Contextual inventory refers to the process of delivering targeted ads to users based on the content of the website or page they are currently visiting. Contextual advertising uses advanced algorithms to analyze the content of a page, including text, images, and other elements, to determine the most relevant ads to display to the user.

For example, if a user is visiting a website about cooking, a contextual advertising platform may display ads for kitchen appliances or cooking supplies. This allows advertisers to reach users with relevant ads in real-time, improving the chances of engagement and conversion.