Long Tail Marketing

David Kilkelly

Fri. Apr. 25, 2014 5:15am

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Hi, I'm David Kilkelly. Welcome to BlinkBack Video Marketing. I thought today I'd talk to you a little bit about the long tail and why I think it's a really interesting idea, and how it affects online markets. So the long tail basically was an idea that was developed by a guy called Chris Anderson some years ago, and what it is is a way of understanding how the internet enables niche markets. And when you understand how that works, you can tap those niche markets and make use of them.

So let's have a look at an example to see how this works. So let's take a look at something like Waterstones. Okay, here's Waterstones, a very famous High Street bookstore, and they stock a wide range of different books. So they'll stock books on gardening, and hobbies, and novels, and all sorts of different things but their shelf space is ultimately limited. So if I go into Waterstones and I want a book on gardening, I can find probably several books on gardening, but I can't necessarily find hundreds of books on gardening on lots of different areas because they haven't got room to stock all of that, and it's not financially viable to them.

If I go onto Amazon, then you can find pretty much anything that you want. Amazon is an online model where space doesn't really matter anymore. This is an Amazon bookstore, basically. This is the warehouse where Amazon stores its products. So you can see there that space isn't an issue. That's not the problem. So here's a book on Amazon called The Encyclopedia of Ornamental Grasses, so very niche, very specific area of gardening. And there'll be lots of different books on all of the different niche areas of gardening that you can get through Amazon are like that.

If 1% of customers want to buy a book on ornamental grasses, then in a local area, that might just be five people. If 1% of a global market of customers want to buy a book on ornamental grasses, that could amount to thousands and thousands of people, so it makes it worthwhile for Amazon to stock that book. I've got an interesting statistic that illustrates this. It's quite an old one, but in 2008, 36.7% of Amazon sales were made up of niche markets, niche book markets. If you look at this graph, this is what the long tail looks like and you can see here in the front part of the graph, this is where Waterstones would stock most of their stuff. So this is the bestseller list and all the things that would fit on the shelves at Waterstones, the things that are popular that everyone wants to buy. But this bit here is the bit that they can't stock. This tail basically goes on forever into an ever-decreasing number of smaller niches, and this is where Waterstones can't really compete because they physically can't stock that number of books. Amazon don't have that problem.

So if you take that idea and you apply it to a search function like Amazon Search or Google Search, you start to see how it works. If you're trying to compete for sales on broad search terms, so on terms like coffee, or shoes, or gardening, you're never going to be able to cut through the noise of everybody else competing for those search terms. And if we look back at our graph, this area here are those broad search terms. If you look down into more increasingly niche search terms, so if you're selling products in those niche areas, then the small number of people who are searching for terms like ornamental grasses will come across your site. There's less competition in this area and higher conversions, whereas in this area there's much greater competition and much lower conversions. Once you've opened that door in that niche area, you can steal attention away from the big players, and that's valuable not just in terms of a sale but in terms of building your brand and your online presence, as well.

So I hope you found that interesting. If you can find that really, really specific thing about your business or that really, really niche item that you sell and use that just to cut through that noise, then that could add some real benefit and some real value to your business online. My name's David Kilkelly, and this is BlinkBack Video Marketing.

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