The Long Tail a Fairy Tail?

The Long Tail a Fairy Tail?

1. Introduction

What is the Long Tail theory? Is it a myth or the reality? Is it working theory or is just applicable in some particular examples? In this essay I will try to give an answer of all these questions by analyzing all the pros and cons about the Long Tail theory.

The interesting thing about search's long tail and the way that search queries work, is that the "tail continues indefinitely, and the sum of the frequencies of the less searched terms is actually greater than the sum of the frequencies of the more popular terms.This means that a majority of keyword traffic lies in the "long tail."

The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail [1].

What drives this Long Tail and the niches that populate it? Anderson identifies three 'forces'.

1. More stuff is being produced. Technology and the internet make it cheaper and easier to record and distribute your own songs, publish your own writings and so on. This lengthens the tail.

2. There is better access to niches, again thanks to the reach and economies on the net. This fattens the tail.

3. Search and recommendations connect supply and demand. This drives business from hits to niches.

2. Pros and Cons of the theory

Mr. Anderson, the inventor of the Long Tail theory, gives many great examples of the converse to Pareto's principle that 80% of the sales and profitability will come from about 20% of all customers. The 80/20 theory often holds true for product sales as well – 80% of sales often comes from just 20% of the products offered by a manufacturer. This concept has driven everything in database marketing, from audience identification to campaign structure, sales strategy, etc [2].

In digital selling environments, where products are delivered digitally (such as iTunes), or sold digitally with limited overhead costs for bricks and mortar or distribution and storage (such as Amazon), we now find that the cost of maintaining customer relationships is simply a matter of computer storage or low-cost digital interactions. Suddenly, in certain digital environments – it is cost-effective to sell to anyone and everyone on the customer file – no matter their recency, frequency or monetary relationship [2].

Inventory, distribution and production cost per unit have always been higher for low-selling products. Therefore, every product has a minimum demand threshold for it to be profitable to a supplier. Due to the fact that any item the suppliers have available in a store will make a profit in the long tail situation, the suppliers have no reason not to supply every item they possibly can. Even if they lower the margin, they will always make a profit because there are no costs associated with an item.

However, having a huge inventory can have detrimental effects on sales if consumers are dwarfed by the choices they have to make. For the long tail demand existence, one more element is needed. Consumers need to be able to find what they like.

Several mechanisms are possible to achieve this, but the most well known is the collaborative filtering. This technique filters the choice available using the choices similar consumers have made. Once this is in place, users will automatically be led to their own niche based on other purchases or preferences [3].

Some of the pros and cons of the internet searching are:

Pro: Long tail keywords are less competitive

Con: Long tail keywords get less traffic

Lack of competition is an advantage and disadvantage at the same time. In most cases, the reason there is less competition for a search term is because there is less demand for it. As the search engine optimization plan is all about getting more traffic to some pages,

Pro: Long tail keywords are more specific

Con: Long tail optimisation requires more pages to be optimised [4]

Internet users will stay longer on a page when it answers their specific needs, so a page that suits their long search term is likely to keep them interested. Unfortunately, being this specific is hard work. Instead of optimising four or five pages, long tail optimisation takes hundreds of pages.

Another aspect I would like to mention