Why contextual AI helps retail marketers shop smarter, not harder

What’s the answer? Cashing in on a new retail advertising era where AI-driven contextual targeting, not just behavior, is king.

The surge in situation-based marketing

Retail media is a relatively recent channel for advertisers but it’s increasingly grabbing a share of marketers’ hard-won budgets. In the past year alone, the likes of Asos, Morrison’s and Curry’s have given advertisers access to their audiences via their e-commerce platforms. And forecasters predict that retail media will account for 16% of total digital ad revenue and be worth £6.5bn by 2027 in the UK.

This boom is not only fueling marketing success though: it’s fueling a demand for context among marketers – a demand for knowing more about what high intent consumers are searching for and their interests, to be able to engage with them around points of relevancy.

Keeping it in context

This increased focus on ‘situational’ marketing, coupled with the impending demise of third-party cookies, means that contextual advertising is fast becoming a cornerstone of successful, privacy-first advertising strategies.

And that contextual effectiveness is being turbo-charged with AI models which are allowing brands to reach their audiences with more precision and scale than ever before. For example, Seedtag’s contextual AI tool ‘Liz’ processes the same amount of articles across 10 languages in one day, that would take a human 200 years to read. Contextual audiences can also now be drilled down into customized groups such as whether they’re into ethical fashion, or whether they’re family-oriented buyers, for example, and even by seasonality.

It’s little wonder, then, that contextual advertising racked up a market value of $195.44bn in 2023  and is projected to grow at a CAGR of 13.3% from 2024 to 2030.

So, how else is the new wave of contextual advertising meeting today’s retail market needs?

Combining context and behavior for better targeting

First-party and zero-party data strategies are on the up as third-party behavioral targeting is on its way out. And modern marketers are increasingly wising up to the fact that combining privacy-compliant behavioral data with context gives them even better retail advertising solutions.

For example, a brand could target its repeat customer base with a new product launch or launch an exclusive privé members-only sale. Or they could create geo-specific campaigns during a particular time of the year or during festivals that are more prominent in a particular location.

Staying on the side of brand safety

As programmatic advertising increases, concerns about brand safety and reputation continue to grow. Nearly 80% of US consumers feel that brands should be concerned about their ads appearing next to negative or inappropriate online content, according to a recent Statista survey. And their concern is impacting on brands’ bottom line: 81% of consumers told an Edelman report that brand trust was the deciding factor in whether they handed over their money.

By analyzing the written and visual content on a page and understanding its relationship with surrounding pages, contextual AI offers retail advertisers an environment whose values and ideas fit with their own – and gives consumers a better, more relevant, less intrusive user experience.

Creating more inclusive and relevant user-experiences

"Understanding the relevancy of a page doesn’t just avoid brand risk: it meets today’s consumer demand for diversity, equity, and inclusivity. Brands that champion inclusive planning not only reach a diverse audience effectively but also expand their reach by discovering new audiences,” says Seedtag’s UK managing director, Marko Johns.

And leveraging AI-driven contextual analytics means that retail advertisers can adopt a more inclusive approach based on consumers’ real-time interests. For example, Seedtag’s contextual research shows that 58% of FMCG content visits access content about healthy goods and 35% of articles about drinks highlight diets. These types of insights mean that advertisers can provide contextual creative that’s more likely to resonate with consumers and deliver a more memorable brand experience.

Similarly, understanding the ins and outs of contextual seasonality trends allows retail advertisers to get a better handle on the particularly seasonal ebbs and flows of the retail market.

To understand more about how contextual AI can help marketers shop smarter for their audiences, visit www.seedtag.com.