The Long Tail
Wired magazine editor, Chris Anderson, expanded his article about an internet marketing phenomena that he calls “The Long Tail” into a book by the same name. In it he describes a new rule regarding marketing, particularly entertainment marketing. In the past, “hits” drove the marketing efforts of CDs, movies, and books. Shelf space was at a premium in brick and mortar stores, and specific sales revenues had to be achieved in order to justify carrying a particular title. With the availability of online marketing that has changed significantly.
He presents the question, “What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell each month? Most people will guess 20 percent, based on the time-tested 80-20 rule. (20 percent of the offerings will provide 80 percent of the revenue) In reality, though, the answer is 99%.
It turns out that the “non-hits” also bring in a lot of money when they are available. People will rent obscure videos, buy obscure music, and otherwise take advantage of the diversity the internet provides.
Anderson notes that more than half of Amazon’s book sales come from outside its top 130,000 titles. That is direct evidence of the long tail, the niche markets that drive the current entertainment industry. The value of the “non-hits” can be even greater than the income from the “hits—totally new phenomena.
Some of the most successful internet companies are those that aggregate, or attempt to make sense of, the proliferation of online offerings. Examples of this are Google, Netflix, Amazon, eBay, and Rhapsody.
As to how much this effect applies to non-entertainment online sales, there are differing views. Niche marketing has long been thought to be a driving factor in web marketing in general. Relatively easy and inexpensive access to shoppers all over the world, the availability of the aggregators and other online tools certainly make niche marketing more possible than it ever has been in the past.
How can you benefit from the marketing niches? Can you expand your offerings beyond what you formerly thought possible? Can you identify areas that are currently underserved and sell products and services that weren’t formerly marketable?
For more information about "The Long Tail" see Amazon.com or use your favorite search engine.
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