The Little Black Book of Online Business: 1001 Insider Resources Every Business Owner Needs

1.4. CONTEXTUAL ADVERTISING

Contextual advertising is a term that could apply to CPC/PPC advertising. But here I'm talking about advertising triggered by software on the user's computer. This method of advertising has a troubled past and is still somewhat controversial.

There's an ethical (and legal, in most cases) problem if the user doesn't know the software is going to trigger ads. In the past, this function was not disclosed or was hidden in the legalese of the "End User's License Agreement." In addition, there were some shady operators who made the software well-nigh impossible to remove from the user's system. These applications were known as adware.

However, as long as the software in question is installed with the full understanding and permission of the user, I believe the ethical requirements have been satisfied.

The way it works is very similar to the PPC search engines from the advertiser's perspective. You simply list the keywords that should trigger the advertisement or you list the web site URLs you want to trigger your ads. Contextual advertising can be purchased on a CPM or CPC basis (and even CPA, in some cases).

Then, when users (those who have the contextual advertising software installed on their system) enter a search term in their favorite search engine, and that search term matches your keyword(s), they see your advertisement.

And here is where this form of advertising departs sharply from the PPC model....

The web sites in question have not contracted ...