It is still on the edge of mainstream adoption, as our recent research project, sponsored by SAP, discovered. Companies are already collecting contextual information, the research found, but are still working on how to use it effectively to engage their customers.

Nevertheless, contextual marketing practices are sufficiently well established to speculate how they may evolve in future and what the implications will be for the marketing function.

Taking customer experience to the next level

One area of considerable potential impact is the customer experience. Today, not all marketers see this as their responsibility. But this is likely to change as companies realise that digital interactions are becoming a critical determinant of customers’ perception of their brand and therefore their willingness to spend.

Indeed, according to Gartner, an IT research company, 89% of companies plan to compete on customer experience by 2016. The marketing department, with its growing knowledge of technology and its innate customer focus, is well placed to lead this competition.

So why might contextual information impact the customer experience? Because a customer experience that reacts to a customer’s current context—such as location, mood or current behaviour—is more likely to engage that customer than one that is simply “personalised” to someone of his or her demographic profile.

To achieve a more complete customer experience, companies are working towards integrating on- and offline experiences, incorporating mobile technologies as well as consistent messaging across touchpoints and walking step by step with the customer throughout the buying journey—from awareness to post-sales support—in real time.

Diversity of data driving the evolution of contextual marketing

Many of the strategies and tactics that would take contextual marketers to the next level are still in their infancy, but in the future marketers will be able to almost get inside the head of their consumers, at the moment when they are most open to internalising the brand message.

The growing amount and variety of data and technology available to marketers will drive this development. Real-time data will allow brands to act on a consumer’s behaviour in the moment, such as creating a pop-up box on-screen to communicate a special offer for a customer spending time on the brand’s website. Location data (such as GPS or RFID), on the other hand, will enable action based on physical location to create touchpoints—for example, by sending coupons to a customer who is near a retail location.

Social data will also become more useful as marketers build on the trust customers already have with friends and family. For example, through the use of dark social—web traffic that is not attributed to a known source—brands will be able to see beyond shares and likes within social platforms, to track when consumers share links with each other via technologies such as text or email.

Mobile will continue its ascendency as a marketing tool, integrating search and mobile to make it easier for consumers to connect with a brand at any time and digitally engaging customers in-store.

With the help of the above, companies will begin to look more closely at the behaviour of partners and other stakeholders to understand the whole ecosystem that affects how customers perceive them. Using advanced data analytics, brands will be able to predict behaviour and tailor ads and offers to the moment when the customer is most open to receiving the message.

Contextual marketing is changing how brands relate to consumers, and this will continue to evolve as companies focus more and more on the whole customer experience. They will be able to capitalise on individual moments in the lives of consumers. And consumers will probably expect to be noticed, and to be delighted—all in real time. It seems that the way of the future will lie with brands that have the vision to innovate and create a more complete experience for their customers every step of the way.

To find out more about how west European chief marketing officers are using contextual marketing, click here to download an executive summary of the survey findings and here to read about west European retailers' perspective on contextual marketing.