Contextual Advertising: The Road Ahead

Isn’t it always a sorry sight when legends such as Amitabh Bachchan and Shah Rukh Khan in their respective TV shows have to beg audiences not to go anywhere during the commercial break? I bet yes!

Taking a deeper thought in to the please-don’t-go-away (read commercial) break, it is not that the marketers don’t know that “don’t think of a pink elephant” makes you surely think of one. Therefore, don’t go anywhere actually tells the house wife that she can utilise the break for setting up the dinner table.

Let’s break the concept into finer pieces. For instance, when one throws a frog in a boiling water tub, the frog jumps out in a jiffy. However, if the same frog is immersed in luke-warm water and then the water is heated to the boiling point, the frog actually dies in the water.

Google becoming the world’s largest media company while catering only to a $14 billion market size while media companies such as AOL Time Warner (being 1/3rd the market cap of Google) focusing on a market size of nearly $400 billion plus (approx conventional advertising minus outdoor, below the line etc.) indicate that water reached the boiling temperature before any one even noticed.

The same seems to be happening to the world of conventional advertising – earlier, even the father of modern advertising, John Wannamaker could afford to say that “only half of my advertising actually works.”

Advertising is going through a metamorphosis; following things seem to be happening in advertising:

Dynamic Pricing: I think Google as a publisher has proved beyond doubt that the best way for a publisher to monetise inventory is to auction it. Thus, it is a matter of time when all media shall find a way to auction inventory.

Measurement: Measurement technologies have evolved exponentially. I don’t see why an outdoor shall not count the number of cars that actually passed the road as well as categorise the cars into different categories – not to mention the impact the hoarding had on brand recall and sales.

Real Time Creation of Advertising: Earlier, the advertising units were relayed to millions of people but now advertising units are increasing being customised for a smaller group – thus reducing the costs and time available to create each unit.

All these things will force conventional advertising to become contextual. Some media owners may adapt quicker, while others may perish.

At this moment, people think contextual advertising is synonymous to online advertising or search advertising. Search can be said to be the start of contextual advertising, however contextual advertising has nothing to do with search or online media. I think all media are going through a paradigm shift that shall enable contextual advertising in conventional media too.

Communicate2 is often asked why we have built a 140-people team focused only on Search Engine Marketing – our answer has always been that we are a contextual advertising firm; today, only search offers contextual advertising opportunity in the real sense and so Communicate2 is focused on Search. Once other media start offering an opportunity of contextual advertising, I don’t see why Communicate2 shall also not gain a leadership position in that space too.

At Communicate2, we are building capabilities that allow us to understand and excel in a dynamic-pricing and measurement-oriented environment where people need to create advertising units on a real time basis. Our endeavour is to build these skill sets. We are media agnostic – these skill sets would be equally valid in all mediums that shall become contextual.

So how does one define contextual advertising? Or for that matter define search marketing?

If a person defines contextual or search advertising from Google’s point of view, it is either displaying ads next to relevant content or displaying ads based on what the user searched for on the search query box.

My definition of both search and contextual advertising is much broader. For me, search advertising is related to identifying or finding content and then serving ads on a real time basis, based on that content. The content could be text but it also could be audio or video (for example, a video feed being recorded from an outdoor hoarding-car being identified and advertisement being served on the outdoor).

Google’s value comes from being able to identify this content quicker than anyone else and being able to serve the ads on a real time basis through an auction mechanism. If one considers this as the definition of search advertising, search can be applied to any medium. If one can record a telephonic conversation, index the audio files and serve ads based on the conversation, that is still search for me.

Defining contextual gets even more complicated because contextual advertising in my books is not limited to content, but also includes behaviour, target audience, identification of gender, state of mind the person is in and using that information to understand context and creating more effective advertising. For example, an OOH (out of home) screen in a coffee shop of the future will have a web cam. I can visualise Communicate2 team members looking at the web cam to decide which advertising we need to display on that particular screen. Our team members would be trained to identify the context of the conversation – knowing who the boss is, probably even identifying who is the prospective investor and who is the entrepreneur, not to mention making sure that our client who markets due diligence services is displayed.

I started with a bet and I want to end with one. I have a bet with my colleague that in the next few years Google will stop using the term Search Advertising from their marketing collaterals. They will use a term such as Contextual Advertising or something on similar lines…Let’s see if I win the bet!