The Long Tail is an economic concept that says the collective demand for less-popular and hard to find items, exceeds that of all the most popular added together in a particular category.

The term was first coined around 2004 by Chris Anderson to describe the niche strategy of certain business of online music, online books and movies. Products being digital, these businesses reaped significant profits since they were not faced with the distribution and inventory cost issues. Most of these businesses got aware to the Long Tail principle that, its just not about pushing the market with hits that are popular to many, but mining many a unpopular, to quite a few. Please see the graph below for further clarity.

We normally tend to equate mass market with quality and demand, while in fact it just represents domain familiarity, advertising impact and a time based appeal. Factually, whether it’s a hit or a miss both are on a equal footing, as they happen to be entries into a online database which can be accessed on demand. Our assumptions of popularity are based on a poor supply-demand match due to inefficient distribution. With the advent of online distribution and retail we are into a world of abundance, which in turn is revealing service related truths on the multi –faceted wants of the customer, thus fuelling more algorithmic recommendations based on the feedbacks, leading to more sales.

The sheer size of the Long Tail is what’ really amazes me. Combine enough non-hits on the Long Tail and embark on a market bigger than the hits.

Barnes & Noble carried around 130,000 titles on an average. But more than half of Amazon’s book sales are from outside its top 130,000 titles, which implicates the fact that, the market for books that are not even sold in the bookstore is larger than the market for those that are sold. If only we can get over the economics of scarcity, the potential book market appears to be twice as big.

The same is true for all other aspects of the entertainment business, a comparison of online and offline businesses clarifies it : An average Blockbuster would carry around 3,000 DVDs. Yet a fifth of Netflix rentals are outside its top 3,000 titles. Rhapsody streams more songs each month beyond its top 10,000 than it does its top 10,000. In each case, the market that lies outside the reach of the physical retailer is big enough and getting more bigger.

Google, illustrated Long Tail idea to investors way back in 2005 and makes most of its money off small advertisers (the long tail of advertising), and so does eBay with a tail of niche and one-off products. Google and eBay have discovered new markets and expanded existing ones.

The Long Tail fundamental can be applied to the PPC and the SEO. The inventory of obscure, yet valuable keywords is inexhaustible, for the pay-per-click campaigns, hence it is extremely encouraging to use the concept of Long Tail to have an ever-larger keyword buys. Not to be missing out broad matching on Google. It is reported that the traffic has a better conversion when tapped into the tail. The best or dirty ( you decide) part is that the Long Tail concept can also be applied in a much better way for keyword optimization by having loads of good quality content leading to better ranking in the natural results and getting a sizable traffic which could be a possible relief from running paid campaigns.

Since queries forming the keywords for the Long Tail are illustrated behind the head. Online businesses need to harness both ends of the curve. Great Long Tail businesses drive customers further by following the contours of their likes and dislikes, fueling their exploration of the unknown.

This is the power of the Long Tail.