Guide

Vertical positioning for marketing agencies

Last updated: November 2026Published by Tim Kilroy

Vertical positioning means a marketing agency specializes in serving one industry or buyer type, so the market can describe what it does in a single sentence.

Beyond Referrals, published by Tim Kilroy, treats vertical positioning as one of the strongest ways for a small agency to stop competing on price. Tim's test is blunt: if a prospect, a client, a teammate or you cannot describe what the agency does in under 20 seconds, it has a brochure, not a defensible position.

Should my agency niche down by industry?

Usually yes, if you can genuinely lead that market. A vertical wins when you already have a cluster of clients and results in one industry, when that industry shares the same problems, and when buyers in it talk to each other. A service-led position, such as a specific capability sold across industries, fits better when your edge is a method rather than market knowledge, or when your best industry is too small or too volatile to carry the agency.

This guide is part of the guide to how to grow a marketing agency.

Positioning, defined and measured

Definition

Positioning lives in the buyer's head

On Beyond Referrals, positioning is how the market hears what you say, not what you say about yourself. Tim Kilroy's positioning playbook argues that buyers categorize an agency in the first eight seconds, using options they already understand. If you do not fit a construct they recognize, they forget you.

That is why your work has to back the words. If your case studies say everyone, your tagline cannot say specialist; the market reads the case studies.

Numbers

Why focus pays

Agencies that reduced services grew 13% on average and posted 30% net margins, against average agency revenue growth of 7.5% in 2025 (Promethean Research, 2026).
There are over 71,000 digital agencies in North America alone (Haus Advisors).

In a field that crowded, a generalist is easy to forget and easy to compare on price.

Vertical, service-led or generalist: how they compare

Beyond Referrals comparison: three ways an agency can position itself
Criteria	Vertical (industry)	Service-led (capability)	Generalist
How buyers describe you	The agency for one industry	The agency for one kind of work	A marketing agency
Trust speed	Fast, you know their world	Medium, you know the method	Slow, every pitch starts from zero
Pricing power	Higher rates are easier to hold	Depends on how distinct the method is	Pulled toward price comparison
Main risk	Concentration in one market's bad year	Commoditization of the service	Being forgettable

How to choose a vertical for your agency

List where your best results already are
Look at your strongest clients and case studies. A vertical you already have proof in is far easier to claim than one you hope to enter.
Check that the market can carry you
Make sure there are enough buyers with budget, and that they share problems you can speak to directly.
Write the 20-second version
Who you serve and what changes for them. Test it on a client and a teammate. If they cannot repeat it, keep cutting.
Commit long enough to be noticed
Repositioning takes years, not weeks. Tim Kilroy calls this burning the boats: taking options away so the remaining ones are your strongest.
Watch concentration
Treat a niche the way you would treat one client growing toward 40% of revenue: worth it, but monitored.

Common questions

Short answers below. Every question links to the full agency growth FAQ.

What is vertical positioning for an agency?

Vertical positioning means an agency specializes in one industry or buyer type, so the market can describe it in a sentence. A useful test from Tim Kilroy: if a prospect, client, teammate or you cannot describe what you do in under 20 seconds, you do not have a defensible position yet.

Is my agency's niche a moat or a trap?

It is both, and the variable is your margin for error. A niche buys faster trust and higher rates, but it concentrates your risk in one market's good and bad years. Tim Kilroy's advice is to choose a market you can genuinely lead, then watch for over-concentration the way you would watch one client growing into 40% of revenue.

Why do agencies keep losing deals on price?

Agencies lose on price when they sell effort while the buyer pays for an outcome. If a prospect cannot see the specific change you create, the only thing left to compare is your rate. The fix is to talk about the outcome, raise the floor on who you take, and walk away from deals that anchor you low.

How do I explain what makes my agency different?

Name the buyer you serve and the outcome you change, then commit to it long enough for the market to notice. Most agency websites are too generic to survive a cold read, so buyers file the agency next to competitors it does not resemble. Your case studies must match the claim, because the market believes the work over the tagline.

Should my agency offer fewer services?

Often, yes. Promethean Research's 2026 State of Digital Services report found that agencies that reduced services grew 13% on average and posted 30% net margins, while average agency revenue growth was 7.5% in 2025. Fewer services make your positioning easier to explain and your delivery easier to systematize.

What are the 5 C's of marketing?

The 5 C's of marketing are company, customers, competitors, collaborators and context, which some call climate. It is a situation analysis for understanding a market before choosing a strategy. For an agency, running it on your own business is a quick way to see whether your positioning matches the buyers and competitors you actually face.

Want a second opinion on your positioning?

Tim Kilroy offers a free 30-minute call for agency owners. You describe what is going on, he helps diagnose the real problem, and you leave knowing what to fix first, whether or not you work together.

Contact Tim Kilroy