Search Long Tail

Thanks to cheap storage and a flexible architecture, the internet removes many limitations of physical distribution. In retail, it allows for infinite aisles of merchandise.

In Chris Anderson words:
"With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried."

If the sales distribution has a Long Tail is determined by the cost of inventory storage and distribution. Where inventory storage and distribution costs are low, it's possible to sell unpopular products. When storage and distribution costs are high, only the most popular products can be sold.

For Amazon or ITunes, who has the reach and already are selling the popular products, selling the unpopular products will only improve the average customer spend and their sales revenue. This because the extra cost for selling unpopular products are very low.

However, in order to turn a mass market into a million niche markets, there would be huge marketing costs involved, wouldn't it? Isn't this the reason why niche markets often are overlooked by most company?s? It's also the reason why it might be difficult for Small Businesses and Start-ups to tap into The Long Tail.

Not anymore! - With the introduction of Search Engine Marketing, the marketing costs for reaching niche markets has gone down. It allows advertisers to display their ads related to searches done from Internet user who wants niche products and services. The display of the ad is free and the Advertiser Pay-Per-Click.

Danny Sullivan has written Search Long Tail, explaining why Search Engine Marketers has been interested in Search Long Tail for some time and why the Search Advertising model works well for niche products and services.

By sending this blog, I'd once again would like to point out that I work for Overture - A Yahoo! Company. Please don't let that stop you from reading Danny Sullivan's article, it?s good!