I've lived on the "long tail" world before the term was even coined. I don't call myself an expert on it, but I have a pretty good visual picture of what it means -- no, seriously, it's a graphical picture of the query logs that I plotted when I worked on MSN Search.
People understand the the "long tail" is about a curve that starts very high, drops quickly and stretches "forever" into the X-axis. But if you really plot a long tail curve, like the top 10 million search terms, it would look like a vertical line followed by a horizontal line. It's a very steep drop.
It's pretty hard for people to grasp that, the same way it's hard when we talk about trillions of dollars of budget deficit. We talk, but do we visualize it?
The non-long tail view of customers and products is the old 80/20 rule, where 80 percent of sales comes from 20% of the products. The long tail is far, far way from that. It's more like 99/1, where 99% of sales come from 1% of products, or in search terms, 99% of the query volume comes from 1% of terms (not quite like that, but close).
If you know nothing about the long tail, there are two things that you must remember:
- Averages are pretty useless -- You have 10 products, one sells 1,000,000 units per month, the other 9 sell 1 unit per month, so the average is 100,000 units per product -- aka, useless data.
- A handful of the top N "things" can make a huge difference on your business.
- There is no such thing as a stand-alone "long-tail" -- It must exist with the head of the curve otherwise it's probably uninsteresting from a business perspective.
Let's just assume that 90% of Sampa's traffic comes from the top 1% websites (that is not the case, but I'm just using it to illustrate here). That is a clear example of a long tail play. In a case like this, where we have over 30,000 sites, it means the top 300 sites drive 90% of our traffic. If you start to drill down, you might find out that the top 30 sites represent 25% of traffic (again, this is just hypothetical). Now imagine most of those 30 sites decide to shut down. You might have lost 25% of your traffic in a blink. The flip side is when you get a handful of very active, very popular sites, where you might gain 20%+ traffic in a week.
Another more generic example is a site that sells chairs. Even if it has 10,000 different types of chairs you can assume the top few dozens will probably represent 50% of all sales, and the remaining 9,950 will represent the other 50%.
That is a long-tail play. But notice that selling only the bottom 9,950 would mean a drop in 50% of potentail revenue. And given the law of manufacturing goods, the most popular items are usually the cheapest to produce and the ones where you might have the most profit from (I know, it's way more complex than this)
I really despise companies that are doing a "long tail play", but are ignoring the top of curve. Can you imagine if Amazon refuses to sell the best selling books because it wants to optimize to the "long tail"?
The last piece to remember is to not confuse a niche (or "vertical") with a piece of the long tail, but that is a whole other post.