Thursday, February 10, 2005

Long Tail 

Call me slow, but I just stumbled on an internet business theory called the Long Tail. It is something Google talks about, but somehow I wasn't listening. What is fascinating about this theory is how it changes economics.

For the one or two of you who still might not know what the "Long Tail" refers to, here is an explanation. With the cost of storing data online nearing zero, it doesn't matter whether you place 10 or 10 million songs online for sale to the public, or every book that is in, or even out of, print (as Amazon does.) What happened as companies did this is that they found as much as 50% of their revenue came from sales of works ranked 100,000 or more down the Long Tail of inventory. These were songs and books that would never be carried in music or book store. But the internet reaches the world, and little-known music and books can find niche audiences.

How does this affect Public Relations. It seems we have to take a longer and larger look at what we do when working with clients. Take, for example, a consumer electronics company. It might make a product that doesn't sell well, and it markets it to just a few countries. As we discovered when we worked for a consumer electronics company, users band together worldwide into their own constituency. A company cannot discontinue a product as easily as it has done in the past when it reached the Long Tail and was no longer that profitable.

Already there have been instances where unknown bands and forgotten books have risen from obscurity to best sellers because an audience found them in the Long Tail and talked them up.

The Long Tail is an economics concept, but it has as much meaning for communications work as it does for business. It's an issue that merits closer study.


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