What is the difference between horizontal and vertical marketing?
Often broad market segments are described as “horizontal” market segments that are made up of vertical and now, micro-vertical segments.
Horizontal Marketing Defined
Horizontal marketing refers to a strategic approach where companies target a wide range of customer segments within a particular industry or sector. Instead of focusing on a specific niche or vertical market, horizontal marketing involves diversifying products or services to appeal to a broader audience across different sectors. The goal is to leverage existing capabilities and solutions to meet the varied needs of customers within a given industry. This approach often involves adapting and customizing offerings to cater to the diverse requirements of different businesses operating horizontally within the same market.
Based on our experience, companies adopting horizontal marketing may develop versatile products or services that can be easily integrated into various business environments. This adaptability allows them to capture a larger share of the market by addressing the distinct challenges and preferences of different customer segments. By offering solutions that are applicable across multiple sectors, companies engaging in horizontal marketing aim to maximize their reach and impact within a specific industry.
Vertical Marketing Defined
On the other hand, vertical marketing refers to a strategic approach where companies focus their products or services on a specific sub-sector. Rather than targeting a broad market, vertical marketing involves tailoring offerings to meet the unique needs and requirements of a particular market subsector. This strategy is characterized by a deep understanding of the specific challenges, regulations, and trends within a targeted sector.
While horizontal marketing achieves this to some degree, vertical marketing really takes it to the next level. Vertical marketing is about precision and specialization. By aligning products and services closely with the unique characteristics of a specific sub-sector, companies can deliver tailored solutions that resonate with the target audience. This approach often leads to increased conversion, as businesses in the chosen vertical perceive the company as a reliable partner with a deep understanding of their specific needs.
How about some examples to demonstrate the difference between horizontal and vertical audiences?
Horizontal vs. Vertical Marketing Segmentation Examples
| Market | NAICS Code | Segmentation |
| Manufacturing | 31-33 (Sector) | Horizontal |
| Food | 311 (Subsector) | Vertical |
| Chocolate confections | 31135 (Industry) | Micro-Vertical |
| Market | NAICS Code | Segmentation |
| Wholesale trade | 42 (Sector) | Horizontal |
| Wholesale vehicle parts | 4231 (Subsector) | Vertical |
| Wholesale tires | 423130 (Industry) | Micro-Vertical |
| Market | NAICS Code | Segmentation |
| Retail trade | 44-45 (Sector) | Horizontal |
| Clothing stores | 448 (Subsector) | Vertical |
| Men’s clothing stores | 448110 (Industry) | Micro-Vertical |
| Market | NAICS Code | Segmentation |
| Professional services | 54 (Sector) | Horizontal |
| CPA firms | 541211 (Subsector) | Vertical |
| Tax preparation | 541213 (Industry) | Micro-Vertical |
| Market | NAICS Code | Segmentation |
| Construction | 23 (Sector) | Horizontal |
| Residential construction | 2371 (Subsector) | Vertical |
| Concrete contractors | 238110 (Industry) | Micro-Vertical |
To ensure success, brands or marketers should target horziontal or vertical markets that leverage past experience, and ideally, proprietary skills or intellectual property (IP), that is difficult to replicate.
Such experience, skills, or IP lend themselves to a case study and/or a testimonial, which is critical. Of course this is not always possible, so brands may be able to leverage vendor experience, IP or case studies as an option. Other keys to horizontal or marketing success are market size, market infrastructure, and decision-making process.
Horizontal vs. Vertical Marketing Messaging Examples
Now that we have shared how your horizontal or vertical marketing segments can be broken down, let’s get into how your marketing message could be applied. Here is a real-life example from on of our clients.
This client is a leading enterprise resource planning (ERP) VAR who targets a number of horizontal/vertical/micro-vertical segments.
Manufacturing Horizontal Messaging
“The manufacturing environment is all about orchestration. The right materials need to be ready at the right times, assembled in the right way. From here, you need to get these products to your customers. Knowing this, nearly everything about your business is unique, having significantly different approaches to sourcing, order management, manufacturing operations, logistics than anyone else in your industry.
As you work to compete with other manufacturers across the street and around the world, your success is built on quality, cost, and reliability. But success is more than just the things that make you a manufacturer. You need to succeed as a business.
To do this, companies like yours are turning to enterprise resource planning software to connect the entire organization and deliver on the demands placed by customers and competition.”
Above is the messaging for the manufacturing horizontal. Now, let’s take that a step further for their vertical focus in food and beverage. It is the same solution, but this expands on the “manufacturing” messaging with unique and tailored points for food and beverage.
Food and Beverage Vertical Messaging
“Food and beverage is all about orchestration. For manufacturers, this means combining or processing ingredients into a beloved or needed product ready for use, for distributors, this means bringing the orders and shipping them.
However, the ability to track every single ingredient that goes into a product, into an order, and into a shipment is literally a matter of life and death, you need visibility and control over every single lot of inventory at your business—and you need it fast.
ERP software designed for the highly regulated product-based business delivers this, helping you to understand, document, and control everything—sanitation practices, documentation of food safety plans, material and ingredient traceability, and more.
For food and beverage companies, who need a complete view over ingredients, inventory, and the entire supply chain, you need a solution that combines the supply chain and inventory visibility you need for food safety with the financial management, operations, and labor management controls needed by any business.
With the right business management solution, you can take control over everything the product-based business needs, and with the right help, you can have a software built for the unique challenges of the food and beverage industry”
Horizontal and Vertical Marketing Campaign Checklist
Whether you choose a horizontal or vertical marketing strategy will largely depend on your product/services and past experience, and ideally, proprietary skills or intellectual property (IP), that is difficult to replicate.
With that in mind, in order to be considered a subject matter expert (SME) in your horizontal or vertical, every campaign should include the following:
Landing Page
You need a top-level service or product page that is dedicated to the horizontal or vertical you are a targeting. It should speak to specific pain points of these prospects and include call-outs for some of the other items that are part of the campaign below. For example, a testimonial from a customer in that horizontal or vertical, case study, CTA to download an eBook, etc. In order to drive organic traffic to the landing page, consider SEO like the URL (ex: yourdomain.com/crm-software-for-construction), titles, and on-page content. This can be based on a keyword volume analysis – what are prospects actually searching for.
Case Study
Sure, telling a buyer what your business can do for them is important; but it’s also important to prove that your words are more than just words. Case studies are a great form of proof that tells a potential customer what your business has already done in a compelling way. It also gives a customer a better sense of what can be accomplished for them and establishes a level of credibility and trustworthiness. Imagine reading a case study from someone in your exact same horizontal or vertical – way more powerful than a generic one!
Content/Blogs
For both horizontal and vertical marketing, the creation of engaging blog content is imperative to further establish a strong online presence and effectively communicate with your target audience. This allows you to cover more important topics important to your audience beyond your top-level landing page above. Consider the yourdomain.com/crm-software-for-construction example above, blog topics could cover a wider range of topics like:
- The Role of CRM in Enhancing Client Relationships in the Construction Industry
- Maximizing Collaboration: CRM Tools for Construction Team Communication
- How CRM Technology is Shaping the Future of Construction Management
All blogs should link back to that yourdomain.com/crm-software-for-construction for authority and conversion. Use blogs in your horizontal or vertical marketing drip campaigns for a nice nurture touch point as well.
Downloadable/Lead Gen Content: Whitepaper or eBook
In our experience, incorporating downloadable eBooks or white papers is crucial for both horizontal and vertical marketing campaigns as they serve as valuable assets for lead generation and as a conversion point for many top of the funnel prospets.
Which would you rather register for? A free consultation or to download an eBook called, “Choosing the Right CRM for Construction: A Comprehensive Guide”
Offering a strategic, high-value piece of content like an eBook is a great way to generate leads.
Video
Taking the previous content pieces a step further, videos have the unique ability to capture attention quickly, communicate complex concepts effectively, and evoke emotional responses, making them powerful tools for conveying a brand’s message and value proposition for a given horizontal or vertical.
Videos can delve into industry-specific challenges, solutions, and case studies, demonstrating a deep understanding of the horizontal or vertical. Consider hosting live webinars as well!
Prospect List
With your landing page and content in place, the goal is to drive some organic traffic to your horizontal and vertical product or service. In our experience, searchers tend to be more middle or bottom of the funnel prospects as they have an identified need.
However, we think it is equally important to develop a list of prospects that meet your horizontal or vertical criteria, company size, job title, and so on. Then, use your prospect list to outbound target with email drip campaigns, LinkedIn ads, and more to support your organic pipeline.
Modern Marketing Partners has developed a proprietary process for targed prospect list development that greatly benefits our clients.
Email + Drip Campaign
Now that you have a prospect list developed and inbound leads flowing in from your eBook, blogs, and more, integrating email and drip campaigns is indispensable for both horizontal and vertical marketing strategies as they facilitate targeted communication, relationship building, and lead nurturing.
Personalized email content can be tailored to address common pain points while showcasing the adaptability of products or services. In vertical marketing, where specificity is key, drip campaigns can delve into industry-specific nuances, delivering content that resonates deeply with the unique challenges and needs of the targeted sector. Email campaigns, when well-crafted, serve as a direct line of communication, keeping the audience informed, engaged, and fostering a sense of connection.
Also consider how email can be used differently across different stages in the buying process.
PPC Advertising
Finally, if budget allows we typically recommend a Google Search campaign to round out most horizontal and vertical marketing plans.
Leverage PPC to precisely target niche audiences within specific sectors, ensuring that ad spend is focused on the most relevant prospects. Also, PPC campaigns offer immediate visibility and measurable results, making them effective for generating leads and directing potential customers to tailored landing pages.
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