Contextual advertising is advertising that targets the content of the page it is displayed on. For example, a page about cats could be targeted by cat food manufacturers.
This is as opposed to behavioural advertising, which is based on what the user visiting the page has been up to, or programmatic advertising which takes a lot of factors (such as user behaviour, trends of similar pages etc) into account.
It can be very effective and has the added bonus of not requiring any cookies to be dropped on a users computer.
Media.net is a popular contextual advertising ad network.
Glossary Index