It is a daily occurrence to be bombarded with ads any time you go anywhere online.

The ads look at the pages you’ve been looking at and try to determine your interests and show you relevant ads. After all, you’re more likely to spend money on something you’re interested in. The benefit for advertisers has to be weighed against privacy concerns. Owing to the huge success of various contextual advertising programs, the future is only going to be filled with even more ads based on your preferences. But this everyday event was not so common less than 15 years ago.

Contextual advertising is the process of examining a user’s search preferences and the content of the page they are viewing in order to show ads relevant to them. While this was available as early as the mid ’90s, Google’s AdWords service, released in the early 2000s, is the first major example. Its popularity skyrocketed, partly because it allows small sites to receive ad revenue or advertise themselves. Online advertising now makes up a very significant portion of all advertising in the United States and continues to grow incredibly fast.

The open nature of the Internet as well as the ability to access huge amounts of data has made contextual advertising possible and its impact online has been huge. Could the future bring this type of advertising offline as well? This seems very likely in the realm of television advertisement, a market traditionally accessible only to very large companies able to afford the cost of a commercial time slot. If some type of preference tracking system could be implemented for TV, then it would be possible to display ads based on a specific household’s viewing preferences. More targeted ads means less advertising is needed, and less cost for smaller advertisers.

Print advertisement, at least in the future, could be tapped as well. Look at MINI Cooper’s billboard that allowed MINI owners to change what the billboard said when they drove by as well as Esquire Magazine’s flashing e-paper cover. E-paper is a display technology that has incredibly low power consumption and size, allowing it to appear like paper but display flashing or slowly moving text and images. While both the cost and feasibility for wide-scale use of printed contextual advertising is prohibitive now, it seems that it will only be a matter of time before this becomes commonplace.

In some sense, the biggest concern with contextual advertising like this is privacy. What happens to all of this preference data, and who stores it? Is tracking everything someone does online ethical? If everything you do is tracked and stored in some database, it’s obvious that you are no longer anonymous online. But on the other side, this allows people like bloggers and other small publishers to be paid for the time and effort they invest on their Web sites and gives small companies a chance to sell their products to the people who would be most interested in buying them.

Contextual tracking takes place not only in advertising, though. Just take a look at Apple’s Genius or Amazon’s Just for You feature, both of which recommend products they think you’d like to buy. As we move forward, contextual advertising will likely become a bigger part of advertising as a whole.