There’s been some buzz now for a few months over Vertical ad-networks coming into the industry and the impact that they will create. It was , too obvious, that there will eventually be a confrontation between the networks already established in the Indian market ( read : Horizontal) and the new kids on the block like Webchutney’s Go-Sindbad and Divanation and it would only be a matter of time before the industry starts debating with respect to the pro’s and con’s of both , and media planners wonder which ones to go for.
For me , surprisingly i should add , it appears to be rather simple. The major driving force behind the argument for Vertical networks is that they contain sites which are similar in terms of what they are catering to i.e travel , the sites included in such a network would cater to hotels , air fares, train bookings etc etc , each with an individual objective but related to a larger singular category – the assumption being that such a vertical will thus offer the best exposure to a travel related advertiser given the relevancy which exists and since its so relevant , advertisers in turn would pay a premium which consequently would drive up eCPM’s for the publishers and everyone’s happy.
Sounds good for everyone , but unfortunately that’s not they way its necessarily going to work for a few reasons in my opinion.
1. What is so different between a vertical network and a horizontal network offering the same channel with equatable strength ? In some ways, a specialized channel for a horizontal is nothing but a vertical network in itself. All that a Horizontal needs to ensure is channel targeting and then add further targeting options.
2. The chances of media planners having heard of Tier 2 & 3 publishers is small , they would primarily deal with Anchor publishers in each category. Why would they then , or should, incur a premium for sites they are not aware of and which can be supplied by a horizontal as well. The chances of the site being with other netoworks is big because inherently if they are Tier 2 & 3 , networks would be their only source of income and they would not be talking to agencies directly anyway.
3. In relation to India , Anchor publishers might not sell to networks to begin , atleast not at network rates, with like Makemytrip , Flightraja , Cleartrip etc. The vertical network thus will primarily be built up of tier 2 and long tail guys , which takes us back to point 2 above. There is also the added risk , that if one of the Anchor site’s reaches out to agencies directly , budgetary allotments will see a change. Would not a media planner rather have the security of an Anchor than 10 long tail guys..?
4. Its been argued here at Alootechie by Mohit Maheshwari that Horizontals might not have the resources to really do something special for their publishers , along the lines of business consulting , online marketing etc. The fact of the matter is that this is probably not being done because they fail to see a need rather than them not having resources. Speaking from personal experience , it does not take that much time or resources to handle a group of publishers or for that matter multiple channels……nor does it take that long to incorporate them.
5. Finally , we are all still learning , we are still trying to understand how the user behaves the way he or she does and its not an easy task. Trends emerging in the US & UK are at best , in my opinion , reflective of what MAY happen , not of what WILL. I have a classic example i can quote in this regard – Komli recently release a study conducted by them where they state that one of the best ways to reach out to the Technology audience is through Social Networks.
For a vertical network operating in this space , this comes as quite a punch – that the relevant audience is beyond the list of sites they have with them as well – It kills any differentiation that they have , their USP so to speak. A technology site or network will have very high CPM’s , in the hundreds , while Social Networking inventory is far cheaper – Thus not only is the audience available elsewhere , its available far far cheaper – which Media planner is not going to consider that??
And the worst part is , that verticals have no choice but to loose their budgets to someone who can supply them with Social Network inventory – A Horizontal on the other hand will , in all probability , have that inventory available with them anyway and can thus offer both tech inventory as well as SN inventory and the billings might move from one channel to another internally but at the end of the day they dont go out of the company.