Contextual and Behavioral Advertising in the Age of Privacy
As data privacy becomes a defining concern for users and regulators alike, the digital advertising industry is facing a turning point. Behavioral advertising—once the gold standard for targeting users based on their actions—is being challenged by stricter privacy laws and new platform restrictions. In response, contextual advertising is making a powerful comeback.
In a recent interview, Ned Dimitrov, VP of Data Science at StackAdapt, broke down this shift and explained why AI-powered contextual targeting is quickly becoming the smarter, safer path forward for advertisers, and it’s differences from behavioral advertising.
From Behavior to Context: What’s Changing?
For years, digital advertising has relied heavily on behavioral targeting. This approach tracks users’ past actions—like purchases, search history, or site visits—and uses that data to place them into segmented “audience pools.” If you buy a loaf of bread or sign up for a food newsletter, you’re likely to see bread ads popping up on unrelated websites later.
And it works. Behavioral ads often deliver high performance because they’re built on demonstrated user interest. But with that performance comes a cost: privacy.
As Dimitrov points out, the industry is now seeing a shift. Users don’t want their every move tracked. New laws and browser updates are backing that sentiment.
The Legal and Technological Pushback
Several regulations are reshaping what’s possible in digital advertising. The European Union’s GDPR requires companies to obtain explicit user consent before collecting personal data. In the U.S., California’s CCPA lets users opt out of data collection entirely. These rules don’t just raise ethical considerations—they reduce the amount of user data available for ad targeting.
Meanwhile, tech giants like Apple are changing the game at the device level. Safari automatically clears cookies every 24 hours, and iOS has removed default ad identifiers unless users opt in. These moves make it harder for advertisers to track behavior across apps and websites.
As a result, behavioral advertising is becoming both less available and less trusted. That’s where contextual advertising comes in.
What Is Contextual Advertising?
Contextual advertising doesn’t rely on who the user is or what they’ve done in the past. Instead, it focuses on what they’re doing right now.
For example, if someone is reading an article about baking, it makes perfect sense to show them an ad for bread—even if you know nothing about them personally. That’s the core of contextual advertising: placing ads next to content that matches the ad’s subject matter.
This strategy isn’t new. Contextual targeting has been around for decades. But thanks to advancements in artificial intelligence, it’s now far more effective and scalable than ever before.
How AI Is Powering a New Era of Contextual Ads
At StackAdapt, Dimitrov and his team have built AI models that can analyze hundreds of millions of webpages to determine the best ad placements. Their Page Context AI doesn’t just scan for keywords—it understands the full context of the content.
So instead of matching an ad for “bread” to any article that contains the word “bread,” it looks for deep relevance. Maybe the article is about sourdough baking, artisanal food trends, or nutritional benefits of grains. That’s a much more powerful signal for advertisers.
This level of precision means brands can target niche audiences without ever needing to access personal data. And that’s a win for both privacy and performance.
Why Contextual Works—Especially Now
One of the biggest benefits of contextual advertising is that it aligns with a user’s immediate mindset. If someone is reading a recipe or watching a food tutorial, they’re actively thinking about cooking or ingredients. That’s the ideal time to serve an ad for kitchen tools, grocery delivery, or yes—bread.
Behavioral ads, by contrast, may show up when a user is focused on something totally unrelated. You might be reading the day’s political news and suddenly see an ad for sneakers you looked at last week. The targeting might be technically accurate, but the timing is off.
Contextual advertising thrives on timing. It speaks to users in the moment, when their attention is already aligned with the message.
Solving Ethical Dilemmas with Contextual Ads
There are also cases where behavioral advertising simply isn’t appropriate—particularly in sensitive industries like healthcare.
Dimitrov shares an example: Imagine a person privately researching cancer treatments while living with roommates. If behavioral targeting kicks in and cancer-related ads start appearing across shared devices, that individual’s private health concerns could be unintentionally exposed.
Contextual targeting avoids this risk entirely. Ads are shown based on the content being viewed—not the identity of the viewer.
Measuring Success Without Compromising Privacy
Critics of contextual advertising often point to lower click-through rates (CTR) compared to behavioral ads. But Dimitrov encourages a broader view. Metrics like view-through conversions—when a user sees an ad and later takes action—can be more meaningful than CTR alone.
Brand recall and long-term engagement are also strong indicators. When users encounter ads in relevant, trusted environments, they’re more likely to remember the brand and eventually convert.
The Takeaway: Privacy-First Doesn’t Mean Performance-Last
As Dimitrov explains, we’re entering a new phase in advertising—one where relevance doesn’t have to come at the cost of privacy. Thanks to AI-driven solutions, contextual targeting now offers both precision and protection.
For marketers, this means it’s possible to meet performance goals while respecting user preferences and complying with privacy laws. And for users, it means a better online experience—where ads feel more like a natural extension of the content, and less like digital surveillance.
The industry is moving fast, and the message is clear: contextual is no longer a fallback—it’s the future.
Behavioral and Contextual Advertising Targeting with StackAdapt’s Ned Dimitrov
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Podcast Transcription:
Transcript:
Here you guys have two sort of targeting capabilities around behavioral and contextual can you talk about kind of the differences there and and how that data can reflect you know what you’re ultimately doing.
Yeah, definitely so in terms of advertising there’s two general ways of targeting advertisements so the predominant way in Industry currently is what’s called behavioral advertising so that basically means it takes some user information some historical action that the user did to show that user future ads so for example:
I go to the store and I purchase some bread then some company that’s selling bread what might show me bright advertisements later and sometimes these actions are offline like.
I just gave as an example of going to the store and purchasing something and sometimes they’re online so uh maybe online I registered for some email list or I viewed some article on CNN that put me in a user pool so users that perform some action and then based on that action the advertisement gets targeted so that’s the predominant way and the reason for that is because it gets great performance for the advertisers so folks who are interested in bread online they’re gonna likely to be interested in bread.
And so it really makes sense to show them ads for your product to them however that’s lately been running with some against some societal pressure so users in general want to limit the access to their information and there’s a lot of both legal and ethical considerations.
So there’s recent laws in Europe and the law called the general data protection regulation that basically stops online companies from collecting user data unless the user specifically gives permission so it’s an opt-in law so I have to opt in for my data to be collected for it to be collected in Europe.
In the US we also have similar laws so there’s California passed a law called the CCPA which is very similar to Europe’s law but it’s an opt-out where you have to say I don’t want my information to be collected and then the website has to not collect your information subsequently so this pressure of users not wanting their information to be available has led to both legal changes and technological changes.
For example Apple has been doing uh significant changes over time to both iOS and Safari to make the browser be more private to get less of that information available to advertisers so for example one of them is automatically clearing cookies every 24 hours in Safari.
Another more recent changes getting rid of the user identifier in in-app ads in iOS so these things are making behavioral advertising sort of less less interesting to advertisers because their clients don’t want their you to release their user information and it’s becoming less available online as well so the other method of targeting ads has also been around for decades and it’s called contextual advertising so there you use no user information you just place the ad around relevant content for your brand so going back to that bread example so maybe I want to advertise my new brand and so I place my ads on the Food Network website because I know that people interested in food are going to be over there and those are the folks that I want to get my ad across and so contextual is really nice in terms of user privacy because it involves no user information it’s just about information about where the ad is showing up that’s been gaining a lot of traction in the advertising industry because it’s privacy friendly and sometimes contextual is the only way to really do things.
I’ll give you an example where ethics really becomes a problem for Behavioral advertising so let’s say that I’m a roommate with let’s say six other people and I had a private cancer diagnosis so I’m browsing online for various cancer treatments and that might Place me in some behavioral audience for let’s say cancer research or Cancer Treatment Centers to show ads to me so that might leak my private information of my private diagnosis to my roommates because they have similar online identifiers as me because we’re in the same household and so they might start getting a sort of cancer treatment ads that should have been targeted to me so especially in the healthcare setting there’s a lot of ethical considerations that make behavioral advertising not possible that Force folks to look at contextual advertising and so stack adapt has recently been doing a lot of work on the contextual advertising space in particular leveraging Ai and analyzing hundreds of millions of documents uh to get good context for advertisers contacts that are likely to perform well for their ads and one of the major things that we’ve been finding out is that context is a great way of getting brand names into users heads and the reason for that is that let’s say again we’re take that bread example if we show that bread next to an article that’s talking about bread well the user is currently thinking about Brett they’re right now like that’s what’s on their mind and so the ad is much more likely to have an impact in the user’s mind whereas behavioral advertising the one that I gave an example earlier where I’m just placed in a pool I might get that ad at any time of the day not just when I’m reading bread about bread I might get that when I’m reading today’s Daily News and when I’m reading today’s Daily News maybe I’m not as open to that messaging as I would be otherwise.