Would you buy sushi at a gas station? Why businesses should look for vertical-focused service providers

Do you remember the Esurance gas station sushi spot which highlighted the dangers of buying from non-specialists? Its basic premise is that ‘cheap is good, sushi is good, but cheap sushi is bad’.

You can think of lots of questions like this, like would you let your drycleaner operate on you? The much sought after ability to turn data into actionable insights is far easier when the data, technology and people involved operate from a place of deep vertical expertise. Within the noisy Lumascape many companies are promising to do everything for every partner, which is questionable, at best.

History has shown us that sometimes the real value lies in deep vertical sector knowledge rather than broad, generalised insight. In publishing, tech specialists of the past like Ziff Davis and modern success stories like Skift in travel have owned their respective vertical sectors.

> See also: Service providers hold the key to their success in the digital era – Gartner

In consulting, specialists are building aggressive share at the expense of general purpose consulting practices. Even in software, vertical plays in areas like retail and accounting have created huge value from vertical ownership of specific market sectors.

What is it that has made verticality work so well?  For one, it’s obviously about a level of industry knowledge and understanding that a general player cannot match.

Whether you read content on Bugatti vs. Ferrari or choose an accounting software, the minds behind those offerings should understand the market as an insider, not as an outsider looking in. Secondly, it’s about market relationships. For example, a retail specialist software developer that knows the other players in the ecosystem in depth will help them to build better products.

In data driven marketing, the power of verticality is imposing itself on a market where many have taken a generalist approach.

The fact is that, in marketing technology, access to high quality data is key to success and advertisers are becoming ever more demanding in terms of the accuracy and depth of data about the users that they’re targeting and seeking insights on.

The aggregated, third party data that underpins many generalist offerings is simply no longer fit for purpose in a world where transparency and accountability are seen as essential.

> See also: Why we need to be reevaluating the role of marketing in IT investment

What marketers need are actionable insights based on high-quality, first party data without bias.  When you only care about the volume and breadth of data that you’re collecting then quality necessarily takes a second place.

Once you’ve got that data, it’s about understanding that advertising technology is not the same in every market – there are differences in audience, product, pricing, consumer life cycle, targeting, seasons and even terminology that can make the difference between a product that works well for a consumer and one that confuses and frustrates them.

In reality, only a very focused vertical player is going to have the depth of knowledge and quality of relationships that can make these things happen. The secret to turning big data into great customer relationships and big profit is about not buying sushi in a gas station!

Sourced from Elizabeth Harz, CMO, ADARA

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics