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07.03.08 The Myth Of Investing In The Long Tail  By
Chris "Silver" Smith 
A Wall Street Journal Article yesterday cites a study by Anita Elberse, a marketing professor at Harvard's business school, entitled, "Should You Invest in the Long Tail?", which finds evidence that in the online world, consumers gravitate towards the most-popular items just as in the offline world.
The Long Tail, if you don't already know, refers to a theory promoted by a book by Chris Anderson titled "The Long Tail", which describes a sort of niche strategy of business, such as employed by Amazon.com or Netflix, that sell a large number of unique items in relatively small quantities. The idea is that while you can obviously sell large numbers of a few popular items (the "head"), the cumulative, smaller number of sales of all your many less-popular items (the "tail") might easily add up to a far greater total amount. 
"Head" items shown in red, "Tail" items shown in blue Here at Netconcepts, we've been promoting the Long Tail concept in relation to natural search marketing for quite some time, since we've witnessed how its application can directly improve a business's overall sales numbers. Indeed, businesses often get the most sales per item for their most popular products, but those products are also often the most competed on the internet, and sometimes the hardest to promote as a result. Even in the cases of top online retailers, we've seen that greater bulks of traffic and associated sales may often come from the bulk of less-popular Tail products.
Elberse's findings are based only on a limited study of music and home-video sales, so it seems quite possible that her study might be true only for the companies and industries from which her data originated. At the end of the day, theory is all well and good, but actual sales figures are far more important. Netconcepts has working formulas, methodologies and software (GravityStream) which have worked time and again to help improve internet retail sites' traffic and associated sales. The Long Tail approach has definite applications for Search Engine Optimization ("SEO"), and understanding the concept and making use of it in a search marketing plan effectively will result in increased profits. For more information on how the Long Tail can positively influence online business, read our white paper, "Chasing the Long Tail of Natural Search". (See also mentions of this study by Greg Sterling and Rafe Colburn.) Comments About the Author: Chris formerly headed up the Advanced Technology Department for Verizon Superpages.com (later spun off under Idearc Media), where he worked for ten years, specializing in patent-pending work in mapping, local search, analytics, and SEO. As the natural search optimization expert for Idearc, he founded and chaired the company's SEO Council. Chris is currently a Lead Search Strategist for Netconcepts, a search optimization firm. Chris is a regular columnist for Search Engine Land, covering the 'local search' beat. He also blogs for Natural Search Blog, and speaks at industry conferences such as Search Engine Strategies. |
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