Is the Long Tail Theory Rubbish?
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A Harvard Business School researcher suggests the Long Tail theory in which business profits from selling a large number of unique items in small quantities is malarkey. |
Writing in the July-August issue of the Harvard Business Review, Anita Elberse said her researched focused on the music and home-video industries, and after reviewing sales data for the online music service Rhapsody and the DVD-by-mail service Quickflix concluded that new, big hits generated more of a market share than they once did. At the same time, most consumers don't like niche products found in the tail. In the article, the business school prof wrote:
Is most of the business in the long tail being generated by a bunch of iconoclasts determined to march to different drummers? The answer is a definite no. My results show that a large number of customers occasionally select obscure offerings that, given their consumption rank and the average assortment size of off-line retailers, are probably not available in brick-and-mortar stores. Meanwhile, consumers of the most obscure content are also buying the hits. Although they choose products of widely varying popularity, top titles generally form the largest share of their choices.
Later Elberse advised:
It would be imprudent for companies to upend traditional practice and focus on the demand for obscure products. The data show how difficult it is to profit from the tail.
Chris Anderson, the Wired editor in chief who coined the term Long Tail, didn't dispute Elberse research. In a blog entry posted on the HBR website, Anderson wrote:
My point is not to suggest that Elberse is wrong and that I'm right, it's only to point out that different definitions of what the Long Tail is, from "head" to "tail", will generate wildly different results.
Is this debate simply a situation of Elberse tasting apples when Anderson is offering oranges, or is the Long Tail a simply flawed theory that many businesses believe is true? As Anderson blogs about Elberse's research:
It's an excellent article, and although I don't agree with all the conclusions, I'm delighted to see research of this rigor on the topic.
Here at CIO Insight, we haved had some success with the Long Tail; a significant amount of our website traffic is attributed to articles posted months and years ago. What do you think about the true affect of the long tail on online business?
Comments (1)
One of the pieces of folklore in data mining was that if you put disposable diapers next to the advertised beer, you could increase the sale of diapers at the QwikyMart.
The traditional explanation was that Joe Six-Pack would stop for the beer, remember that Mrs. Six-Pack would give him hell if he did not remember to get the diapers and make purchase if it was in his face.
I wondered if Mrs. Six-Pack was driving in to get the diapers, saw the beer and remembered what life with kids was like, so she stocked up on brewskis to get thru the rest of the day.
So, does the obscure products on a website attract me or do the mainstream products? Both, depending on my mood and needs (am I buying for a gift? looking for a rare book? want a best seller?).
The site that consistently meets both ends of the popularity spectrum stands the best change of being my "shop of first choice" just because of the success ratio.
Posted by Joe Celko | July 8, 2008 3:03 PM