Contextual advertising is a form of targeted advertising

Targeted advertising

Targeted advertising is a type of advertising whereby advertisements are placed so as to reach consumers based on various traits such as demographics, purchase history, or observed behavior....

 for advertisements appearing on websites or other media, such as content displayed in mobile browsers. The advertisements themselves are selected and served by automated systems based on the content displayed to the user.

How contextual advertising works

A contextual advertising system scans the text of a website for keywords

Keywords

Keywords are the words that are used to reveal the internal structure of an author's reasoning. While they are used primarily for rhetoric, they are also used in a strictly grammatical sense for structural composition, reasoning, and comprehension...

 and returns advertisements to the webpage based on what the user is viewing. The advertisements may be displayed on the webpage or as pop-up ads. For example, if the user is viewing a website pertaining to sports and that website uses contextual advertising, the user may see advertisements for sports-related companies, such as memorabilia dealers or ticket sellers. Contextual advertising is also used by search engines to display advertisements on their search results pages based on the keywords in the user's query.

Contextual advertising is a form of targeted advertising in which the content of an ad is in direct correlation to the content of the web page the user is viewing. For example, if you are visiting a website concerning travelling in Europe and see an ad pops up offering a special price on a flight to Italy, that’s contextual advertising. Contextual advertising is also called “In-Text” advertising or “In-Context” technology..

Apart from that when a visitor doesn't click on the ad in a go through time (a minimum time a user must click on the ad) the ad is automatically changed to next relevant ad showing the option below of going back to the previous ad.

Service providers

Google AdSense

AdSense

Google AdSense which is a program run by Google Inc. allows publishers in the Google Network of content sites to automatically serve text, image, video, and rich media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they...

 was the first major contextual advertising network

Advertising network

An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand...

. It works by providing webmasters with JavaScript

JavaScript

JavaScript is a prototype-based scripting language that is dynamic, weakly typed and has first-class functions. It is a multi-paradigm language, supporting object-oriented, imperative, and functional programming styles....

 code that, when inserted into webpages, displays relevant advertisements from the Google inventory of advertisers. The relevance is calculated by a separate Google bot

Bot

Bot or BOT may refer to:-Computing:* Bot, another also name for a Web crawler* Bots , an open-source EDI software* BOTS, a computer game* Internet bot, a computer program that does automated tasks...

, Mediabot

Mediabot

Mediabot is the name given to the web crawler that Google uses to crawl webpages for purposes of analysing the content so Google AdSense can serve contextually relevant advertising to the page....

, that indexes the content of a webpage. Recent technology/service providers have emerged with more sophisticated systems that use language-independent proximity pattern matching algorithm to increase matching accuracy.

Since the advent of AdSense, Yahoo! Publisher Network

Yahoo! Publisher Network

The Yahoo! Publisher Network was an advertising network launched on August 2, 2005 by Yahoo! and effectively closed on April 30, 2010. The service only accepted US-Based publishers...

, Microsoft adCenter

Microsoft adCenter

Microsoft adCenter , is the division of the Microsoft Network responsible for MSN's advertising services. Microsoft adCenter provides pay per click advertisements. This is a service aimed at people who want to advertise a product...

, Advertising.com

Advertising.com

Advertising.com is an online advertising company based in the United States. Established in 1998 asTrade Key with the name TeknoSurf.com, by Scott and John Ferber, it was renamed Advertising.com in January 2000...

 Sponsored Listings (formerly Quigo) and others have been gearing up to make similar offerings.

Impact

Contextual advertising has made a major impact on earnings of many websites. Because the advertisements are more targeted, they are more likely to be clicked, thus generating revenue for the owner of the website (and the server of the advertisement). A large part of Google's earnings is from its share of the contextual advertisements served on the millions of webpages running the AdSense program.

Contextual advertising has attracted some controversy through the use of techniques such as third-party hyperlinking, where a third-party installs software onto a user's computer that interacts with the web browser

Web browser

A web browser is a software application for retrieving, presenting, and traversing information resources on the World Wide Web. An information resource is identified by a Uniform Resource Identifier and may be a web page, image, video, or other piece of content...

. Keywords on a webpage are displayed as hyperlinks that lead to advertisers.

Agency roles

There are several advertising agencies that help brands understand how contextual advertising options affect their advertising plans. There are three main components to online advertising:

1. creation — what the advertisement looks like
2. media planning — where the advertisements are to be run
3. media buying — how the advertisements are paid for

Contextual advertising replaces the media planning component. Instead of humans choosing placement options, that function is replaced with computers facilitating the placement across thousands of websites.

See also

• Advertising Network
  Advertising network
  An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand...
  
  
• Editorial-related advertising
  Editorial Related Advertising
  Editorial Related Advertising is associated with the concept of Contextual Advertising but differs in its ability to match advertising to content in a much more specific manner...
  
  
• In-text advertising
  In-text advertising
  In-text advertising is a form of contextual advertising where specific keywords within the text of a web-page are matched with advertising and/or related information units.-Description:...
  
  
• In-image advertising
  In-image advertising
  In-Image advertising is a form of contextual advertising where specific images on a website are matched with related advertisements.- Description :...
  
  
• Semantic targeting
  Semantic targeting
  Semantic targeting is a technique enabling the delivery of targeted advertising for advertisements appearing on websites and is used by online publishers and advertisers to increase the effectiveness of their campaigns...