Topic Targeting allows you to place AdWords Advertisements on website pages relating to those topics. There is no limit to the topics, they could be anything from agriculture to computer programming, to sports, or something completely different. Topic targeting ads are only eligible to appear in the Display Network with related content. Since web pages are constantly revising and changing their content, the locations which you advertisements appear can also change. Additionally, you can also use topic targeting in combination with individual placements and keyword targeting.
Certain keywords have different meanings for different users. Many times words are used for different intents in completely different topics. When topic targeting is used in combination with keywords you can refine your ad environment so your ads are shown in the correct context, to the correct target audience.
Using placements and keywords is a great way to generate traffic, however, keywords can often narrow your search results too much because of Google's theme matching. This is where topic targeting proves to be extremely beneficial. Using placements in combination with topics can help find a larger relevant audience than keywords.
Remarketing is an incredibly effective way to encourage people to revisit your website. Unfortunately, there are many instances where visitors are retargeted when they have no intention of buying. They might have previously visited your website because a friend told them too. This can lead to inflated impressions with very few click-throughs. Combining remarketing with topics can help target users when they are researching a product and visit a website about your topics. Therefore they are not shown ads every time they visit a page on the Display Network. This will help you get a more accurate impression, engagement, and conversion metrics.
Pricing works the same way for topic targeting as other placement-targeted ads. You select a maximum amount you're willing to pay each time your ad appears. Adwords will display your ad on pages with relevant content where you can win a position based on your max bid. Popular topics with a high maximum bid have potential to appear on thousands of web pages.