CONTEXTUAL ADVERTISING:

in association with in association with 02 Contextual Targeting: The New Frontier

Welcome to Contextual 2.0

Contextual targeting, where ads online are targeted to people based on the context of what they’re looking at on page, is looking not just appealing but also safer. Triggered not only by the European privacy law In the beginning, there were only This was the beginning of the online And all the while technology has GDPR but also increasing privacy two types of targeting: demographic advertising industry’s obsession with been advancing, reaching the point concerns due to behavioral tracking and contextual. Reader surveys told audience, and the corresponding now where we no longer have to rely you what sort of people, on average, diminution of the importance of on tagging to convey the content globally, a soaring demand for consumed a particular media property, context. Behavioral targeting was of a page, but can ask machines to personalized marketing strategies and context did the rest. Cars were progressively automated and online categorize it according to factors such and the rise of mobile usage, advertised on the motoring pages, advertising became programmatically as sentiment, tone-of-voice, reading holidays in travel sections, and sales traded based on the attributes of each age and so on. contextual advertising is making next to the news. individual visitor to a page, rather a resurgence. And long gone are than the content of the page they So, this report looks at the current the days when contextual The internet changed all that. Being were visiting. state of contextual advertising targeting was based on a able to track where people had been to understand how it’s seen by online at a site, network or even - But now the industry finds itself at a advertisers and agencies. We look at simplistic reliance on a single briefly - ISP level created behavioural turning point. The EU’s General Data how they’re using it in the targeting keyword. With advances in computer targeting, allowing brands to advertise Protection Regulation, which came into mix and why. And we look at how vision, it’s now possible to decipher out of context by assuming that the force on 25 May, is the latest and most emerging technologies, such as the visual content of a publisher’s interest that had taken someone to a significant piece of legislation to make computer vision and semantic analysis, car page persisted when they started tracking internet users via cookies are changing how they might use it in page. Contextual targeting is the reading about travel. Publishers won more difficult, and therefore hamper the future. And let us put it out there only targeting left. because they could sell previously audience-based targeting. There are – this is no mission to Mars. It is an unpopular inventory. Advertisers won also concerns that the programmatic exciting prospect, and it is very much because that previously unpopular pursuit of audiences at the lowest for real. inventory was still cheaper than the possible cost is annoying customers prime, contextually relevant stuff. and compromising brand value and trust. in association with 04 Contextual Targeting: The New Frontier 25% 37% USA UK Respondents not using targeting in their online Methodology advertising

This report is based on a survey of 116 senior executives in the UK and US with responsibility for digital advertising within their company, carried out in June 2018 by YouGov. Most Precisely targeted advertising was one However, it was clear that for most firms, Most popular of the early promises of the commercial targeting is cumulative. In both the popular The Drum would also like to thank the following targeting internet, and it’s always tempting to think US and the UK, roughly two thirds of targeting for their contribution to the report. types in that everyone is using all the advantages respondents (61% and 65% respectively) types in the US the internet has to offer. However, said that they wouldn’t consider using the UK 49% targeting is an area where businesses contextual targeting on its own in the IN THE UK: IN THE US: Contextual still seem to be lagging behind future. The research also showed that targeting the capabilities of technology. Our 28% of respondents use contextual Jean-Paul Edwards, Cheryl Huckabay, research found that 37% of UK business targeting all the time, 40% use it often 46% strategy and product principal, respondents and 25% of those from the and 25% sometimes use it. US were not using any targeting in their development director The Richards Group demographic online advertising. This was borne out by the agency experts EMEA, we spoke to. They agreed that, although OMD Terrance Nixon, 46% demographic We also found that US companies are the industry emphasis in the past few media supervisor, noticeably more likely to target their years has been on audiences, contextual Alexis Faulkner, SapientRazorfish ads, and that the popularity of different has never gone away. head of FAST UK, types of targeting varies between the Mindshare David L Smith, 44% two countries. Contextual targeting was Rather, it has been used as another layer 32% CEO and founder, the most widely used form in the US, of targeting, as Mediasmith founder and geo-location Contextual Hannah Lury, Mediasmith being carried out by almost half (49%) of CEO David L Smith explained: “This is not respondents, followed by demographic a return of contextual targeting, it’s targeting head of comms, (46%), geo-location (44%) and behavioral a reminder. The new tools enable us strategy and media, (25%). Demographic targeting is most to do that overlay, and we’re reminded Three UK popular in the UK, being used by 36% why contextual was a good idea.” of respondents, followed by contextual 25% (32%), and geo-location and behavioral 29% 29% (both 29%). behavioral geo-location behavioral in association with 06 Contextual Targeting: The New Frontier The rebirth The of quality So what does contextual add to the targeting mix? We investigated what advertisers think contextual targeting rise delivers by asking respondents to score Our agency experts identified another benefit “Measurements like click-through rate are its performance on a scale of one to ten for that contextual delivers; it’s ability to deliver actually going up when contextual targeting a number of attributes. quality outcomes. Faulkner at Fast UK is overlaid. Users feel it and they see it, and it summed it up: feels natural to them and it triggers a level of On both sides of the Atlantic the technique’s trust in relation to the brand that they actually to main virtue was seen as its ability to increase “The industry has gone down the audience know who they’re talking to versus someone the relevance of advertising. Respondents targeting route in the past few years, but casting out a wide net and hoping to capture from both the UK and the US were most while we still think audience targeting is somebody’s interest. The brand knows what impressed with contextual targeting’s ability really important, as an industry we’ve almost you’re interested in, and they’ve made the the to increase the relevance of advertising. Both forgotten about quality. At Mindshare, effort to align themselves there for you, which also gave second place to its ability to improve we believe quality outcomes are often is a better approach.” the user experience. Then views diverged, US associated with quality media, and we respondents being noticeably more impressed regularly see that curated content with with the way contextual targeting improves longer dwell-time on page drives better top campaign planning and brand perception than brand recognition and consumer positivity.” their UK counterparts. But what’s interesting is that increasing relevance was the only aspect This view is echoed by Terrance Nixon, media CONTENT LOG of contextual targeting that really stirred supervisor at digital agency SapientRazorfish FAULKNER, FAST UK the enthusiasm of our respondents, with an in Chicago. “Advertisers are limiting the average of 44% rating it 8, 9 or 10 out of 10. amounts of impressions they’re serving on _ We believe quality outcomes Only a third gave a high rating to its ability the open web, and opting for more premium are often associated with to improve the user experience. and more high-quality content. That means deeper learnings about the consumers to quality media, and we guarantee that this audience is who they’re regularly see that curated actually looking for. Then, on the flip side, content with longer dwell- 44% the audience is putting more trust in these time on page drives better high-quality publishers to make sure that the brand recognition and brands advertising on their site are actually consumer positivity relevant to them, are matching the type of of respondents rated content that they’re looking for, and the contextual targeting message of these ads resonates with the 8 or above for content on the page. increasing relevance in association with 08 Contextual Targeting: The New Frontier

There is a definite upturn in investment We looked at this in another way, by asking when it comes to contextual advertising. our survey respondents whether they thought Our research suggests it’s taking off in approaches to targeting were changing and, a significant way. Our research certainly if so, why. The vast majority of our survey indicates there’s an upturn in investment respondents seem to think they were. in contextual advertising: 59% of our UK Only 8% of UK respondents and 7% of those respondents told us they’d kept spending on in the US said they didn’t think companies contextual constant last year, while 18% said were changing their advertising strategies, they’d increased it. But looking forward, 26% while around two thirds of companies in both said they planned to do more contextually countries (70% in the US and 64% in the UK) targeted advertising next year. agreed that change was being driven by technological factors (“Changes in the ways The figures were similar in the US. There 61% advertising can be targeted to consumers”). had kept spending on contextual constant Unsurprisingly, UK respondents thought last year, and 24% had increased it. Next year GDPR was having a greater impact than their 31% said they planned to do more. And in US counterparts. GDPR was the second most both cases this increased spend runs slightly important factor for UK companies, whereas it ahead of planned budget increases for was ranked fourth in the US, behind cost, and Blast off! targeted advertising in general. changes in the audience.

UK respondents on US respondents on The changing targeting mix contextual advertising spend contextual advertising spend 59% 61% 18% 26% 24% 31%

will keep will increase planning to will keep will increase planning to spending spending do more next year spending spending do more next year in association with 10 Contextual Targeting: The New Frontier The voyage of Forward contextual targeting thinking: post-GDPR

The march Agency experts agree that GDPR is a key His view was echoed by Faulkner. driver behind changing approaches to targeting in the UK, although the extent of its “The demand for contextual targeting has of machines impact is unclear. jumped a little post-GDPR, when data on some audiences has dropped, as certain “Contextual targeting never went away, but vendors are more confident they can deliver Computer vision is the technology that allows that wasn’t possible previously. Firstly, you can its value has been made more tangible by volumes using contextual data than audience computers to analyze and understand pictures. vary the price bid by how specific the context GDPR,” said Jean-Paul Edwards, strategy overlays. That said, we aren’t seeing a mass- A key change in the ability of contextual is. This allows for different pricing strategies to and product development director EMEA at scale change, and personalisation is still the advertising to target customers is the rise of optimise where spend is allocated at a more OMD. “Context has always been a filter, it’s main directive from advertisers.” semantic technology that uses AI to make sense granular level. Secondly, you can scan the page just grown in importance.” of what’s going on in images on a massive for sentiment, not just relevance, which gives you Agency interviewees suggest the discrepancy scale, enabling advertisers to create much a lot more power around targeting.” between UK and US attitudes to GDPR is more sophisticated links between the content simply a question of timing. GDPR may and the advertising. Another technological improvement, mentioned not be top-of-mind for US companies at by Smith at Mediasmith, is the increased speed the moment, but Nixon at SapientRazorfish For example, analysis of the sentiment of the at which today’s targeting systems operate, CONTENT LOG warned its implications will inevitably be felt content of a page can help marketers be far which in turn is reducing the latency issues that EDWARDS,OMD across the Atlantic. more precise in their choice of context for their used to damage the customer experience. advertising, and therefore take advantage of _ Contextual targeting never “It’s going to go global. It started in Europe, more opportunities, as Faulkner at FAST UK “Ten or 12 years ago, filtering for fraud, bots, went away, but its value has it’s already rippling here in the US, and I have explains: viewability etc caused a lot of latency, and that been made more tangible by no doubt that within the next five years our in turn could cause customers to bail. Today, GDPR. Context has always been entire digital environment and approach will “We have always used context when buying technology is fast enough that we’re talking be completely different. Consumers will be traditionally from our publisher partners in milliseconds to be able to look at all that stuff a filter, it’s just grown in smarter, brands will have to be even smarter press and digitally. Now we can continue that or and to make the decision whether we want importance than they are, and contextual advertising is overlay contextual data in a bid environment to to serve that ad or not. So technology is going to play the biggest role in that.” buy media with our programmatic methods. This definitely our friend in being able to apply approach allows us to control the buy in a way many more filters, including brand safety.” in association with 12 Contextual Targeting: The New Frontier YES

Were advertisers right 79% to pull advertising from YouTube in the wake of UK Resolving the The Times investigation , in 2017? CMO s worst fear

Of all the issues with online advertising, Brand safety is a complex issue, and no brand 65% Sentiment analysis is also allowing brands to brand safety is perhaps the most frightening wants to be associated with terrorism or US take advantage of content that would once for marketers. While poor campaign results extreme political views. But as we’ve already have been rejected, according to Huckabay usually stay within the business, an ad seen, the new contextual advertising tools from The Richards Group: appearing next to inappropriate, illegal or offer the ability to examine the content of a offensive content can result in a social media page in far more detail, opening up more “We had a client called Boudreaux’s Butt storm around the brand, or an appearance opportunities while reducing risk. Advertisers Paste, which is a diaper rash cream. When a stand or have a strong position and be true in the national media. can now balance the need for reach with the people talk about diaper rash, they’re talking to the brand, knowing what it is that you’re quality of content that matches their brand, as about pain and discomfort for their child, providing, and understanding the people and Certainly our research showed marketers are Faulkner explains: which old-school contextual advertising how they’re actually using you, even if the still approaching brand safety with extreme would have excluded. But those are environment isn’t what the brands imagine caution. When asked whether the advertisers “News sites, for example, are often avoided components of the content that we actually themselves ideally being in, contextually who pulled their advertising from YouTube in because advertisers may not want to be next need and are relevant to our product. AI speaking. It comes back to ‘how does my the wake of The Times investigation in 2017 to bad news. Contextual approaches allow technology better understands what an brand fit into their lifestyle?’, and actually had made the right decision, 79% of UK you to be more specific about terms to target article’s about and that it’s not referring to focusing on the consumer’s life versus just respondents said yes. In the US that figure or avoid. We can cut out the pieces we don’t pain in a way that would make it something being a space in their cabinet or a spot on was 65%. want to be associated with.” we would want to exclude.” their shelf.

Smith at Mediasmith believes this is another Nixon at SapientRazorfish agreed, “Maybe it’s a branding switch that needs reason why contextual targeting is enjoying suggesting advertisers may now be able to to happen, being surfaced in that relevant a resurgence. CONTENT LOG be more robust in the way they approach ad content when the context is right for the FAULKNER, FAST UK targeting, based on a deeper understanding consumer, not necessarily for the brand. “Safety has always been an issue for brands. of the customer. When that context is right for the consumer Now they’ve learned a lot more about _ Contextual approaches allow and your brand shows up, that’s when digital, they’re paying more attention to you to be more specific about “When it comes to context, there’s negative it connects with them at the heart, and what’s going on with their advertising, and terms to target or avoid. and there’s positive. And as a brand, I that’s when it triggers them to invest in some have even taken back possession of We can cut out the pieces we wouldn’t necessarily say it’s bad to be on investigating.” the buying. There is a greater awareness on either side. What you don’t want to do is be the part of brands as to what they’re doing don’t want to be associated dead middle. You don’t want to be bland and where they’re doing it.” with when it comes to context. You have to take in association with 14 Contextual Targeting: The New Frontier

All this perhaps gets even more exciting when Without computer vision, a marketer simply cannot computers get a human-level understanding of comprehend the full content of the page. For pictures. A computer vision. example, an image featuring mountain bikes might be a good place to advertise energy drinks, or an When Google Display Network or AdSense is image of a tropical beach will lend itself to holiday embedded on a site, what is it that people see? rentals in the Bahamas. Just imagine how powerful it A text or an image that’s either relevant to the text would be for brands to connect their message with or, of course, based on retargeting data of that that image in a very contextual way and tap into the person. But technology is now available that allows emotion that somebody’s experiencing when they’re ads to be displayed over images. It contextually looking at a photo. identifies what is in the image and displays relevant ads on the image itself. Jeremy Kaplan, senior vice-president of sales at GumGum, calls it the most powerful and compelling This is computer vision. And in a world flooded with kind of AI. According to GumGum, the computer computer images – it would take a person 10 years vision and hardware market is expected to reach to look at all the photos shared on Snapchat – the $48.6bn by 2022, so the sector is growing. impact of this technology will be far-reaching. GumGum’s computer vision technology allows Computer vision is an academic term that describes contextually relevant ads to appear where users the ability of a machine to receive and analyze are most likely to see them. The bonus is that visual data on its own, and then make decisions with contextual relevance comes brand safety: about it. That can include photos and videos, but GumGum’s AI blocks anywhere from 24-238% more broadly might include “images” from thermal, more pages than other brand safety providers. or infrared sensor, detectors and other sources.

> How Computer vision is at the core of GumGum’s contextual advertising computer capabilities. Here’s a better look at how their technology does understands images: it processes billions of images every month vision: using machine-learning techniques to determine the content of those images. The technology looks for elements such as automobiles, To deliver contextual it faces, animals, skin, hair, locations, logos and much more. In addition, natural language processing is used to extract keywords and emotionally work? and classifications from the textual content available on the page. All of this results in semantic understanding of content available relevant brand in real time, and this technology is constantly learning how to messages classify more and more things. in association with 16 Contextual Targeting: The New Frontier

Conclusion A number of factors have come together content through many different lenses - in recent months to increase the value sentiment, tone-of-voice, reading age etc contextual targeting brings to online - meaning they can slice and dice content advertising. The headline story has been across a site, advertising on sites that they GDPR, but our research suggests that might previously have deemed too risky by deeper trends, such as advertisers’ desire avoiding specific pieces of inappropriate to associate themselves with better-quality content. content ito improve brand metrics, are playing a bigger role. Because the technology allows a deeper understanding of content, it also opens However, we also discovered that up new possibilities for contextual links contextual targeting is seen as part of the beyond the traditional “ads for cars on broader mix of targeting technologies, the motoring page” approach. Adding adding an extra layer to audience-based that to other targeting methods - both old targeting. Whether this will change as the and new - opens up some very exciting effects of GDPR become clearer - and as opportunities for marketers. GDPR-type regulation spreads to other areas beyond the EU - remains to be seen.

The other key element in the story is the development of technology to analyse content at a semantic level. This has meant brands are better able to balance reach with quality in their advertising. The new tools give advertisers the ability to view in association with 18 Contextual Targeting: The New Frontier

The Drum, in association with GumGum, hosted two roundtables – in New York and in London - with senior executives to understand the resurgence of contextual marketing and how it is seen by advertisers and agencies. The following are the summaries of the roundtables

US roundtable

Call it a renaissance, a rebirth, strategy and ad tech at Deloitte Technology has, thankfully, moved or a reinvigoration of the field: Heat. “There’s a lot of things that are on, says Kevin Flood, chief executive contextual is making a comeback. happening in our marketplace with CONTENT LOG of Powerlinks Flood. “I think media To understand the rise, fall and rise technology, with conversations, with KEVIN FLOOD targeting using context has to be again, a bit of context is needed. data practicing laws, and it’s really complemented by equally precise The roundtable of experts came pushing contextual into a whole _ I think media analytics and insight tech and tools.” together to understand what is different place from when it came targeting using driving the reversion to a method out a few years ago.” context has to be The participants around the table many assumed had had its day. all agreed that contextual targeting To understand why contextual is complemented by isn’t just keyword targeting Jeremy Kaplan, senior vice- making a comeback, it is worth equally precise anymore. They concluded that the president of sales at GumGum, is understanding why it fell out of analytics and insight future of advertising is images, witnessing the renaissance first favor in the first place. New tools tech and tools not just keywords. So being able hand, which he attributes partly to came along promising greater to identify additional metrics brand safety concerns born from accuracy through personalized, and channels for brands to apply the YouTube scandal in 2017. audience-based ad targeting, targeting tactics in a post-GDPR alleviating contextual’s propensity world will be a huge development. But it’s not brand safety alone for mistargeting, creating wastage, driving the change, according and engendering negative brand to Jocelyn Lee, head of media association. in association with 20 Contextual Targeting: The New Frontier

CONTENT LOG OLI MARLOW THOMAS

_ I don’t think we’ve realised the true opportunity of audience targeting. When UK roundtable aligned correctly with context - that’s the Holy Grail

It’s been a difficult year so far for Does the fallout from GDPR (the advertisers, with targeting methods EU legislation) mean that audience and measurement coming under targeting as we know it will become scrutiny like never before. Has a thing of the past? the digital marketing industry’s Having access to granular data of the website - that’s really where With platforms and technologies obsession with audience resulted Anand Narayanan, manager is of course extremely valuable we need to get to. But we’re a long, emerging at a rapidly increasing in a corresponding diminution (digital platforms & innovations) at from both an insight and targeting long way from there for most big rate, how can advertisers better of the importance of context? Panasonic, believes it has created perspective. Has the legislation brands.” understand what to use and what Does adland have a blinkered an opportunity, rather than a change forced companies to not to use as part of their marketing approach to understanding “who” challenge, for brands. “I have take a closer look at their data If we’re a long way away from arsenal? Can context provide over understanding “why”? These lots of debates internally about infrastructure? Will we see a drastic brands truly getting the balance advertisers with a way to better were some of the key questions [GDPR]. Yes, we need to be more change in the ways companies right between audience and understand the moments in a discussed on the day. contextual and more granular in choose to target their audiences? context, what will the tipping consumer’s day where messages our targeting, but there’s a huge CONTENT LOG point be? GumGum commercial will be valuable, as opposed to an “As an industry we focus too much role in understanding whether you ANAND NARAYANAN “A lot of brands aren’t as targeted as director Peter Wallace stressed irritation? on the ‘who,’ “ said Sam Fenton- are adding value to your customers they potentially could be,” says Oli the importance of creating ad Elstone, CEO at Anything Is lives. It is too often a case of ‘here _ Yes, we need to Marlow Thomas, founder of AdLib. units in the context of how people “The fact that we have more ways Possible. “The audience targeting I am, listen to me’. If you walk into be more contextual consume content. “If you overlay to connect with people, and that approach is often about ‘find that a party, you don’t want to be the and more granular in “I don’t think we’ve realised the an ad that’s contextually relevant, we’ll see more platforms and tech person’ and that’s all that matters. person shouting in the centre our targeting, but true opportunity of audience you will get better results for and services over the years, doesn’t If I know this person’s age and of the room, you want to be the there’s a huge role targeting. When aligned correctly all of those involved, whether it mean you should use them all,” location and salary, then that’s all person people want to talk to. If the with context - that’s the Holy Grail. be the consumer, publisher or says Nick Constantinou, managing I need to know to serve them the content we make is emotional and in understanding Finding media-buying houses that brand” he explained. “It is about director at Doner. “It’s not just about right message, when in fact they connecting with the audience in the whether you are can look at audience, they can understanding how best to audience but more tying everything have different states of mind and right context - the right person is adding value to your overlay keywords so the context is integrate your brand seamlessly. back to what is the core business moments in their day - and some going to come and talk to you. It’s a customers lives correct, can look at creative to make As a brand how do you pop up objective, what are the commercial messages are more appropriate in pull strategy rather than push.” sure that the execution is aligned in an image or a video without KPI’s - and then layer on the different context, than others.” to the buying strategy and context interrupting?” audiences and mediums.”

ABOUT GUMGUM

Founded in 2008 in Santa Monica, California, GumGum is a company dedicated to teaching machines to see in order to solve hard problems across a variety of industries. Our proprietary computer vision technology uncovers key contextual information from text and image content on premium publishers all over the world. By unlocking this hidden value, we enable advertisers to deliver highly relevant messages to their most valuable consumers. And Watch the animated short with our highly visible, deeply engaging ad units, we make sure every customer enjoys the quality user experience they deserve. Together, the GumGum advertising suite has all the integrated options you need for an effective digital A Walk Down Contextual Lane marketing strategy. For more info, visit gumgum.com. at gumgum.com/contextual-walk gumgum.com

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