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Has the Long-Tail Theory Been Disproved?

  |  July 17, 2008   |  Comments

How the the "head" is creating the "tail" in the local search ecosystem.

The "Long-Tail Theory" was first coined by Chris Anderson in a 2004 "Wired" magazine article. In a nutshell, it describes how the Internet makes it possible for e-commerce sites such as Amazon or Netflix to achieve significant profits by selling small volumes of hard-to-find items to consumers, instead of only selling large volumes of a few highly sought after items.

In a recent Harvard Business Review article, Harvard associate professor Anita Elberse contends that in the broader market of consumers buying products online, the long tail doesn't exist. Just because the Internet makes it possible to offer a near-infinite inventory of goods for sale doesn't mean consumers will start wanting more obscure items in any great numbers, she said. Even Anderson acknowledges some data in the professor's study may be valid, but he wants it to be known that the way in which he and Elberse define the "head" and "tail" are completely different.

What does this have to do with local search marketing? In March 2007, I wrote a column applying the long-tail theory to local search. I discussed the opportunity that niche, regional, and hyper-local directory sites had to reach consumers online.

Because of the further proliferation and fragmentation of newly launched local sites just 18 months after I first wrote on this topic, the long-tail theory is still, if not more so, applicable to local search today. Why? It seems as though consumers have more choices in local directory sites today when they conduct a local search at any of the major search engines.

According to data from a comScore report, only 36 percent of users' time online is spent on the top 20 sites -- a 4 percent decrease in just one year. This trend illustrates the tremendous opportunity for reach available to existing local search engines as well as all of the new sites that are launching at a breakneck speed.

This gets at the heart of the long-tail theory relative to local search; the "head" being the major search engines and Internet yellow pages and the "tail" representing new and emerging sites. Eighteen months ago, data showed that about 82 percent of local search was going to the "head." Today that number is closer to 90 percent.

If you look closely the "head" is creating the "tail" in the local search ecosystem. For example, the local results at Google for a service-based business in Chicago point to 10 unique sites plus 10 local listings at the top -- the so-called Google 10 Pack. But even within the Google 10 Pack, the "tail" is greatly magnified.

A search for plumbers in Chicago at Google resulted in the normal results; the Google 10 Pack followed by 10 unique local directory sites. However, once I clicked on the "more" link for the top business listing in the 10 Pack, I found 40 additional local sites (e.g. Fave, Open List, YellowBot). This is the long-tail theory hard at work in local search.

The proliferation of local search sites creates a unique opportunity for savvy businesses big and small to maximize their online reach. This opportunity comes at a cost, however. It's not easy understanding and ensuring that your network of locations is being distributed to all of the sites hosting a local business directory that the major search engines index.

Long past are the days of investing all of your online marketing resources at the five to 10 sites that garner the majority of the overall local search market share. The long tail simply won't allow that strategy to perform the way it did two years ago.

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ABOUT THE AUTHOR

Brian Wool

Brian Wool is VP of content distribution at Localeze, a Chicago-based local search company. Established in 2003, Localeze specializes in connecting consumers with local merchants through online content collection, enhancement, and distribution. An expert in local Internet search marketing, Brian leads the distribution efforts at Localeze and is responsible for content delivery to over 35 leading search engines, Internet yellow pages, and local directories. Brian previously held various sales and marketing positions at comScore Networks and Claritas.

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