextual advertising

Contextual advertising was all the rage a few years ago but has somewhat taken a backseat more recently. However, it’s making a steady return, buffeted by the winds of change of new technologies and an evolving business landscape. The reasons for this are twofold, which we will cover in two articles, and being a contrarian will start with how contextual advertising is helping the advertising ecosystem get future-ready for a world without cookies.

As a quick refresher, contextual advertising more or less means showing consumers ads in context to what they were browsing for, taking into account keywords they were typing, sites they were visiting, etc.

And with the imminent crumbling of the cookie, advertisers won’t have access to any trail left behind by us Hansels and Gretels still navigating the murky depths of the web.  

Preetham Venkky, Chief Digital Officer at DDB Mudra Group, points to the good old days when you created content in order to drive users down the funnel across the behaviour pattern. “Obviously, going cookieless means that you're not able to track the data anymore and you're not able to see what the users’ behaviour has been in the recent past. This means that then you go up the funnel a little bit; behaviour is at the bottom, and you just go one step up. And so now the bottom of that conversion transaction becomes contextual content. Now contextual was kind of out of flavour, because it doesn't scale beyond a particular point in time.”

That has now changed with the emergence of new technologies, like AI and ML (more on that in the next article). From the early days of Google, we have seen keyword-based contextual advertising. Every time you hit the search bar, an ad for a relevant product or service pops up and that’s keyword-based contextual ads. We have seen how keyword-based search ads have evolved to reach their current sophistication. 

Oindrila Roy, Managing Director, Publicis Worldwide India, says, “As the world of cookies evolved, personalisation started playing a key role. It taps into user browsing behaviour, interactions with other ads and user preferences. Personally, I think Instagram has really cracked this one with finesse. And I say that because I see ads for clothes only in colours and fabrics I like to wear.”

“Over the years, contextual advertising has become a lot more advanced. A lot of credit for that goes to technologies such as AI and NLP that have enabled semantic-based contextual advertising. This has moved advertisers to tap into environments that not only have seemingly relevant content but also take into account the context for greater relevance,” she says.

Basically, instead of a website for childcare, even a blog or an article that addresses soon-to-be moms or new moms becomes a relevant environment for baby products.

Nupur Shah - VP and Digital Lead, West and South, PHD India agrees the landscape of digital advertising is seeing a shift with the slow demise of third-party cookies. “This shift takes us back to the early days of digital marketing and marks the comeback of contextual targeting. After all, with the plug being pulled on cookies, if a brand does not have its own first-party data, we have to resort to the next best thing to target in-market consumers. And the next best thing is using contextual advertising to understand the context in which consumers engage with content in order to deliver ads that align seamlessly with their interests and needs.”

As lawmakers become more stringent about privacy laws, a cookieless future is standing at our doorstep. As Roy notes, “On August 11th, 2023, India’s GDPR equivalent, the DPDP (Digital Personal Data Protection) act received the presidential nod. So, I guess, its implementation is now just a matter of time. With the implementation of DPDP, consent will become even more critical for tracking online behaviour, further restricting the use of third-party cookies which are used to track browsing behaviour to serve relevant ads. In this scenario, contextual advertising will gain even more prominence as context is bound to gain more importance.”

Karan Anand, SVP – Strategy, Interactive Avenues (the digital arm of IPG Mediabrands India), believes that contextual advertising will also play a pivotal role due to its privacy-conscious approach, as instead of relying on user data, it centres on the context of content, ensuring relevant targeting while staying compliant with privacy regulations. "Advancements in natural language processing further enhance ad personalization, making ads more contextually relevant. Google's topic-based approach, which leverages a user's browsing history to determine interests and display relevant messaging, aligns with this contextuality."

Anand observes that the applications of contextual advertising will expand across various digital channels, including content-rich websites, social media, e-commerce platforms, and mobile apps, all while respecting user privacy. "It seamlessly adapts to the content and context of different digital environments, from news sites to video platforms, and even emerging technologies like AR and VR. This adaptability positions it as a vital strategy in the ever-evolving digital advertising landscape."

As the industry shifts away from third-party cookies and retargeting campaigns, it's clear that these methods will lose a lot of their effectiveness.

“This means we need to come up with new strategies, and this is where contextual advertising comes in. It works because it's based on the environment in which the ad is placed, not just the user's data. This means it's not just more respectful of the user's privacy, but it's also a better way to reach an audience that's becoming more and more conscious of their online privacy,” says Keerthi Kumar.R, Business Head- South, FoxyMoron (Zoo Media)

He adds, “In the future, I think we'll see a lot more contextual advertising on content-heavy platforms like news, blogs, forums, and streaming services. It's all about making the interaction with the user smoother and less intrusive. In an era where consumer attention is split and trust is low, contextual advertising could be the new gold standard.”