Chris Anderson - The Longtail
‘The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare.’ http://www.thelongtail.com/about.html
The long tail theory is used to describe niche marketing and the way it works on the internet. In the past, stores have only been able to hold the most popular products because they needed to make a big profit from the people that bought products from there. The theory says that the internet has changed the way that works. You can now purchase not so popular books, songs, and films on different websites such as Netflix, iTunes and amazon. So long as you have an internet connection you can be anywhere in the world to access these stores, without physically walking into a shop.
As you now don't have to physically be in a shop to buy a product, it means niche products can be sold online without having the risk of losing money. For example, a physical store may not sell a new bands music because its not popular enough to guarantee profit, however iTunes may want to sell the product, because they can see it has potential, and it cost nothing for them to place it on their application. As iTunes, Netflix and Amazon can sell these types of products with little loss, they are much more obliged to do so, as it could potentially make them lots of profit.
Google relies on the long tail theory as it allows small business to place adverts in places they wouldn't be able to do if it was a physical business. This is how Google make their money, and because lots of business start online now, like Amazon, they are able to make huge profits on advertising and promotion.
The long tail theory is used to describe niche marketing and the way it works on the internet. In the past, stores have only been able to hold the most popular products because they needed to make a big profit from the people that bought products from there. The theory says that the internet has changed the way that works. You can now purchase not so popular books, songs, and films on different websites such as Netflix, iTunes and amazon. So long as you have an internet connection you can be anywhere in the world to access these stores, without physically walking into a shop.
As you now don't have to physically be in a shop to buy a product, it means niche products can be sold online without having the risk of losing money. For example, a physical store may not sell a new bands music because its not popular enough to guarantee profit, however iTunes may want to sell the product, because they can see it has potential, and it cost nothing for them to place it on their application. As iTunes, Netflix and Amazon can sell these types of products with little loss, they are much more obliged to do so, as it could potentially make them lots of profit.
Google relies on the long tail theory as it allows small business to place adverts in places they wouldn't be able to do if it was a physical business. This is how Google make their money, and because lots of business start online now, like Amazon, they are able to make huge profits on advertising and promotion.