Contextual advertising involves advertisements - usually text ads - which appear on the website and are based on the content displayed to the visitor. Contextual ads can be banner ads or text ads.
An automated system checks the site for keywords and shows text ads that are based on what the viewer sees. In other words, Contextual advertising enables advertisers to display their ads on websites with content that is related or relevant to the products and/or services they offer. This can be an effective form of advertising as this allows advertisers to reach their target audience.
The first contextual advertising program was AdSense by Google.