How has contextual changed amidst the AI revolution, and how can advertisers best harness it?

Contextual targeting has been steadily growing in demand over the past years, making a mighty resurgence into the ecosystem. The contextual advertising market was valued at a staggering USD$198bn (£148bn) in 2024, and looking ahead at the next decade, it’s predicted to grow at a compound annual rate of over 14%. 

Its resurgence was particularly spurred on by advertisers seeking out targeting methods which wouldn’t require the third-party cookie. Despite the chapter of Chome’s cookie commotion finally being over, the years-long scramble to find alternative, privacy-first solutions propelled the industry into a new era, and there’s no going back now. 

Advances in AI technologies have substantially enhanced the offerings of contextual for advertisers, cementing it as one of the best options for ad targeting in an ecosystem increasingly preoccupied with user privacy. 

AI allows advertisers to move beyond keyword targeting, facilitating more precise and efficient ad placement through deeper content understanding, improving brand safety and suitability. AI also changes the game when improving contextual’s scalability, as well as facilitating far better optimisation, among other enhancements.  

We asked experts from the ad industry to expand on contextual’s comeback. How has it evolved, and how best can it be harnessed by advertisers within campaigns? 

It’s about evolving new methods, not reverting to old ones 

The future of contextual advertising isn’t about reverting to old methods – it’s about evolving them. As privacy regulations tighten and third-party cookies phase out, combining contextual intelligence with other data sets is becoming a powerful way to deliver relevant, respectful advertising. AI plays a key role here, helping marketers understand not just the environment in which an ad appears, but how it intersects with audience behaviours, preferences and intent.

Premium inventory is also critical – offering high-quality, brand-safe environments where context and content truly align. When paired with ethically sourced, privacy-compliant data, contextual strategies can move beyond keywords toward more nuanced, insight-led planning.

Ultimately, it’s this interplay – between context, consented data and quality environments – that’s shaping the next chapter of digital advertising, enabling greater precision and purpose while keeping transparency and trust at the centre.

Lisa Kalyuzhny, Vice President, Sales, EMEA, Nexxen

Shifting to a semantic understanding of context 

Traditional contextual targeting relied on basic keyword scanning and broad content categories, often missing tone, sentiment, and nuance, and resulting in less relevant ad placements. With AI, we’re shifting to a semantic understanding of content, enabling platforms to analyse the full meaning of a page or video, not just isolated words. 

Even more powerful is AI’s ability to infer intent and behaviour from that context, like predicting that someone reading about nature trails may be more receptive to an ad for organic snacks. This approach is not only smarter, it's more privacy-friendly, because targeting is based on content interaction, not personal identity. Over time, AI models also learn from aggregated, anonymised patterns, recognising which content-ad combinations drive results and creating a feedback loop that continuously improves performance without compromising user privacy. The result is more relevant, scalable, and future-proof advertising.

Denila Philip, Senior Product Manager, Clinch

The best of both worlds 

Contextual advertising in video is no longer about basic keyword targeting – it’s about precision and relevance at scale. On CTV and CTV OOH screens, AI-driven insights can identify not only the content category but also the mood, setting, and timing of a video, aligning ads with moments that matter. This creates an experience that feels natural for viewers while ensuring privacy-first practices.

Performance follows context: Ads placed in relevant environments consistently deliver stronger engagement and brand lift compared to audience-based targeting, especially as consumers demand both personalisation and privacy. For advertisers, contextual video offers the best of both worlds – brand-safe, privacy-compliant, and high-performing.

Brian Cullinane, Chief Commercial Officer, VideoElephant

A strategic opportunity 

As privacy regulations tighten and third-party cookies are phased out, contextual advertising is undergoing a robust renewal, aligning with ethical data use and meeting growing consumer demand for transparency. 

Today’s contextual strategies are far more advanced than their predecessors. AI, machine learning, and natural language processing power them. These technologies enable advertisers to understand real-time content signals, sentiment, and user intent with precision, placing ads in environments that feel both relevant and respectful.

Brands can now deliver tailored messages without compromising privacy, tapping into on-page context rather than personal history. This shift also rebuilds consumer trust, which has been undermined in the era of hyper-personalisation. Contextual advertising is a strategic opportunity to create meaningful, compliant engagements.

Evolving brands that invest in ethical, AI-enhanced contextual tools will stand out and offer value while honoring the new rules of digital engagement.

Yaron Tomchin, CEO, Mobupps

Moving beyond the broken cookie-based model 

The next generation of AI-powered contextual technology is taking the digital ad industry beyond the broken cookie-based model and into a powerful new age of mindset-focused audience targeting. At the cutting edge, contextual tech is now able to read all of the data signals within a digital environment, including text, images, video, and audio. This rich insight gives us a much deeper understanding of the content and of the mindset of the audience viewing it. We’re then able to serve only the most relevant, suitable and safe ad placements, seamlessly tapping into the mindset of an audience and without the use of any third-party cookies or personal data. 

An even bigger opportunity for advertisers is to combine their contextual and creative insights with AI-powered attention measurement and optimisation, allowing them to pinpoint not just the most relevant digital content but also the environments where consumer attention rates will be the highest. This can be achieved not just at the planning phase, but while the campaign is in flight, permitting live optimisation of contextual and creative activations based on what’s delivering the highest performance and the best brand outcomes.

Jess Aylett, Head of Sales UK & International, GumGum

The strengths of contextual advertising are being redefined

Contextual advertising has always had strong fundamentals, such as privacy by design, brand-safe environments, and the ability to align ads with content in a meaningful way. But for years, it was seen as a static tool. Now, privacy regulations, ID deprecation, and a growing discomfort with surveillance-style targeting have made the limitations of behavioural clear, and given contextual targeting a second life. Only this time, it’s been re-engineered for a complex digital world.

Contextual advertising’s strengths are being redefined through a neural-level understanding of human behaviour. Newer technologies are able to read between the lines of content, interpreting emotional tone, assessing intent, and gauging levels of cognitive engagement. AI-driven insights are now amplifying this even further – moving beyond keywords to predictive relevance, enabling advertisers to anticipate needs in real time. At the same time, the emphasis on ethical data use ensures these advancements respect privacy while still delivering impact, aligning with evolving consumer expectations for transparency and value. It’s a shift from surface-level advertising placement to something far more intuitive, adaptive, and trust-driven.

Marko Johns, UK Managing Director Head of Agency, International, Seedtag

Rethinking contextual as a strategic driver, not a fallback

As third-party cookies crumble and consumer expectations evolve, contextual advertising is undergoing a significant reinvention. Powered by AI and machine learning, today’s contextual targeting goes far beyond its static past – unlocking nuanced understanding of content, sentiment and intent in real time. This allows brands to deliver relevant, privacy-compliant experiences without tracking individuals across the web – an approach validated by Nano’s own research, which shows 70% of consumers actively hide their identity weekly to avoid being tracked. 

For advertisers and agencies, the opportunity lies in rethinking contextual as a strategic driver, not a fallback. When paired with ethical data use and real-time insights, it offers a scalable, future-proof alternative that aligns with growing demand for transparency and control. It’s now about blending creativity, performance and trust. In a privacy-first world, the smartest campaigns will connect relevance with responsibility, making next-gen contextual a key pillar of the modern media mix.

Vanessa O’Connell, Marketing Director, Nano Interactive

Context should reflect real life, both online and offline

Contextual advertising is just as important today as ever but how we think about it needs to evolve. It’s no longer just about placing ads next to relevant content online. Consumers lead multifaceted lives that shift between work and leisure, weekday and weekend, online and offline experiences.

For me context has to reflect real life, both online and offline and that varies by time and place. Online content interest is useful but why stop there? When combined with social engagement, sociodemographics and mobility data more sophisticated contextual strategies can be built making campaigns more relevant as they better reflect consumers' lives. 

Real-life context works particularly well with an area-based marketing approach, as the combination of when and where allows for more nuanced planning and activation across the entire omnichannel mix, as powerful for CTV and prDOOH as it is online.

Consumers are not one-dimensional, so let's ensure that modern day contextual strategies reflect that. 

Dom Woolfe, VP Sales and Country Lead UK, Taptap Digital

Contextual advertising is more than relevant – it’s necessary 

At AlgoriX, we began investing early in contextual signals, anticipating the decline of third-party identifiers. Today, contextual advertising is more than relevant; it's necessary for brands looking to deliver effective campaigns while respecting user privacy.

AI now makes it possible to understand content, sentiment, and user intent without relying on personal data. This allows for smarter targeting in environments where consent is limited or unavailable. However, stricter privacy laws in the US and Europe mean even seemingly non-personal data must be handled with care. Health and location signals, for instance, are facing increased regulatory scrutiny. In the EU, health data cannot be used for profiling, and geolocation requires clear opt-in.

Advertisers must take a proactive stance on ethical data use and communicate transparently with consumers. Any perceived misuse could erode trust and invite enforcement. Long-term success will depend on aligning contextual innovation with privacy principles, responsibility, and regulatory compliance.

Frederic Liow, Chief Revenue and Operations Officer, AlgoriX

A future-proof solution 

In today’s privacy-conscious ecosystem, contextual advertising is emerging as a future-proof solution. AI-driven context targeting mitigates reliance on personal data and enhances performance by aligning messages with the content consumers are engaging with. 

Contextual AI enables precise, privacy-safe targeting based on real-time content signals – allowing marketers to engage with new consumers on platforms like YouTube where traditional data strategies often miss.

Consumers are more responsive to content aligned with their immediate mindset, and prefer non-intrusive ads. By identifying the moments when consumers are most receptive, advertisers can deliver messaging that resonates more, leading to higher brand affinity, increased awareness, and stronger conversion outcomes.

This is particularly important for verticals like alcohol, pharmaceuticals, and children’s products. These verticals face limitations around behavioral targeting; contextual strategies offer a compliant way to reach the consumer. Through AI video-level context detection, advertisers in these industries can activate against brand-safe content – without risking regulatory violations.

Amy Unrau, RVP Sales, North America, Silverpush