Contextual advertising

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Contextual advertising is the term applied to advertisements appearing on websites or other media, such as content displayed in mobile phones, where the advertisements are selected and served by automated systems based on the content displayed by the user.

Google AdSense was the first major contextual advertising program. It worked by providing webmasters with JavaScript code that, when inserted into web pages, called up relevant advertisements from the Google inventory of advertisers. The relevance was calculated by a separate Google bot that indexed the content of the page.

Since the advent of AdSense, the Yahoo! Publisher Network, Microsoft adCenter and others have been gearing up to make similar offering.

Contextual advertising has made a major impact on earnings of many websites. As the ads are more targeted they are more likely to get clicked, thus generating revenue for the owner of the website (and the server of the advertisement). A large part of Google's earnings are from their share of the contextual ads served on the millions of webpages running the Adsense program.