November 18, 2005 | Friday
Latitude Intelligence Network: Midlands
By Jackie Danicki - Blogger in Events |Latitude Intelligence Network |Marketing |Online Sales
Yesterday saw another in a varied, regional series of Latitude’s Network Intelligence events, this time at the lovely Bosworth Hall Hotel in the picturesque Warwickshire countryside. (Yes, that’s one of our clients’ venues. Thanks, Britannia Hotels!)
Amongst the line-up of presenters for our clients, we were really pleased to have Heather Hopkins, a prominent analyst from Hitwise, along for the day to share her view of the future of search. Hitwise collects data about online behaviour from ISPs, with a base of 8 million UK internet users whose actions online are surveyed constantly. One of the data samples that Hitwise monitors is that of search terms, and Heather was the first of our presenters yesterday to introduce the concept of the Long Tail with regard to search terms.
The Long Tail is a phrase coined by Wired magazine editor-in-chief Chris Anderson, in a much-referenced article he wrote only 13 months ago. Anderson sums up the Long Tail as follows:
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. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.
One example of this is the theory’s prediction that demand for products not available in traditional bricks and mortar stores is potentially as big as for those that are. But the same is true for video not available on broadcast TV on any given day, and songs not played on radio. In other words, the potential aggregate size of the many small markets in goods that don’t individually sell well enough for traditional retail and broadcast distribution may rival that of the existing large market in goods that do cross that economic bar.
The term refers specifically to the yellow part of the sales chart at upper left, which shows a standard demand curve that could apply to any industry, from entertainment to hard goods. The vertical axis is sales; the horizontal is products. The red part of the curve is the hits, which have dominated our markets and culture for most of the last century. The yellow part is the non-hits, or niches, which is where the new growth is coming from now and in the future.
...When consumers are offered infinite choice, the true shape of demand is revealed. And it turns out to be less hit-centric than we thought. People gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest (whether we think of it that way or not).
Well, yes, that’s quite a lengthy summation - and there is more. I would recommend that you read the whole thing. Better yet, read Anderson’s book on the subject when it is published in early 2006.
The Long Tail kept cropping up in our discussions throughout the day, and I suspect that we will explore the concept further in future events. Watch this space for details, and thanks again to everyone who came along yesterday.
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