The AI Leap in Contextual Advertising: Delivering Ad Relevance in a Privacy-First Era

This research examines how AI-driven contextual advertising influences consumer responses through ad format, placement, semantic congruence, and involvement. Across four studies, this research tests how contextual design elements shape perceived ad value, contextual awareness, brand attitudes, and behavioral intentions without behavioral targeting. Study 1 (N = 309) shows that animated video ads generate higher ad perceptions, brand attitudes, and purchase intentions than static ads. Study 2 (N = 308) finds that in-article ads outperform other ad placements in shaping attitudes and intentions. Study 3 (N = 318) demonstrates that semantically congruent ads enhance attitudes and intentions, with intrusiveness weakening and ad-self congruence strengthening the attitude–intention relationship. Study 4 (N = 314) shows that high-involvement product categories elicit stronger brand attitudes and intentions than low-involvement categories, with perceived ad value and context awareness as mediating mechanisms. Collectively, findings extend persuasion knowledge and distinctiveness theories by showing that congruence requires perceptual distinctiveness, emphasizing contextual integration over behavioral profiling. For promotion management, findings provide actionable insights for designing AI-enabled contextual campaigns that enhance effectiveness while meeting growing privacy and regulatory constraints.