A powerful new model has emerged within the economics of e-commerce, observed Chris Anderson in his 2004 Wired magazine article, “The Long Tail.” [1] Today’s consumers have highly-individualized tastes that include more than just mainstream fare. With the help of foresighted, all-inclusive online retailers, people are getting what they want: offbeat movie rentals from Netflix, obscure books from Amazon.com, indie music downloads from iTunes, and outrageously specific auctions from eBay.
The long tail theory asserts that consumers are willing to seek out those niche products that appeal to their innermost sense of self. [2] Long tail retailers are first attracting people with their prominent mainstream offerings, and then keeping them clicking and buying with the obscure. These online purveyors combine infinite shelf space and unlimited selection with real-time information about buying trends and public opinion. Recommendations – generated by either human editors or genre databases – drive demand deeper into vast catalogs of choices.
“Everyone’s taste departs from mainstream somewhere, and the more we explore alternatives, the more we’re drawn to them,” Anderson wrote.
Niche markets have become big business. Where marketers once ignored the “tail” because they did not have the means to make obscure products available to their audiences, the internet is allowing companies to reach well-defined micro-markets. The limitations of distribution costs and shelf space have ceased to exist. Successful online retailers are now making just as much money from “esoteric” purchases as they are from mainstream “hits” [3].
Make everything available. “Almost anything is worth offering on the off chance it will find a buyer,” Anderson recommended.
But the more products retailers make available, the harder it can become for consumers to sift though the choices to find the product they want. People will be overwhelmed and less likely to buy if the catalog is poorly organized. So it is imperative that long tail retailers create user-friendly web sites with interfaces that are easily navigable and provide intiutive search tools to facilitate ‘self-discovery’ of products [4].
There are three other long tail forces that have become prevalent. First, the tools of production have been open-sourced, giving the masses the ability to make their own products and media. Second, The tools of distribution have also been ‘democratized.’ EBay, for example, allows any user to reach millions of potential customers by listing a product on its web site. And third, supply and demand have been connected. Consumers can be introduced to new products and drive demand for them through recommendations, electronic word-of-mouth, blogs or customer reviews. [5]
Long tail success seems to boil down to a finely-tuned “open network of more.” So as consumer attitudes and expectations shift, so must marketing strategies. Marketers are dealing with a networked public. As such, the principles of the long tail must also be applied to the marketing of the long tail.
Marketers should use all possible venues to get a message in front of the intended audience. Marketing is being made “viral” with the diffusion of information about a product and its adoption over the network.[6] Companies can find new opportunities for “customer retention” and “lifetime value” by applying the concepts of dialogue marketing and network-building. Traditionally, most companies have believed that 80 percent of their business came from 20 percent of their customers. However, by applying long tail relationship-building principles, companies can do a better job of retaining all customers, specifically those customers who are not in the top 20 percent of revenue-producers. [7]
Word-of-mouth marketing is especially notable in a long tail world. Word-of-mouth exchanges are no longer restricted to small-group interactions between individuals. Consumers are using the internet as a personal publishing tool and sharing their experiences and opinions regarding products and/or services with anyone and everyone through emails, message boards, reader recommendations and/or blogs.
Blogs are able to quickly spread information at the grassroots level. They are open to frequent widespread observation, and “offer an inexpensive opportunity to capture large volumes of information flows at the individual level.” And within the blogosphere, sharing discussion of a new and interesting topic with others in one’s immediate social circle may bring pleasure or even increased status to that individual. [8]
Marketing strategies for products and services can incorporate the all-inclusive nature of the long tail. Marketers are continuing to use traditional public relations methods, such as press releases and media kits sent to mainstream media journalists, as well as garnering the attention of influential people within a community who can really help boost the exposure of a product. Marketers should not abandon paid advertising in mainstream media – newspapers, radio, television, billboards, as well as in online media such as Google ads and banner ads on target-audience and genre-specific web sites. Any product or organization should also have its own web site, serving as its public face to the world.
But to tap the long tail audience, marketers have to expand upon what they’ve done in the past. Consumers are showing increasing resistance to traditional forms of advertising such as TV or newspaper ads. When it comes to niche products, using a traditional advertising approach is impractical and probably not very effective. Long tail marketing is more feasible because it exploits existing social networks by personalizing the experience for customers and encouraging them to share niche product information with their friends and the world-at-large. Targeted marketing at networked virtual communities is more advantageous both to the merchant and the consumer, who will benefit from learning about new products.[9]
Movies, for example, take advantage of this type of marketing. Movie trailers and film photo galleries are made available on the official movie web sites. The same marketing assets are also distributed to mainstream media groups such as newspapers, niche web sites such as IMDB.com, and social networking sites such as YouTube and MySpace. Fan web sites, particularly fan bloggers, also play a big part in the marketing. Marketers are tapping into a highly-captive audiences and allowing the network of fans to play a part in the development and release of films. This niche audience — a networked community — can build even more momentum and resonance for a product.
References:
Chris Anderson, “The Long Tail,” Wired Magazine 12, no. 10 (October, 2004).
Rick Ferguson, Kelly Hlavinka. “The long tail of loyalty: how personalized dialogue and customized rewards will change marketing forever.” The Journal of Consumer Marketing 23, no. 6 (September 20, 2006): 357-361. http://www.emeraldinsight.com/0736-3761.htm
David Meerman Scott. “Chase the Long Tail to the Next Frontier.” EContent, September 1, 2006, 48. http://www.proquest.com/ (accessed February 28, 2008).
Erik Brynjolfsson, Yu Jeffrey Hu, Michael D. Smith “From Niches to Riches: Anatomy of the Long Tail.” MIT Sloan Management Review 47, no. 4 (July 1, 2006): 67-71. .
“PROFILE: What is the ‘long tail’?” Brand Strategy, March 12, 2007, 19.
Jure Leskovec , Lada A. Adamic , Bernardo A. Huberman, The dynamics of viral marketing, Proceedings of the 7th ACM conference on Electronic commerce, p.228-237, June 11-15, 2006, Ann Arbor, Michigan, USA. Also, ACM Transactions on the Web, 1, 1 (May 2007). http://www-personal.umich.edu/~ladamic/papers/viral/viralTWeb.pdf (accessed February 28, 2008).
Rick Ferguson, Kelly Hlavinka. “The long tail of loyalty: how personalized dialogue and customized rewards will change marketing forever.” The Journal of Consumer Marketing 23, no. 6 (September 20, 2006): 357-361. http://www.emeraldinsight.com/0736-3761.htm
Gruhl, D., Guha, R., Liben-Nowell, D., and Tomkins, A. “Information Diffusion Through Blogspace.” In Proceedings of the 13th International World Wide Web Conference (WWW’04), May 2004, pp. 491–501. http://people.csail.mit.edu/dln/papers/blogs/idib.pdf (accessed February 28, 2008).
Jure Leskovec , Lada A. Adamic , Bernardo A. Huberman, The dynamics of viral marketing, Proceedings of the 7th ACM conference on Electronic commerce, p.228-237, June 11-15, 2006, Ann Arbor, Michigan, USA . Also, ACM Transactions on the Web, 1, 1 (May 2007). http://www-personal.umich.edu/~ladamic/papers/viral/viralTWeb.pdf (accessed February 28, 2008).
*Note: This essay was written by Marie K. Shanahan for a graduate level course at Quinnipiac University in Spring 2008. A collaboratively-edited version of this essay is included in a Wiki called “The New Communication Professional” at http://newcompro.halavais.net.