The Long Tail of Advertising

The long tail is wagging the dog.

Today marks the debut of the book The Long Tail, the 230-page version of the groundbreaking article Chris Anderson penned for Wired magazine in 2004. Google CEO Eric Schmidt is quoted on the cover saying, "Anderson's insights influence Google's strategic thinking in a profound way." Google seems to have influenced Anderson even more profoundly, given the company's recurrence in the book.

There's been a fair amount of discussion in the trade press about the long tail of search-- the infrequently entered queries that are generally more specific, allowing marketers to precisely target customers if marketers can efficiently aggregate and manage enough of these terms. In his book, Anderson takes an even broader view of the long tail of search, saying that "Google is finding ways to tap into the long tail of advertising."

To put the concept into context, consider a graph with a steep slope downward from the head of the curve on the left, descending into a seemingly endless tail pointing right that scrapes along the bottom but stubbornly refuses to hit zero. That's the long tail, with a few blockbusters on the left and less popular offerings toward the right. Thanks in part to online marketplaces, from e-tailers stocking vast warehouses of physical merchandise (such as Amazon and eBay) to those with digital content (such as iTunes and Audible), retailers can offer almost anything without worrying about the cost of in-store shelf space, and consumers have more access to finding exactly what speaks to them.



Applying this to advertising, the definitions of blockbusters and hits are murkier, but the concept still works. A Super Bowl ad is an obvious hit, as is any ad that's seen by tens of millions of people or that costs millions of dollars in media and production costs. This could also include an online portal takeover ad. Of all the businesses around the world, only a select few have the means to participate in such a marketplace.

Way down in the long tail, marketers have historically bought Yellow Pages listings and newspaper classified ads; any business can participate. Today, marketers also can use search ads. Anderson noted three ways in which Google made search advertising a stand-out example of the long tail: it capitalizes on the long tail of searches, with nearly infinite possibilities of queries entered; the automated bid-based marketplace efficiently allows any advertiser to participate; and AdSense allows any online publisher to offer targeted ads on its site, further extending the inventory.

To appreciate the emergence of long tail phenomena from another angle, consider the cross-media progression of the democratization of advertising:

  • Traditional media gradually expand their long tails of advertising with new channels, largely made possible by new technologies such as digital television and satellite radio.

  • The online display ad market extends the long tail of advertising much further, where every publisher from major news networks to personal homepage builders can open up ad inventory on their sites.

  • Search engines, led by Google and Yahoo, make it even easier for both advertisers and publishers. Anyone can advertise if he or she has a credit card and access to the Internet, even at the public library. The search engines make inventory available with every search that's conducted, and they make it easier for publishers to host the ads.

  • The next step is democratization of multimedia ads. Google's click-to-play video AdSense ads democratize the media buying, allowing any advertiser with video content to buy media online with a minimal budget. Cheap digital cameras and software pre-installed on most computers democratize the ad production, with the production quality continuing to improve as production costs decrease.

  • In the next era, media buying will be democratized across all media. Google purchased radio advertising platform dMarc Broadcasting and has experimented with magazine ads, eBay is working on an auction-based TV media system with major advertisers and the Association of National Advertisers (ANA), and at Microsoft's official US launch of adCenter, Steve Ballmer shared his vision for device-agnostic ad-supported software services. When these visions fully come to fruition, any marketer will be able to produce any type of advertisement and run it in any channel it wants, whether it's a TV spot on channel 428 or a billboard running in a mobile video game. Of course, major national advertisers will be among those reaping the benefits.

    Why care about tapping into the long tail of advertising? One reason is the economics of diversification. A TV network's vice president of ad sales told me months back that he'd rather use his online properties to reap $2,000 from each of 1,000 advertisers than have one advertiser spend $2 million. The conversation came to mind last week when Advertising Age reported that an interactive advertising's agency's share price dropped because one of its two marquee clients was rumored to be putting some of its business up for review. Diversification can also benefit advertisers when they keep a balanced portfolio of search queries they manage and sites where they buy and run their ads.

    What I found most striking while reading Anderson's book--even more than from reading his blog or articles--is how pervasive the long-tail phenomenon really is. The longer the tail, the more opportunities there are for advertisers, consumers, and anyone serving either constituency.

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