Contextual Targeting, as the name suggests, is a strategy of placing an ad that's messaging is relevant to the context of the specific page of which it's served.
For example, advertising a food delivery service on a recipe article/website.
This form of targeting assumes a positive correlation between the brand messaging and the surrounding environment/content.
This form of targeting is not dependent on any form of cookies and takes place on a broader level, with advertisers determining a list of topics, themes, or keywords that they would like the brand to be associated with.
Audience Targeting involves pre-identifying a set of consumers that the advertiser desires to reach. This form of targeting is dependent on understanding the user who will be consuming the content, and thereby exposed to the ad, which has historically been accomplished through cookies.
Cookies, at a very high level, are IDs dropped on a user’s computer/phone by the publisher in order to establish the user so they can be easily re-identified when they return to the website at another time. While this started off simply as a solution to improve the consumer browsing experience over time (remembering log-in information, preferences etc.), it has since become the essence of the entire online advertising industry.
(While a lot has since impacted the prevalence of cookies in digital advertising over the past few years, we’ll leave that aside for the purposes of this article.)
Audience targeting involves targeting specific users based on their browsing behavior - ie. users who are researching a new phone, users who purchased a pair of shoes online - which explains why it's no coincidence you start seeing the same product/brand ad across different websites you visit following your research or shopping efforts.
Audience Targeting can also involve accessing an advertiser’s CRM (customer relationship management) data and targeting it online. This can be done through converting the first party data which might be in the form of email addresses, ISP data, or Membership #, into cookies that can be targeted when the user is online.
Targeting and Brand Safety
Historically, targeting through Ad Networks has been somewhat of a black box - you didn’t really know which websites your ads were running on. This uncertainty over the years has resulted in the emergence of Brand Safety partners such as IAS, DoubleVerify and Grapeshot, mitigating this threat as Ad Networks were forced to provide more transparency.
However, more sophisticated forms of fraud have started to overshadow the Brand Safety concern as of late - bots, malware, etc. A new crop of companies such as WhiteOps and CleanIO have emerged to handle this new risk. It is important to evaluate the networks you partner with to make sure they are comprised of only hand selected, pre-vetted sets of premium publisher, providing peace of mind to advertisers due to their stellar reputation and willingness to work with these 3rd party verification partners as an added layer of protection.