What is Vertical Marketing?

In vertical marketing, products and services are promoted within a specific industry – or “vertical” – as opposed to the general public or “mass market.” Each vertical is a well-defined industry, or set of enterprises, that develop and market similar products, generally in competition with one other. Vertical marketers sell goods and services within these verticals. Vertical marketing may also be known as niche marketing, and frequently overlaps with business to business (B2B) marketing.

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Examples of vertical markets include:

  • Automotive
  • Insurance
  • Banking
  • Real estate
  • Education
  • Energy
  • Heavy manufacturing
  • Oil and Gas
  • Food and beverage
  • Retail
  • Transportation
  • Telecommunications
  • Hospitals
  • Government

For example, a software company focused on producing database software solely for the retail sector is engaged in vertical marketing. A software company working on a database program like Excel is engaged in horizontal marketing, since the program can be used in a  variety of industries. Horizontal marketing – marketing to a set of customers across various industries – is considered the opposite of vertical marketing.

Advantages of vertical marketing compared to horizontal marketing may include enhanced credibility and brand recognition, messages that go further, a better return on investment, and less competition. However, vertical marketers need to demonstrate a deep understanding of their segment in order to convince clients about the benefits of their product.

In vertical marketing, subject area expertise needs to penetrate all aspects of the marketing mix (product, pricing, promotion, and place). In particular, marketing messages need to address how the product meets the specific needs of the vertical – how it will solve a common problem or ensure regulatory compliance, for example. Marketers also need to ensure that the sales force they work with is similarly comfortable with the vertical, and able to “talk the talk” during the selling process.

Industry newsletters, direct mail, trade shows, and trade magazines are often important components of vertical marketing.

The Bureau of Labor Statistics does not track data for vertical marketers as a specific role, but the agency does provide the following employment information about marketing managers:

  • 2011 median pay: $55.78 per hour, $116,010 annually
  • Education: 84% have a bachelor’s degree, 4% a high school degree, and 4% some college but no degree
  • Number of Jobs, 2010: 178,000 employees
  • Projected job growth rate 2010-20: 10% to 19% (average)