Online marketing consultant Ken McEvoy of SiteSell.com summarizes the "long tail" theory in the introduction to an interview with Chris Anderson. Here's what McEvoy says it means for small business:
... The Internet is transforming from a mass-market, blockbuster culture into a world of infinite niches. Those blockbusters and hits, and all the major brands that we all know so well, live in the head of the curve, a relatively small number of high sales volume products.A lot of their conversation is technicall, about things like SEO (search engine optimization) strategies to increase the number of hits in Google, but Anderson explains how he thinks small business can thrive in the middle ranges of the frequency distribution curve. That's where consumer interest is focused on a narrow interest, but the Internet can bring customers together worldwide. Examples would be my interest in the dulcimer or Irish traditional music. Anderson's is Japanese wood-cut prints:
Beyond this Industrial Revolution created world, countless niches form an ever growing long tail distribution...so called because the tail is infinitely long compared to the head. The future lies, for us, the small business person, in the long tail of niche markets. Market opportunities abound, and will be growing, in fact, for those who understand and use what Mr. Anderson describes as the "three driving forces of the long tail" [which are: (1) widely available software for creating content; (2) "aggragators" like iTunes that list a lot of different niche products; and (3) "filters" like Google that send customers to niche websites].
I think one of the biggest opportunities is the niche-to-mega-niche, which is to, rather than going broad...rather than trying to be everything to everybody, to find a very focused area that is not fully mined by others, and to be the master of that niche. To take it as far as it goes, recognizing that it wouldn't make sense in a single geography, if your niche was, say... Japanese wood cuts. There's probably, outside of Manhattan, there's probably no single geographic area in the United States where there would be a market big enough to be the world expert on Japanese wood cuts. But if you're tapping a global market, because you have the Web presence as well, then there really is a market for the consummate English language expert in Japanese wood cuts.
That is the perfect example of a niche that's neither too big to be differentiated nor too small to be commercially interesting. And there are thousands or millions of those. The reason I say it's not just an opportunity for small businesses is that, in many ways, it's what big businesses need to do when they go online as well.
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