Small Business Reading Room

Tuesday, February 21, 2006

The Long Tail

As the barriers of entry to businesses continues to decrease, a statistical model has developed that defies the traditional mainline marketing approach. This is the evolution of the "Long Tail".

As we saw on Valentine's Day in the Small Business Reading Room, 99.7 percent of the employers in the US are small businesses. Viewing those employers as potential customers, for example, and while it is certainly good to sell to the .3 percent big businesses, you would be missing the bigger boat by excluding the smaller sales.

We can see the same phenomenon in the music industry, by Chris Anderson and as well described as also driving online book sales by Wired.

I was introduced to the concept by William Slawski, of SEO By The Sea (SEO = Search Engine Optimization). Bill has been instrumental in developing the SEO attributes of this site, as well as my law office site. When I was first analyzing the data for the search terms used to find our sites, I was focusing on those few terms that top the list.

While it is good to examine these, Bill pointed out the Long Tail that followed. By working with the Long Tail, we take the analysis and development of the site to the next level, and to the future.

When you look at a distribution graph, you can see the peaks that demonstrate the most frequently used search terms (or whatever). The slope of the graph then typically falls off significantly and forms the Long Tail of low frequency items.

When we tally the cumulative total of the Long Tail items, the results can be surprising. Search term use of the Long Tail is well described at SearchEngineWatch.

Most of my criticism of the Delaware Secretary of State's Division of Corporations has been their lack of understanding of the Long Tail in franchise taxes.

They continue to doggedly live in the 70's by focusing on only the top 5 percent to the exclusion of all others. While the view of the top 5 percent is clearly nice, it is myopic.

Let's hope that someone over there starts to read some Long Tails before the epilog.


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