Ad Nets Focus: The New Vertical Is Horizontal

Don't assume you need a vertical ad network to reach vertical audiences

Vertical ad networks once promised deeper service based on transparency, so-called "expert" knowledge of niche audiences, and a more effective way to reach users than the big horizontal networks. But have they delivered?
Vertical ad networks were formed out of an increased need for marketers to appeal to specific content-based audiences, such as travel, finance and technology. Comprised of mono-content niche sites, vertical networks were able to deliver to targeted, content-based audiences, but unfortunately at the cost of reach and scale.

On the other end of the spectrum, reach is no problem for horizontal ad networks. With hundreds or thousands of sites, horizontal ad networks put a campaign in front of millions at scale, yet traditionally had trouble extending that scale to reach targeted audiences. So how do marketers get the best of both worlds? Apply a vertical approach to a horizontal network.

Looking closely at the anatomy of horizontal networks, you see that they can offer the same advantages as a vertical network. Horizontal networks are collections of sites, organized by content or audience into different channels that correspond to a vertical, such as automotive or auto enthusiasts. In essence, horizontal ad networks can be viewed as a collection of many vertical networks. However, horizontal ad networks also have several advantages that vertical networks do not - most importantly scale and reach.

Now both horizontal and vertical networks can reach niche audiences through a mixture of content-relevant sites and targeting options. However, differences between the two start to show when advertisers want to target or retarget users. Because vertical networks are collections of sites focused on one particular subject, when they try to target and retarget users across their network, they are only reaching those who visit sites focused on that single topic. When horizontal networks target and retarget users, they can reach audiences visiting sites focused on a particular subject, but can also follow them to sites with other content. That is the advantage of not being a mono-content network. Horizontal networks fundamentally have more places online to target and retarget users, resulting in higher engagement rates and better performance metrics.

To illustrate the importance of this, consider a laptop manufacturer and its advertising strategy. The manufacturer could use a technology-focused vertical network to reach technology enthusiasts, and retarget those who visited the site to drive higher engagement. Since vertical networks only work with mono-content sites, however, they can only retarget users as long as they stay on technology-focused sites in their network. With consumers searching for news and reviews, price comparisons, and generally going where they want online, this vertical network strategy is self-defeating.

A horizontal network could deliver the same niche audience through a targeted technology channel, or target laptop enthusiasts on laptop- or technology-oriented sites, just like a vertical network. However, laptop enthusiasts aren't just tech heads. They are also business people, homeowners, students and more. Laptop users aren't limited to tech-oriented sites. While these audiences are inaccessible to vertical networks, horizontal networks, by virtue of their reach and scale, can target them wherever they surf. The same goes for retargeting consumers who have visited the laptop manufacturer's site. Consumers have many different interests, and will roam at will on the Internet. By applying a vertical approach to a horizontal network, advertisers can ensure that they are where their audience is, regardless of context.

Recommend (7) Print RSS
1 comment about "Ad Nets Focus: The New Vertical Is Horizontal".
  1. Andrew Fischer from Choozle , February 5, 2010 at 11:32 a.m.

    I generally agree with the position of this article: horizontal networks offer reach, and vertical networks provide niche targeting. And it may also be true that horizontal networks can offer advantages in regards to retargeting due to their overall size. However, this article fails to address one of the most important reasons that brands and media buyers utilize targeted/vertical networks: transparency and trust. Most leading brands don’t only care about targeting the right consumers, but also about WHERE they are reaching them. For example, a particular wine brand may want to target a “wine enthusiast" on high quality sites in order to showcase their newest line of Merlot to the enthusiast. However, they likely don’t want to re-target that same “wine enthusiast” on an irrelevant and/or "questionable" tier 3 couponing site. Thus, discriminating brands will always invest ad dollars on high-quality, transparent networks where they can achieve their targeting/audience goals, but also ensure their brand will only be associated with premium sites and relevant content. A handful of vertical networks (ahem, like our firm RGM Alliance, for example) strive to make life easy for brands and their agencies – we provide results by reaching their target audience (including behavioral and retargeting across our 43 mm unique users), but always doing so in an environment they can trust, and across sites that fit their brand (www.rgmalliance.com).