The Effectiveness of Contextual Advertising

The Effectiveness of Contextual Advertising
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The Effectiveness of Contextual Advertising
1 introduction
Recent years have exhibited increasing funding of popular internet content such as blogs, e-mail, and social networking by advertising firms. Many online internet content and service providers (web publishers) obtain most of their revenues from online advertisement. Behavioral grouping of internet users is a strategy used by internet content providers to increase the value of advertisement.
Contextual advertising has been gaining momentum since the advent of online search engines and mobile phone usage. This form of internet marketing targets customers with specific traits such as demographics, nationality, origin, purchasing power and history. The use popular social media network such facebook and twitter has further increased the use of online contextual system on mobile browsers targeting the youth population.
A study conducted by Beales, (2009) found that this method of target advertisement has been effective and successful in securing huge amounts of revenues to web publishers which are gained from fees charged per every successful click on the advert link by the web user. This has and continues to generate more revenues as Compared to non target run of network advertisements. Beales (2009) also found contextual advert to be much more effective at converting users of the web to buyers of advertisers’ goods and services. His study findings therefore points to the increasing importance of targeted advertising by many companies.
Contextual ad is beneficial to consumers because they are treated as individuals rather than collectively making the method applicable in behavioral marketing of products and services, (Chen, et al 2001). In this form of advertisement, Consumers’ behavior and purchasing habits can be easily determined through the system and necessary adjustment made to win consumers with certain behavioral traits. The advertiser is able to reach more targeted consumers who have strong preference for their products hence eliminating wastage advertising experienced in other forms of advertisement. This saves unnecessary costs and leads to high profits.
Nevertheless, this method has raised some fears and concerns more specifically on the privacy rights and policies. The system has invaded on the privacy of individuals by way of interception web traffic without the consent of the web user. Most targeted fans surveyed in USA have cited violations of their privacy rights through tracking of their online behavior.
Overview of contextual advertising
Advertisement is usually treated in two ways, i.e. from the advertisers and the consumer point of view. Advertisers make decisions of planning, creating and conveying an ad whereas consumers react to the ad created by advertisers. Interaction of these two key players is facilitated via the communication pr...