The Long Tail is the other half of the same chart we saw in an earlier Big Ideas article: the Pareto Principle. Vilfredo Pareto took an interest in the head of the chart, where a small number of people accounted for a huge proportion of wealth. In 2006, Chris Anderson published a book that looked at the huge number of products that form the remainder, when you exclude the few that account for the majority of sales.
How many categories of item does Amazon list? I found the statistic from January 2018 that:
Amazon lists more than 3 billion products across 11 marketplaces worldwide.
But most of their sales and revenue come from the top few highest performing goods in each category. A small number of books may sell thousands a month. But there are millions of books that rarely sell any in a given month… or year.
Why Does the Long Tail Matter?
Every publisher has a few blockbuster sellers (in its own terms). Even Management Pocketbooks. For some publishers, these cover the losses on their back-list. That has always been the way. And the bookshops have stocked only the best sellers in each category.
What has changed is the ability to build a bookshop the size of a giant warehouse. Now the public can get access to lists of millions of books.
What is The Long Tail?
The term ‘The Long Tail’ was coined by journalist, Chris Anderson, in 2004. He used the term to describe this part of the demand curve. But his insight was to notice that this long tail of niche products accounts for a much greater proportion of sales in Internet markets than they do through traditional bricks-and-mortar retailers.
And this is a trend that is growing, as a fascinating paper by Erik Brynjolfsson, Yu (Jeffrey) Hu, and Michael D. Smith shows.
Anderson first wrote about the Long Tail in Wired magazine (of which he was the editor). He later followed it up with a best-selling (top of the curve) book of the same name (US|UK). It’s now in a second edition (and Anderson now runs TED).
How to Harness the Long Tail
The big idea behind the Long Tail is that consumers are increasingly shifting their demand away from a small number of massively popular products and turning towards niche products (in the long tail).
This is opening up new market opportunities, which are possible because production, storage, and shipping costs have dropped massively, and IT can now manage vast inventory. The opportunity is consumer choice. So, businesses can adopt a long tail business strategy of selling low volumes of many hard-to-find items, instead of large volumes of a few popular items.
Impact on Advertising
There is a big impact on the advertising business, of course. With fewer sales going to the big marquee products, it’s harder for their manuacturers to make traditional advertising campaigns profitable.
Now, marketers must find out what niche interests a consumer has. And increasingly we hear about micro-niches. Soon, I suspect, we’ll hear of the nano-niche.
Long Tail Keywords
Of course, a huge amount of marketing now is about getting your product’s keywords to rank on search engines. And the same Long Tail effect applies here too. Only the biggest players have the authority to come near the top of a search page for a keyword like ‘books’ or ‘novel’. The rest of us need to scrabble around to rank for increasingly distant long tail keyword phrases, often with 4, 5, 6 or more words.
What is Your experience of The Long Tail?
We’d love to hear your experiences, ideas, and questions. Please leave them in the comments below.
To learn more, do take a look at the Wikipedia article on the Long Tail. I rarely recommend Wikipedia as a source for many reasons. But, in this case, the article seems to me to be particularly good. But, without doubt, Anderson’s book (US|UK) stands as one of the best examples of a business/big ideas book, alongside The Wisdom of Crowds (US|UK), The Tipping Point (US|UK), and The Paradox of Choice (US|UK) – which is an excellent counterpoint to the Long Tail.