Maybe you've heard about the The Long Tail. Maybe not. Whether you have or not, it may well be a factor in your future marketing efforts.
The phrase The Long Tail was first coined by Chris Anderson in his article of the same name which appeared in Wired magazine in 2004.
Anderson readily admits that the actual theory is not his. However, he's the guy who has taken a relatively obscure theory and made it easily identifiable, both in terms of what to call it and as to what its effect on marketing is.
The theory behind The Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits," e.g., hit movies and hit CDs, at the head of the demand curve, and moving toward an increasingly large number of niches in the tail.
Here is a graphical presentation of The Long Tail --
Maybe you're saying to yourself, "Yeah, so...?"
Here's the "so." With the advent of the Internet, the "Long Tail" portion of the graphic is proving to be near infinite, i.e., there is a near unlimited universe of niche markets that have previously gone largely untouched..
I'm going to ask you to follow me through a little Economics 101 to explain the graph and its importance.
The dark orange section, the "head" of the graph is representative of the "hits" in marketing. The big sellers. For example, this summer's movie hit is "Pirates of the Caribbean: Dead Man's Chest." If this were a graph of box office results, "Pirates" would be found squarely in the dark orange portion of the graph-- the head.
In fact, "Pirates" has actually taken in about one-third of box office receipts for the entire year, and that's in a universe of hundreds of movie releases.
As the tail extends out, sales volume decreases, meaning movies falling within the Long Tail section had fewer and fewer sales. Which usually translates into fewer and fewer profits. In fact, it frequently translates into losses.
Two points though. At one time, it was assumed that as the tail extended out, demand ended, or at least reached a point where there was insufficent demand to justify supply. That meant that if Widget "A" was a best seller, and Widget "X" was rarely sought after in stores, Widget "X" was not available. Sales were simply not enough to justify stocking Widget "X" for the occasional person who wanted it.
Pretty much classic supply and demand inventory and sales theory.
Stay with me now, we're getting to the good part.
But now, move forward into the Internet era. With the Internet, there is no need for a "bricks-and-mortar" store to sell products. An example would be a comparison of Blockbuster and Netflix. The average Blockbuster store carries about 3000 titles. And they've carefully determined which movies to carry, those being the ones that they can count on being rented and sold on a relatively regular basis.
If a DVD only rents a few times a quarter, it's not worth having it on the shelf, taking up space. So they don't carry it.
Contrast that with Netflix, which carries an inventory in excess of 15,000 titles. Netflix can set up a few warehouses scattered across the country, rather than having to have a store in thousands of neighborhoods. A huge cost savings right there.
Because its storage and distribution costs are so much lower than Blockbuster's, Netflix can afford to store that film that rents only a few times a quarter. It doesn't need a copy in a thousand different stores like Blockbuster does. It just needs a few copies to meet a relatively small demand.
And Netflix makes a profit off of that movie that Blockbuster doesn't carry, even though it rents only a few times per quarter.
The point?
Niche markets. The Long Tail graphically represents what Netflix, Amazon, E-Bay and thousands of other online marketers have shown-- there is a near infinite marketplace of niches out there. Find a niche and it can be profitable for a business on the Web where it might not even exist in the Bricks-and-Mortar world.
Because of these niche markets, online music services, line Rhapsody, have subcategories within subcategories of music downloads available. It costs Rhapsody next to nothing to store and offer obscure music. But a Bricks-and-Mortar retailer can't do it. The cost is just too great.
Rhapsody can afford to store a music download that may only be downloaded once a quarter, and still make money off of it. Admittedly, that single download isn't worth much, but multiply one download of thousands of obscure recordings per quarter, and you're talking serious money.
What The Long Tail shows us is that there are hundreds, thousands, maybe millions of niche markets waiting to be found and exploited. Before the Internet, these niches were non-existent or nearly non-existent.
And cumulatively, these niches represent a huge marketplace.
Which beings us to what all this has to do with Search Engine Marketing.
If you have a product or service you are selling on the Internet, examine it closely and determine if there is a niche market you may be missing. Is there some application of your product you haven't considered for which a niche market exists?
Are there prospects out there that you are missing because you haven't targeted them with your marketing?
Find a niche (or niches). Market to it. And profit.
Target those niches. Create additional websites for your product or service that aim squarely at those niches. Create a site and then focus your SEO and SEM efforts on attracting those niche prospects. There's no telling how many sales you might be missing out on because you are failing to reach niche prospects.
And if you need help doing this, you know who to call.
