The Long Tail of today’s Markets
from “The Long Tail” book 08/06 enhanced by Peter/CXO Wiz4biz
1. Are you “wired” for today’s Market? Some of us are familiar with the famous Wired magazine issue which had a cover story titled -The Long Tail. It was written by the editor of Wired magazine, Chris Anderson. The article became immensely popular among the Business & Geek communities, because it offered a simple framework by which the various forces that were shaping the internet market place. The author also started a Blog and I had managed to read quite a few of his posts. Given this background, I really did not want to read a full fledged book on “The Long Tail” which came out recently. But the fact that the entire framework, logic & examples would be at once useful in my marketing, was enough to lure me in to buying it. It turned out to be a No-Regrets decision.
2. The Long Tail of virtually unlimited choices. For the first time, I was reading a book whose content resonated with my taste of readings. Since there were a lot of known things that were used to explain Long Tail phenomenon, I just loved the book. Its so very different from a lot of marketing books that I have read recently. For example, the book “The Undercover Economist” by Tim Harford revolves around the principles of scarcity & incentives. But the Long Tail marketing forces thrive on the principle of “abundance” of virtually unlimited choices for consumers.
3. What is a Long Tail ? It is a collection of millions of micro-markets. It is complete contrast to the typical theory that “the most popular” drives markets & cultures. The types of goods sold in Long Tail Businesses are
· Physical Goods – eBay, Amazon, Craigs List
· Digital Goods – iTunes, GumRoad, FetchApp
· Info – Google, Wikipedia, WebMD, eHow, Mashable
· Community – FaceBook, MySpace, News Aggegators
· Advertising – Craigs List, Monster, ClassifiedAds.com
· Freelancer.com, Guru, eLance, Flex jobs
4. Three Forces have created the Long Tail”
1) Democratization of Production. – Consumers are now producers . The enabling tools like Garage in Mac, Bloggers, uTube, Wikis, etc are enabling people to be producers rather than only consumers
2) Democratization of Distribution – The cost of distribution of goods has become next to nothing for customers who order from a website
3) Aggregators – who match the Supply & Demand of goods or services: News [Huff Post, News 360], Goods [ShopZilla, Next Tag, Price Grabber, Social Media tools [FlipBoard, Glossi,
5. “Long Tail” Examples: The book then goes on to give many, many examples to explain the business model of the Long tail companies. Netflix, Amazon, Rhapsody, Mp3.com, Salesforce, Lego, Wikipedia, GarageBand in Mac, BitTorrent are a few cases which find a mention in the book. The marketing to customers with an exceedingly abundance to choices, is brought in each of the above cases and thus brings home the point, that traditional marketing theories are no longer useful in explaining today’s & the future’s Long Tail Markets.
6. Open Questions raised by the Long Tail book.
· Is more choice better or worse ?
· Does more content translate to more sales ?
· If the tail becomes longer, does it mean the shorter head ?
· In the “Long Tail”, is there a demand shift or an overall increase in demand ?
7. Conclusion. I am dead-sure that there will be many many more businesses that will follow the Long Tail marketing model. It’s just a matter of time when entrepreneurs use this new framework (if they haven’t already) and apply it in various industries to create hundreds of new markets.
Comment: What is your analysis of the Long Tail theory?