Chris Anderson’s The Long Tail is a useful book for professional marketers that have interest in eMarketing. The book conceptualizes the online marketplace into a useful framework. The Long Tail, illustrated below in Image 1 summarizes how limited shelf space in the physical world can only afford to make products at the head available to consumers. Whereas the unlimited shelf space in the virtual world provides an equal playing field for niche or less popular (long tail) products.
This concept is not new. Chris Anderson uses the Sears catalogue as an example of how the framework has existed well before the Internet. With their catalogue, mail ordering and mail delivery, Sears found a way to reach a large and dispersed market before cars and mobility was prevalent. The catalogue’s contents were significantly superior to accessible products at local stores. The same concept has now re-emerged but on a much larger global scale. All the worlds’ products are significantly superior to anything accessible at the local market, regional market or national chain market.
Chris Anderson goes on to explain how the framework is supported by three forces illustrated below in Image 2 (from Chapter 4).
The first force (Image 2a), is about generating content. Tools of production are more affordable than every before and accessible for the general population. Individuals can record or produce content at or close to the same quality as large production firms. With the costs of production lower than ever, more long tail content can be produced.
The second force (Image 2b), speaks to accessible content. The internet is the driving factor of this force. As Chris Anderson puts it; “today anybody can reach a market every bit as big [as Wal-mart] with a listing on eBay.” (The Long Tail, pg. 55) The internet has created a global marketplace where niche products are more accessible than ever.
The final force (Image 2c), is about driving more business and connecting supply and demand. Search engines, forums and blogs provide infinite amounts of information for consumers to sift through. The physical searching costs are eliminated and replaced with online ‘ease of search’ based costs. As a result, tools and services that facilitate the search process become increasingly valuable.
The force grid in Table 1 below from The Long Tail (pg. 57) summarizes the forces and provides useful examples of products and servicess the facilitate each force.
Understanding the Long Tail and the three forces can be useful for eMarketers. The framework demonstrates that niche products living in the long tail have as much opportunity as the hits living in the head of the curve to attract and audience turn a profit. As a result, the playing field has changed and because accessibility is less of a challenge, marketers are free to focus more efforts on Brand and product awareness.
Accessibility — In a physical environment companies must compete for limited shelf space. Distributors that have this limited shelf space are very selective about which products to make available. As a result, many products are cast aside once shown unprofitable or given less desirable shelf positioning to begin with. This dynamic forces marketers to address accessibility directly with distributors. Overall these efforts can cost firms significantly in terms of resources, time and profit margin. Online, where accessibility is less of a burden, marketers are free to focus on more important things.
Awareness — Moving to an online marketplace presents new challenges for marketers. First, there is significantly more non-relevant information to filter through seeing as the Internet is a repository of new and old information. Second, there are more competitors seeing as there is no limited shelf space and any company around the world can set up an ecommerce website. Third, the virtual world eliminates tangibility and customers lose the benefits of validating products in person. Finally, the Internet is controlled by the marketplace and as result marketers are not the only promoters for their products.
Non-Relevant Information — One of the main challenges with an online marketplace is the shear abundance of content to filter through. The focus for marketers shifts from getting people to the store in a physical world to getting people to the product or website. Search engine optimization, and proper product descriptions becomes increasingly valuable to facilitate for consumers that activity of finding the product.
More Competitors — the internet creates a marketplace without boundaries. As a result, it becomes increasingly important for companies to properly differentiate themselves and demonstrate their value compared to competition. This does not mean, cut the price. Customers have shown a willingness to pay for unique and differentiated products that meets their needs. The challenge for marketers is to properly deliver the differentiated message.
Eliminates Tangibility — A virtual world eliminates the opportunity for customers to physically review the product. This can be a challenge for products aimed at the touch, smell and taste senses. As a result, marketers must find innovative ways to prove the products functionality to consumers. Understanding the tools available online that can help deliver the message to consumers such as videos, blogging, testimonials and proper descriptions becomes increasingly important.
Controlled by the Marketplace — Online, any product is fair game for consumers. Customer reviews are no-longer limited to professional (and sometimes paid-off) critics. Customers are increasingly influential in a products success. This is the subject of Forrester’s book Groundswell. Marketers, must understand the online marketplace and must keep an ‘ear to the groundswell’ in order to gage the temperature of their brand or product. This includes knowing social media tools such as Twitter and Facebook, and learning to review relevant blogs and forums where their products and brands could be discussed.
***
Chris Anderson’s book introduces an interesting economic concept to explain the online marketplace. The concept is definitely apparent when reviewing products with no inventory carrying costs such as those sold by Rhapsody (an online music repository) and Netflix (a movie repository). Even physical products sold online seem to follow the same rule as shown by Amazon.com’s seemingly endless product marketplace. Ultimately, the concept is useful for marketers in numerous ways. However, it primarily gives insight into the need for marketers to focus efforts on product awareness as opposed to accessibility. Competition for limited shelf space is no long a factor to be concerned with. And just as Sears did ages ago, companies must shift their marketing focus to making their catalogues available, making them easy to filter through and properly describing the products within. Then comes the challenge of ‘managing the Groundswell.’
Citation: Anderson, Chris, The Long Tail: why the future of business is selling less of more, New York : Hyperion, 2006.