Contextual Advertising

By Jason Menayan August 25th, 2008

What contextual advertising is, a description of the most popular networks, and how it compares to more traditional forms of Internet advertising.

Contextual advertising uses the topical context of a page in order to match the most appropriate ads to serve onto a page. A contextual advertising network will spider a page, gathering information about what the topic of the page is, and then serve up ads that match that same context. A page on how to groom your pet, for example, might serve up contextual ads on dog grooming supplies, while another page on the same site on makeup application tips, might serve up ads on beauty supplies or beautician schools.

How does it work? The contextual ad service sends a page crawler (a “spider”) to scan each page and determine what it’s about, usually by the prevalence and density of keywords in the page (although companies touting technologies that determine “word shape” and semantics promise more accurate, relevant matching). Then, the topic of the page is matched up against existing advertiser inventory with a high degree of contextual relevance to the page, and the ad is served on the page.

What are your contextual advertising options?

Google AdSense is, by far, the largest contextual ad network. Its enormous and highly diversified pool of advertisers ensures both breadth of coverage and relatively high bids (and payouts to publishers). However, both Yahoo and Microsoft have contextual advertising networks that are making headway into Google’s publisher base; in fact, in many instances YPN outperforms AdSense.

Here is a list of popular contextual advertising networks:

You can read more information on the first six contextual ad networks and the final two semantic ad networks.

How does contextual advertising shape up against display/banner advertising

On high-traffic niche or brand sites and blogs, premium ad inventory is typically served through a vertically-oriented ad network, which is subject to caps or placement requirements, while remnant inventory is filled using contextual ad networks such as Google AdSense or YPN. This is due to the fact that blogs typically source a great deal of their traffic from regular readers, who can be profiled demographically and geographically in order to pair with niche ad networks. (Our list of the most popular blog ad networks)

However, on topically-diverse content sites such as HubPages or About.com, contextual ad networks dominate, since the majority of traffic is sourced through search engines and the only thing binding visitors is their interest in the topic of the page.

In terms of earning: both types of ad networks vary in the ranges of CPMs they can deliver to publishers.

For niche, premium blog ad networks, for example, $5-30 CPMs are not uncommon, while premium publishers (such as newspapers, A-list bloggers) can command CPMs closer to $100. Blogs not accepted into more exclusive ad networks can expect to earn in the $1-5 CPM range for display/banner ads.
For contextual ad networks, the topic and quality of traffic are the biggest modifiers of CPM. Finance, business and legal topics tend to earn more, while entertainment, celebrities and photos tend to earn the least. Traffic sourced from search engines tends to earn the most, since visitors are keenly interested in searching, while regular, routine visitors tend to be the worst-clicking bunch. All said, CPMs can range, on a site like HubPages, from $0.50 to $50.

This entry was posted on Monday, August 25th, 2008 at 5:19 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.