To stand up against giants, new-age advertising platforms must go ‘vertical’
MOVING into the fourth industrial revolution means companies have access to all the data they could possibly want.
As a result, advertising is being transformed as well. Digital ad platform owners such as Google and Facebook who faced little to no competition in the past are seeing new-age AdTech platforms embrace a ‘vertical’ strategy to delight customers and steal market share.
Simply put, a vertical market is one that is attuned to the specialized needs of an industry and does not serve a broader market.
Google and Facebook, for example, are horizontal, where they sell products and solutions to every industry. Walmart, on the other hand, caters primarily to e-commerce and retail brands.
Going vertical has many benefits.
Firstly, those that work at vertical companies are specialists, highly skilled in their niche. This allows them to serve consumers in ways that generalists in horizontal markets can’t.
For example, horizontal companies often lose out in sectors that directly affect the purchasing power of a consumer, such as real estate, healthcare, and education. With strict regulations, it is also difficult for them to penetrate new industries.
Aside from this, specialists in vertical companies put the human factor back into their interactions with consumers. They have the unique advantage of being able to speak consumer lingo, offering empathy in a way that generalists can’t.
Data is all around us today. However, not all are of use. With this being said, many horizontal companies possess a fair bit of offline and client data, which they are unable to harnessing for value.
Vertical companies, on the other hand, possess unique data. These are invaluable as certain industries lack online data that can boost targeted ad campaigns or predict consumer behavior.
Because verticals are so niche, they can write ad-targeting algorithms that are unique to their product.
These would already have factored in crucial aspects, such as a customer’s unique behavior and thought patterns when deciding if they should purchase the product.
Such intricacies are important. When the tech in use, whether it’s an analytics screen or a media buying dashboard, can relate to customers with endemic language and visualization, the chances of them buying increase exponentially.
Vertical and horizontal advertising platforms are ultimately built on top of each other.
Horizontal ad platforms can offer vertical partners a mix of integration, investment, and support. On the other hand, vertical players can offer horizontal companies new revenue streams from markets that are challenging to penetrate.
Fundamentally, such collaborations will benefit all parties involved, allowing advertising platforms to better serve businesses and consumers alike.