Web 2.0 - Review of the Long Tail

Last year I wrote a two part newsletter called Wikis, Swikis and Blogs, Oh My! (part one, part two) In it I discussed the cultural impact of instant access to an incomprehensively massive amount of information. I talked about the long tail concept (made popular by Chris Anderson's book by that name), and also about how web applications are being developed to help us find and process all this stuff. The upshot, as is relates to advertising and marketing, can be observed in the Blockbuster/Netflix example I described in those articles. The concept goes like this... among Blockbuster's customers, based on their sales records, there is literally zero interest in the many thousands of low distribution independent international films out there. That's because Blockbuster doesn't inventory these films. How could they? They wouldn't have any room on their shelves for all the hits. Netflix, however, since it has no shelves, can stock them all. And interestingly, while such obscure films don't sell anywhere near as many copies as the hits do, they all do sell some. Netflix reports that virtually all of their 70,000 titles are in circulation at any given time, even the most obscure titles. While the hits will always radically outsell the obscure titles, because the obscure as a group so radically outnumber the hits, the cumulative effect of all their sales actually competes with the sales of hits. The head and the tail of sales start to even out.

So what does this means to Blockbuster? It means that on any given day, those renters of DVDs that might have picked a film from their inventory are now watching a movie that more closely matches their peculiar interests that they ordered from Netflix. Any one independent foreign film is not a threat to Blockbuster, but discoverability and availability of all of them is.


Let's translate this effect to the advertising industry.   next >