Contextual advertising places paid listings on relevant sites that are not search engines. Google, for example, has a network of what they call “high-quality partner sites”. Contextual ads give advertisers a chance to reach potential consumers at a different stage of the buying cycle. It also allows additional ad format other than the typical text ads, such as images and videos.
Google’s content network has come a long way over the past several years. Two years ago, I would not have recommended content advertising. Now, I can definitely say it’s worth checking into.
However, it is still very important to keep content ads separated from search ads. Because the stage of the buying cycle is completely different, the only way to get accurate statistics is to separate content from search.
It’s normal to expect lower clicks and lower conversion rates in content advertising. However, that gap is decreasing.
The separation provides much more insight into what is working, and more importantly what is not working. Plus, it allows marketers to create unique creative for these different websites.
It was a mistake for the search engines to have ever positioned this type of advertising as search. It never was and should not have been bundled with search. However, as mentioned, content advertising has come a long way. I was definitely against it, but now I am a believer.
** Find more articles from John W Ellis at http://www.johnwellis.com/

