ad:tech Chicago | Chris Anderson |The Long Tail Recap
Posted by barbararozgonyi on August 1, 2007
Typed these notes as I followed Chris Anderson’s ad:tech Chicago keynote. For complete accuracy, please refer to his book, “The Long Tail: Why the Future of Business is Selling Less of More.” It’s packed with insights on the way our culture, our lives and our marketing is morphing.
When you think about Google, you think about the metrics and the clear value, but Anderson thinks about granularity. It acknowledges the reality of who we are, traditional marketing hasn’t found a way to address our narrow interests as well as the broad.
The most embarrassing part of the presentation.
Anderson says he has a really geeky hobby where he and his kids build drones. He runs Google text ads on the site. They’re fascinating, like an aerial video tour from a camera, he doesn’t who they are and they don’t know who he is.
We have a liquid market of advertisers trying to reach a narrow market. There are incredibly relevant ads. Each one of you has your own special niche interest. With Google Ads, you now have the capacity to match you with an advertiser who is incredibly relevant to your interest. This is finally the world of commerce and media introducing us to people we’ve wanted to meet all along.
Not new – 100 years ago we were fragmented by geography
What changed was mass media: the arrival of radio, TV, all those things had the effect of snapping us into culture lockstep. The 20th century was an anomaly. We’re all different and we have our niche interest. With the Internet, we have microcast, we have narrowcast. We don’t have to settle for one size fits all. It’s always been true and been suppressed.
The way we measure this is to look at hits and blockbusters
We can measure the decline by looking at specific media. On March 21, 2000 *NSYNC released No Strings Attached. This became the best- selling alum of all time with more than 10M copies in total. Since then, the number of hit albums has fallen by 60%. But, there’s more music made and listened to than ever before: 70,000 albums per year.
The number of hits and blockbusters are falling off the cliff. We’re redistributing our taste. That reflects who we are. Our taste differs. The marketplace can reflect that because we have a place for everything. That allows for minority taste to be measurable and surfaceable. We’re changing our taste to reflect what we really want.
In TV, as the number of channels has grown, the market share of the top 10 shows has progressively fallen. Attention is redistributing over time. We like our hits and we like our niches.
What’s ending is the monopoly of the hits.
This is not a problem with TV, you cannot aggregate audiences that big in a world where there is so much choice.
Average ratings for the #1 show in each year has fallen – there was very little competition for your time during the peak of the water cooler area. Five years from now, we’ll be redefining success. We have to de-stigmatize narrow success: when you’re reaching a smaller audience, you’re reaching an audience who is really engaged.
Even in Hollywood, you see this trend.
The per capita attendance continues to fall and will never reach its high point from the mid 20th century.
It used to be we could market our way into a hit. Movies measure the fall off between the first and second weekend. In the old days, we could advertise enough to guarantee three weeks of good attendance. Now we see the difference between marketing-driven attendance versus the audience size relative to the level of quality of the film.
If anyone could consistently figure out how to make hits, they would. But they can’t.
We try to go for the average consumer. We have to focus on the core and where most people are. Expensive distribution requires you to focus on the biggest clumping of consumers. The bell curve goes back to Napoleon’s army when soldiers were fitted by their chest size.
Pareto, an Italian economist, found that 80% of the wealth was in the hands of 20% of the population. His findings led to the 80/20 rule and well as unrest over the desire for equality in Europe, which led to Marxism. Efforts to redistribute wealth failed.
This comes out in every natural system where network effects or word of mouth come into play. Popular things get more popular. Success breeds success. Why do we see markets in bell curves when the Parento slope is the reality?
For the last hundred years, we’ve only seen the blockbusters. In the last 10 years, we’ve seen the Internet as a marketplace with infinite shelf space. What we’re finding is that although no single one of them sells a lot, the new growth market makes up about one-third to one-half of the hit.
The New Growth Market: Products You Can’t Find Anywhere But Online
Numbers shown from Rhapsody, Netflix and Amazon. There is a market out there as big as the market we already knew: 40% of all music sold is only available online. In two years, that will be 50%. Netflix has 85,000 movies. Blockbuster has 3,000 movies per store.
In each case the demand for products available only online is the fastest growing market.
750,000 different kinds of shoes
Where does this demand come from – refined taste, rural areas, urban areas, hard-to-fit, vegetarian shoes [shoes without animal products]? Converse makes Zappo’s leading vegetarian shoe online. Vegetarian shoes are made with canvas and a synthetic sole. Imagine the college student who thinks they are buying cruelty free shoes. Converse is owned by Nike – these same people are boycotting Nike for sweatshop practices. By the way, Anderson says it’s totally unfair.
Average number of turns/year: 2
At Walmart, the product needs to sell twice a week to maintain its shelf space. At Zappo, the product/shoe may sell only two pairs per year, yet it’s a success because the consumer went to the site for the experience. Anderson will work with them on how to do recommendations to drive them further down the tail.
Started the long tail of beer: micro brews or regional, hand-crafted beers. Red Bridge is an allergen-free, gluten free beer. What is different about beer now? They’re seeing a shift to one size fits one. They’re seeing demand for products that aren’t for everybody else towards people wanting what they want. [Note: Quenching thirst for more than a flavorful beer, the company’s Here’s to Beer site features videos and interviews. Today’s release is on the happenings at the New York Jedi Club. After you watch the video, you can click on over to minglenow, connecting people through beer. Branding beer goes beyond taste into progressive packaging.]
The long tail of education is home schooling. Google serves them massively.
The Long Tail of Media
Blogs vs. traditional mass media. Google ranks sites and blogs in terms of incoming links. Boing Boing, a popular blog with authority site status, has more incoming links than Fox News, Time, NPR, etc. Engadget has more power than MSNBC. PostSecret has more incoming links and gets more attention, than LA Times and CNN Money. DailyKos ranks higher than the Chicago Tribune, The Wall Street Journal and ESPN.
Brian Lam, an intern in Anderson’s office just about a year ago, runs Gizmodo, which now has more incoming links than 98% of U.S. newspapers.
Now the editor-in-chief of Wired magazine [media maven Martha Stewart graces the current issue as the doyenne of the digital/home arts DIY crowd.], this is the world Anderson inherited. Magazines used to compete with other media, now they have competition from 70 million blogs. It’s very difficult for mass media to reach the granular level. They have to find a way to engage the way blogs do.
The new way of reaching consumers is in a more engaged way. Wired magazine tried to do it on Second Life, but gave up. Because of limited capacity, only 30 people can show up only at one time. Read “How Madison Avenue is Wasting Millions on Second Life” in Wired’s current issue online.
We need to measure success differently than number of hits or viewers. That’s not necessarily appropriate; this is the aggregate demand in media.
Second Life is about the demand at one moment in time.
Is there a lasting value to having them visit an empty corporate presence? It has caused them to think differently about success – maybe building community and starting conversations is a better measure. We’re shifting from a lecture model – traditional media. Online, at best, we create a well-lit place to start a conversation. and think: I should not be dominating.
The ants have a megaphone.
Jeff Jarvis had a Dell that didn’t work. Jarvis blogged about his Dell Hell experience at his blog, Buzz Machine.“Dell Hell” became a bad meme. They didn’t realize how pervasive their experience was. For the first 30 days, Dell didn’t know about it. On Day 30, it came to Dell’s attention. This is an example of why traditional marketing doesn’t work anymore.
Your brand isn’t what YOU say it is. . . it’s what Google says it is
Anderson showed clips from Google trends results for Dell + sucks. Dell can’t influence the WikiPedia entry. To check Google Trends, type in your own company + sucks to find out what people are saying about you, [Note: also an insightful resource to track search trends in general]
Example: Dell + sucks
Dell responded and has become a better company because of it.
The number one city searching for Dell Sucks was Austin.
Dell now has a dedicated staff to watch for blog comments. If you blog about your problem, they’ll get back to you within 7 days.
[Note: Just checked on Dell’s blog status and found Direct2Dell, one2one communications with Dell http://direct2dell.com/one2one/default.aspx Looks like authentic effort to communicate, serve, update and even gather. Find out how and when to hang out in Dell’s coffee house on Second Life. http://direct2dell.com/one2one/archive/2007/07/23/21925.aspx I would suggest they change the posts from numbers to title for better SEO.]
Anderson showed this video, The Day of the Long Tail, at the end of his presentation.
There was no time for questions or comments from the audience. We met up with Anderson at the book signing where he told our 17-year-old college marketing/social media tracker and our 12-year-old tween marketing advisor he’s thinking of starting a Wired Teen magazine. And, this fall Wired Science will debut on PBS
Your turn: What do you think about The Long Tail?