Philipp Meissner & Maximilian Beichert
When the first websites were created, marketers saw their potential and used them to get in touch with their customers by placing display advertisements on them. Since then, display ads have been showing their effectiveness in redirecting customers to a company’s website or converting banner advertisement impressions into real purchases (Lobschat, Osinga, and Reinartz 2017, p. 910). To make an even stronger impression on the consumers, marketers started adapting ads with regard to the content in which they are presented. Just like in traditional media, this has drawn a lot of attention from researchers towards digital contextual advertisements, aiming to reveal its effectiveness. This research can be separated into three streams focusing on general effects, attitudes and memory, and clicking behavior and purchase intention.
Effects related to market success
One type of potential benefits of contextual advertisements is related to the firm’s market success. In an exemplary model, researchers revealed two outcomes. Firstly, an advertising firm can benefit from contextual advertisements by reaching exactly the customers who have a preference for their product (Zhang and Katona 2012, p. 988) and, secondly, contextual advertisements can be used in competitive situations to reach a customer before a competitor does (Zhang and Katona 2012, p. 991). Both findings can potentially impact the firm’s profitability and show the relevance of contextual advertisements in the online context. In addition to that, the advertisers’ credibility may depend on the correct use of contextual advertisements. A study from 2012 hypothesized, that if a banner advertisement that is contextually matching with a website, the effectiveness of the ad is impacted by the credibility of the advertising company (Kim and Choi 2012, p. 145). Their results support the hypothesis and show that ad credibility, attitude towards the ad and the brand as well as purchase decision are significantly impacted by contextual advertisements if the company is credible in the first place (Kim and Choi 2012, p. 149). These findings show that there are complex factors, such as competition, customer preferences and firm credibility, that a company needs to consider when deciding on implanting contextual display advertisements.
For an advertisement to have benefit for the company, it needs to grab peoples’ attention. The question arises, if contextual advertisement is useful to enhance that. Focusing exactly on that, researchers have looked for confirmation that contextual ads are better at increasing peoples’ attention towards the ad than normal ads. While their first experiment showed a positive impact of ad-context congruency on attention (Moore, Stammerjohan, and Coulter 2005, p. 75), their second experiment failed to support the finding of the first one (Moore, Stammerjohan, and Coulter 2005, p. 78). A similar issue also occurred in a later project that asked if contextual congruency leads to a higher attention to the banner ad and, vice versa, to a lower attention towards the article which the ad accompanied (Wojdynski and Bang 2016, p. 657). Although the analysis revealed a positive effect of congruency on attention towards the ad, it did not find a significant reduction in the attention towards the article (Wojdynski and Bang 2016, p. 660). This contradiction is similar to the one found in the earlier study and shows that the effectiveness of contextual ads in grabbing attention is not yet entirely understood.
Closely linked to the concept of attention, for an ad to have any positive impact at all, it needs to be perceived positively by the consumers. A stream of research has therefore looked into the effects that arise, when a contextual ad forces itself on the consumer. In 2002, a study looked into means to reduce a persons’ perception of advertisement intrusiveness. For that, they studied whether contextual resemblance between a website and a pop-up ad (which is an advertisement that appears in a new browser window (Marketing Terms 2019)), will lead to people considering the ad to be less unpleasant (Edwards, Li, and Lee 2002, p. 86). Indeed, they found support for this hypothesis (Edwards, Li, and Lee 2002, p. 91). This finding is especially of high relevance as they also found that a high intrusiveness is linked to an increase in advertisement avoidance (Edwards, Li, and Lee 2002, p. 92). In general, it has been found that some types of display ads are perceived more unpleasant than others. Especially animation, bad aesthetics and bad reputation of the advertiser are observed negatively (Goldstein et al. 2014, p. 751). Despite that, the research on visual features in combination with contextual congruency of banner ads is relatively sparse. Only a study from 2005 was looking at how color schemes influence the contextual advertising setting. They suspected that consumers, that are aware of the advertisement, to have a more positive attitude towards a contextual ad, if the color scheme of the ad was cool instead of warm (Moore, Stammerjohan, and Coulter 2005, p. 73). Nevertheless, they failed to proof their hypothesis (Moore, Stammerjohan, and Coulter 2005, p. 77) and, thereby, left open questions for future research to consider.
Attitudes and memory
While the attention to the ad is a good starting point when looking at contextual advertisement effectiveness, the way of how it impacts peoples’ thinking needs to be considered, too. To do so, research has focused on questions regarding memory, namely recall and recognition of ads and brands, and attitudes towards ads and brands. Most of the studies try to look at both issues. For instance, Chun et al. suspected that brand recall and recognition as well as attitude towards the brand and towards the advertisement are positively impacted, if the banner ad is contextual (Chun et al. 2014, p. 355). Their results show that brand recognition was improved with contextual ads, while brand recall did not change compared to showing a standard ad (Chun et al. 2014, p. 364). Contradicting this result, an experiment conducted at a large university revealed that the name of a brand is recalled better, if the advertisement in which it is presented is contextually similar to the website (Yaveroglu and Donthu 2008, p. 38). With respect to attitude, Chun et al. only found that attitude towards the ads improved, while attitude toward the brand remained the same as with normal advertisements (Chun et al. 2014, p. 364). Interestingly, they were able to show that complexity of the ad moderates the recall and attitude towards the brand, meaning that a lower complexity leads to higher recall and attitude (Chun et al. 2014, p. 366). This finding may be backed by the discovery that visual congruence enhances ad recognition. (Bishop, Brocato, and Vijayalakshmi 2017, p. 378). Supporting the finding of their colleagues with respect to attitudes, another group of researchers discovered that ad-context congruency has indeed a positive impact on ad-related attitudes and, in addition to that, purchase intention is also enhanced (Segev, Wang, and Fernandes 2014, p. 26). Nevertheless, in their research they did also find a significant effect of contextual similarity on attitude towards the brand (Segev, Wang, and Fernandes 2014, p. 26) and, thereby, contradict their colleagues. In addition to these findings, a regularly cited research project was able to show a moderating role of contextual congruency. The study indicated, that if people are consciously aware of the firm or brand that is placing the banner advertisement on the website, the attitude towards the advertisement is more positive if the ad is contextually similar to the website (Moore, Stammerjohan, and Coulter 2005, p. 72). With respect to advertisement (rather than brand) recall and recognition, a study from 2011 was able to show a main effect that a congruity of the display ad and the context of a website significantly improved ad recognition (Zanjani, Diamond, and Chan 2011, p. 74). Additionally, they were able to show that if the person browsing the website was actively looking for information rather than just surfing the page, ads were recalled and recognized better if they were contextually matching (Zanjani, Diamond, and Chan 2011, p. 73).
In summary, despite some mixed and contradicting findings, most researchers seem to agree on the effectiveness of contextual display advertisements on improving attitude and memory for brands and ads.
Clicking behavior and purchase intention
Going beyond attitudes and memory, consumer behavior also poses a relevant field of research for digital contextual advertisements. To study behavior, researcher have turned to clicking behavior and intention to purchase. Clicking behavior is measured in two ways. While some studies focus on the pure intention to click an ad, others only measure the actual click-through-rate (CTR) of the display ad. Focusing just on the first way of measuring clicking behavior, one study from 2008 has looked at a person’s intention to click on the banner ad if it was contextually congruent. Their findings show that people are more inclined to click on a display ad, if the ad’s content is similar to the website’s content (Yaveroglu and Donthu 2008, p. 38). This finding is support by another study, which found thematic congruency to improve click intention, if the consumer has an undivided attention (which they measured via gaze jumps between the ad and the website). Furthermore, for a divided attention they were able to show a negative effect of contextual congruency on click intention (Janssens, De Pelsmacker, and Geuens 2012, p. 594).
Looking at actual behavior rather than intention, CTR is the second way of measuring clicking behavior. Assessing CTR is especially useful, as it is found to be a strong marker for the effectiveness of an online ad (Martín-Santana and Beerli-Palacio 2012, p. 435). A study from 2016 therefore looked at CTR and questioned whether combining contextual advertising with behavioral targeting (a form of targeting that adapts an ad according to the consumer’s past behavior (Bleier and Eisenbeiss 2015b, p. 391)) is helpful at increasing the CTR and, thereby, the actual behavior (Lu, Zhao, and Xue 2016, p. 5). They found evidence that both, a low and a high level of behavioral targeting, in combination with contextual targeting lead to a significantly higher CTR (Lu, Zhao, and Xue 2016, p. 13). Here it becomes apparent, that the driving force is not the aspect of behavioral targeting since the effect is positive for both, opposite configurations (high and low). Hence, the results clearly imply a positive impact of contextual targeting on CTR. Heading towards a similar direction, another study used the data from two lab experiments and two field experiments to determine whether the effect of personalization of an advertisement on CTR is impacted by congruency (Bleier and Eisenbeiss 2015a, p. 679). In contrast to the first study mentioned, they don’t find any evidence that congruency between a website and an ad moderates the effectiveness of personalization for CTR (Bleier and Eisenbeiss 2015a, p. 686). And while combining contextual advertisements with behavioral targeting might not work, the ad format might also hinder effectiveness. In 2012, a research project postulated that if there was high involvement towards the website, a rectangular, contextual ad would lead to a higher effectiveness of the advertisement (Martín-Santana and Beerli-Palacio 2012, p. 425), a factor that they showed could be measured well by CTR (Martín-Santana and Beerli-Palacio 2012, p. 431). Nevertheless, they did not find any support for their hypothesis.
These last two studies illustrate that although contextual advertisements is found to improve click intention, its effects on CTR and actual behavior depend on other factors such as format, involvement or the combination with other targeting approaches.
Looking at a different type of consumer behavior, some studies focus on purchase intention. A 2014 study did exactly that. The researchers constructed a regression model that revealed that contextual advertisements can help to increase people’s purchase intentions (Segev, Wang, and Fernandes 2014, p. 26). Supporting that finding is another study that found purchase intention to increase if the webpage and the ad are congruent and if the advertiser is highly credible (Kim and Choi 2012, p. 154). Finally, a research project published in the journal ‘Marketing Science’ took a closer look at how purchase intention is influenced by advertisements being contextual and whether obtrusiveness and high visibility influence this relationship (Goldfarb and Tucker 2011, p. 390). Using the data of a large field experiment, they could in principle show, that contextual advertisements are a good way of increasing purchase intention. Nevertheless, if the ads are not only contextual but also highly visible or even intrusive, the effectiveness of contextual advertisement vanishes (Goldfarb and Tucker 2011, p. 396).
In conclusion, it becomes apparent that contextual advertisements are of high relevance to companies. From targeting the right customers in the correct way to provoking a positive attitude, a better brand and ad memory, contextual advertisement is a valuable tool of targeting for advertisers to use, when placing display and banner ads on websites. Nevertheless, there are other, slightly less common or relatively new online scenarios for contextual advertisements. These include, for instance, video platforms and gaming websites.