One of my obsessions is the Apollo space program. I enjoy meeting the astronauts at their speaking engagements and collecting signed first editions of their books. I also collect artifacts such as original press kits and media badges from the late 1960s and early 1970s launches, and my collection includes items flown in space like pieces of skin from spacecraft and spare rocket parts such as thruster motors and switches from the command module and lunar lander. Yes, I am a big-time space geek. And there are thousands of others like me. Before the web created micro-markets for virtually any business niche or quirky hobby, people were without information and places to do business. Not anymore. Yet while most content executives understand that there is now information available on the web on any topic, many are still unsure how to take advantage of the opportunity.
The phrase The Long Tail has gotten huge viral marketing juice since it was first used in a Wired magazine article by Chris Anderson in October 2004 (which he has turned into a book called The Long Tail: Why the future of business is selling less of more). These days, it seems impossible to not bump into talk of the long tail on the information industry conference circuit and on the blogs that cover our business—for good reason. Understanding the long tail is vitally important for executives at information businesses.
I had the pleasure of hearing Anderson speak at the SIIA Content Forum in San Francisco in May of this year. "I have a background in physics and economics, so I came at this analysis through data," Anderson said. He explained that companies like eBay, Amazon, Google, Netflix, and many others, have vast amounts of data on consumer behavior. "Drawing from the data, the bell curve was the twentieth century and the powerlaw curve is the twenty-first," Anderson said.
A powerlaw curve is downward sloping to the right and is much different from a bell curve. Before the web, marketers would aim squarely at the middle of the bell curve to sell large quantities of a product. Think People magazine, Madonna, or Tom Clancy. But the powerlaw curve says that there are many more people who are interested in reading esoteric topics (Apollo astronaut biographies) or who listen to specific music (Grateful Dead concert recordings). The web allows us to reach well-defined micro-markets for niche products.
Anderson says that endless consumer choice is creating unlimited demand so marketers need to understand how to reach the people who have specific demand for less popular things. For example, Netflix rents movies to people way out at the long end of the tail. There are more movies online at Netflix delivered via the post office than a retailer (even Wal-Mart) could possibly stock in its store. According to Anderson, "the average Blockbuster carries less than 3,000 DVDs, while Netflix is 60,000 titles." And while a large Barnes & Noble bookstore may stock 130,000 titles, there are millions of titles available on Amazon.com and more than half of Amazon.com's book sales come from outside its top 130,000 titles. Remarkable really: Amazon sells more books than a brick-and-mortar store stocks.
"The market for niches is anything but," says Anderson. Niche markets are big business, and targeting valuable niches will produce great companies and re-value archives of content. "Today's hit is tomorrow's niche." This concept has dramatic implications for content companies. In June I spoke at two specialized content conferences in Washington, D.C., in the same week: the annual meeting of the Society for Scholarly Publishing and the International Newsletter & Specialized Information Conference. While the attendees at both of these conferences are grappling with the changes that the web has brought to specialized information business, I have a sense that most niche publishers still haven't come to grips with what unlimited consumer choice means for doing business on the web.
Anderson says that Google is the classic long tail play because Google has finely sliced keywords to reach the long tail of demand, but Google also allows companies at the end of the tail to advertise when they could never afford to advertise before. Any company can now take the keywords and phrases that buyers enter to find products and create advertisements to reach those people directly. Cool.
So the next time I enter a search for, say, Apollo press pass, there will be smart marketers who will reach me and cause me to swiftly yank out my credit card. But for all the marketers who understand this business model, there are still countless specialized publishers who don't. Buy Anderson's book and study it—your very business is at stake.