In other words, the ad system sees that you are viewing a page about travel, which it knows by having examined the words on the page or other factors. The system then delivers up in some fashion an ad that’s related to travel. That’s the “contextual” part of all this. The ad about travel fits the “context” or subject of the page.
Contextual advertising isn’t new to the world of online advertising, and it has existed since 2001. It has produced billions for online giants like Google and Yahoo but also increased the revenues for online publishers worldwide. However, it is still a flawed system (as you can see from the picture) – the whole process is automated and it is related strictly to meta words. The only chance for assuring a succesful contextual advertising system is merging it with top social networks like MySpace, Facebook, etc. where the system will better understand its users, their needs, search habbits, likes and dislikes, and serve them perfect ads – ads that they will click on.