marketing

What is horizontal and vertical marketing

in Marketing on 23rd July 2020

And which is right for your company

Most companies these days are aware of the importance of marketing and advertising. In the digital age, the need to promote and market your company has never been greater – to give you a competitive edge and maintain the prominence of your company.

However, with so many marketing channels available to you, it can often seem overwhelming trying to decide which promotions strategy is right for you and your company.

The internet has given rise to entirely new ways of promoting companies – whether that be through websites, email campaigns, social media, online streaming video, interactive chatbots – the list goes on. There is a dizzying array of marketing tools at your disposal.

Not only has the internet increased the range and scope of marketing methods, but it has also brought about differences between the ways these new methods are used. New and inventive marketing techniques and theories are emerging all the time. 

Different models, different strategies

One good example of this (and one many business owners aren’t aware of) is the subtle difference between two different types of marketing strategy – horizontal marketing and vertical marketing. 

Surely, marketing is just marketing, right? Well, yes and no. As markets become more complicated – and audiences become increasingly more sophisticated – so new strategies have started emerging. In the complex world of marketing, one size no more extended fits all. These days, you don’t just have to choose which marketing channel is right for your company – you also have to decide how best to use those channels.

What is vertical marketing/advertising?

In essence, vertical marketing is intended to promote your company to a specific market sector. In many ways, you could consider vertical marketing almost like niche marketing – highly targeted, aimed at a largely homogenous market of specific and distinct groups.

Examples of vertical marketing can be seen in healthcare, real estate, and insurance, where advertisers aim to attract very specific market sectors and individuals. Consequently, vertical advertising/marketing tends to be extremely direct and highly specific – to the point, it would have little or no effect on any other market outside the target demographic. 

For example, an advertising campaign devised for a specialized piece of healthcare equipment will work well within the healthcare sector. However, it will mean nothing to anyone that does not work in that area. 

While the intended market may be limited, the effects of vertical marketing can be highly successful – though this approach can put considerable strain and pressure on the importance of customer relations. Companies working to a vertical marketing structure often end up extremely reliant upon individual customers and can leave themselves very exposed to market volatilities or uncertainties.

Due to the nature of vertical marketing, campaigns will often be designed with specific channels in mind – for example, particular trade publications, industry newspapers, specialized websites, or highly targeted social media campaigns. However, by focusing on such specific groups, the results can be dramatic. 

What is horizontal marketing/advertising?

In contrast, horizontal marketing, and advertising aim to appeal to a much more extensive range of clients, across an equally wide range of industry sectors. The target audiences may or may not share common interests – they may or may not be in the same geographical location – they may or may not work within the same industry sectors. The key is, they should all have a desire for the product or service on offer.

Horizontal marketing is, by nature, far more generic and less restricted by company type or industry sector. Horizontal marketing has a much broader clientele – and therefore requires more ingenuity and sophistication on the part of the marketing company to find a cross-board message which works across all sectors.

Horizontal marketing tends to be used by companies that offer a standard or general type of product, one that isn’t solely dependent on specialized sectors but rather has a wide range of potential uses and customers.

As horizontal marketing has such a potentially extensive marketplace, campaigns designed for this style of marketing will frequently feature in mass media outlets – for example, television advertising, radio campaigns, general online advertising, and non-specific social media campaigns. Advertising networks are also likely to be used, for example, Google AdWords, to reach the maximum number of people as efficiently as possible.

The challenge in horizontal marketing is to identify specific characteristics of a product that will appeal to the broadest range of different demographics. 

An excellent example of this can often be seen in adverts for family cars, where advertisers often try to appeal to the widest sections of the family unit. For example, a car might be shown in the typical school run setting – followed by a shot showing the parents out on a family drive – then followed perhaps by a view of the father driving to a football game with his friends.

Even though the advert is effectively promoting and selling the same vehicle, the advertising attempts to target specific users of the car, making it all appealing to all.

It’s for this reason that, in many ways, horizontal advertising needs to be more creative and inventive and its approach. Likewise, it may also be more creative in the choice of channels used to reach each audience.

Which is right for your company – horizontal marketing or vertical marketing?

You need to ask yourself who your product appeals to and what its markets are likely to be. If your company operates in a highly specialized sector or produces specific or tailored products, chances are a vertical marketing approach that will work best for you.

Alternatively, if your product or service appeals to a far broader and more diverse consumer base, horizontal marketing may yield better results. In some cases, you may find you can use both – though you will probably find one outperforms the other.

Trial and error may be the answer to narrow down the approach you take. For the best results, you may want to consider a vertical agency that also has skills in horizontal marketing – to properly test and evaluate both approaches. 

Competing in a global marketplace

Because of the global nature of the internet, there’s every chance your company is now virtually pitching against thousands of others in your particular market sector. As geographic proximity has become less and less important over the years, clients have started to place less emphasis on proximity – more on the perceived value gained through using a product or service.

Do a Google search on your industry sector and, depending on the approach taken by your competitors, you may well find their websites appear higher in search engines or have a more significant social media following than you do. This can apply locally, nationally, or internationally. It makes little difference – if a company has invested in its marketing, it will likely appear higher than you. 

The discipline of marketing has grown exponentially over the last few years, and its importance to your company’s success cannot be underestimated. With a little trial and error, you should be able to ascertain the approach and channels that work best for you.

Categories: Marketing

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