• by Ryan , Anand Subramanian , June 2, 2005

Search. Behavioral targeting. Contextual advertising.

These are just some of the terms floating around in cyberspace within the complex industry of online advertising. As the Internet evolves and new technologies emerge, marketers are under increasing pressure to spend their budgets and choose online ad solutions wisely.

With each vendor claiming superiority and the ability to generate powerful and measurable results, it is inevitable that even the savviest marketer will experience confusion. To combat this, it is critical for marketers to be informed about the various options available.

So, what exactly are the differences between search marketing, behavioral targeting, and contextual advertising? What are the attributes of each? And what can marketers expect in the future?

Search-based advertising refers to the ads that appear on a Web page after a search has been conducted. Search advertising continues to soar in popularity, but the lack of relevant ads that are generated is an issue. Advertisements go unnoticed if they are not appropriately aligned with the interests of the user. This happens frequently with a specific keyword that may have more than one meaning. Take the following example: a potential customer types in the word "matrix" because they are interested in purchasing a Toyota Matrix. Instead of being presented with ads about the automobile, the user sees ads for the movie and hair care line by the same name. The end result due to the lack of relevancy is a lower click-through rate and opportunity to sell.

Behavioral targeting monitors online behavior, generating ads accordingly. A marketer is able to tell if a user spends time searching for a new car on the Toyota Web site and then a short time later visits a content site. When on the content site, the user will be served with an advertisement enticing them to purchase a Toyota car. Behavioral targeting often provides more bang for the buck, allowing advertisers to appeal to consumers with different ads, based on their past behavior, even as they view the same page. The downside is that behavioral targeting is considered by many to be invasive. This is an issue marketers must consider when choosing behavioral.

While behavioral targeting monitors the behavior of the online user, contextual advertising focuses solely on content. Contextual advertising is a compelling offering for marketers because as the content of a Web page changes, so do the ads. As an individual browses the Web, they are presented with advertisements that are deeply relevant to what they are reading. True contextual advertising does not download any software on a user's computer and relies on relationships between online advertisers and Web publishers to market to consumers. The high degree of an ad's content relevancy promises the potential for a higher click-through rate and an increase in sales and profitability.

The search market will continue to thrive, but marketers will look to a variety of areas to spend their online budgets. As the search market becomes saturated and costs soar, they will look to more cost effective, targeted marketing technologies. This is precisely where behavioral and contextual advertising will come into play.

Marketers can expect contextual advertising and behavioral targeting to begin to work together and become more integrated, in specific instances when either solution does not work well on its own. For example, a Web site that has pages that cannot be contextualized, such as a home page, will generally not benefit from contextual advertising. In this case, tracking a user's behavior is a more strategic tactic. On the flip side, for the same Web site's content pages, using contextual advertising to show relevant ads makes the experience more beneficial to both the marketer and potential customer.

Marketers need to be smart about where to spend their online budgets and focus on improving the relevancy of their campaigns. When users see relevant advertisements it not only enhances their user experience, but also increases the likelihood of sales.