The Long Tail
Why It Is Important For Small Businesses

Transcript of Sept. 7, 2006 Interview
Ken Evoy with Chris Anderson

Ken Evoy: I'm with Chris Anderson, Executive Editor of "Wired" magazine and author of The Long Tail, perhaps the most important book of the decade for small businesses and entrepreneurs. I've never made a recommendation like this before, so for those of you who know me, please do take notes. This is a book for the ages.

But Mr. Anderson does build a compelling case for what the future of business looks like. His book outlines more than just a vision. It's a major trend that's happening now, and that is critically important for the welfare of your small business in the years to come.

First, a quick summary of The Long Tail, so our listeners have a flavor, a baseline to work from. The Internet is transforming from a mass-market, blockbuster culture into a world of infinite niches. Those blockbusters and hits, and all the major brands that we all know so well, live in the head of the curve, a relatively small number of high sales volume products.

Beyond this Industrial Revolution created world, countless niches form an ever growing long tail distribution...so called because the tail is infinitely long compared to the head. The future lies, for us, the small business person, in the long tail of niche markets. Market opportunities abound, and will be growing, in fact, for those who understand and use what Mr. Anderson describes as the "three driving forces of the long tail."

Driver number 1...and these are critical -- if you understand these, you're going to know how to use the long tail -- once you've read the book and our interview, which will be covering specifically small business marketing using the long tail. But I digress.

Driver number 1 is the tools of production. Hardware and software have put product creation into the hands of everyone. The result is an exponential explosion in niche products. Not all of them great, of course, but an explosion in the number of products that are available.

Driver number 2 is the Internet aggregators. Aggregators pull tens of millions of niche products together...all on offer...all in one spot. Think iTunes. iTunes aggregates more music than any other retailer ever could. On a more practical small business online level, think Google Adsense.

Google pulls millions of niche publishers together...all on offer, to advertisers. Your sites are in essence, products -- products that are offered, Web sites that are offered for advertising. Advertisers, everyone from General Motors, to Stan's Local Body Shop, are the customers. And for the first time, they can filter through Google's aggregation of millions of publishers, and place ads across a wide variety of sites related to what they want to sell...to who they want to sell it to.

Prior to this, GM basically advertised on NBC. That may be a bit of an overstatement, but there is one heck of an extreme shift going on.

Driver number 3 is the filtering software itself that connects supply and demand. Filters, anything from Google Search to "those who bought this, also bought that" recommendations, empower consumers to sort out the junk and find well-targeted, high quality products that have been produced by the first driving force, i.e., the tools of production, and aggregated by the second driving force.

For example, are you planning a vacation to Anguilla? Do a Google search to find great sites about Anguilla. You'll see ads on the Web sites about Anguilla. Click! Your interest earns income for both Google and the publisher of that small business site.

Mr. Anderson's book uses excellent "Big Company" examples from Google, Rhapsody, iTunes, Amazon, Netflix, and eBay. But there is much more to the Long Tail than big business. For example the "tail within a tail," that he describes needs to be understood by every small business person.

And that's where we'll be picking up with Mr. Anderson on this interview. Taking the long tail to the small business world. The long tail can be far more than an aggregator of small businesses, as one of millions of products that are on offer by larger businesses, in fact, your small business has its own long tail, and you can not only be an aggregatee, you can be an aggregator.

And with that, it's time to introduce you to Chris Anderson, Executive Editor of Wired and author of The Long Tail.

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Ken Evoy: Welcome Mr. Anderson, and thank you for taking the time to talk with us today. As I was saying, your book has important ramifications for every small business person, not just the dot com, way out there, digital savvy companies, but for the bread and butter, small businesses of the world. From dentists in California to rental agents in Venice. Of course, I'm a huge fan. I say that unashamedly...it's an honor and a thrill to have you with us. Welcome.

Chris Anderson: Thank you, it's nice to be here.

Ken Evoy: First question, in your book, you talk about the long tail within a long tail. You call this curves within curves within curves, and I quote, "The long tail is made of many mini tails, each of which is its own little world." And that hit me like a ton of bricks. It says to me that every business has its own long tail. We certainly see that here at SiteSell, in the keyword distribution graphs of our small business sites.

Our clients create real content-driven theme sites, for example, say a site on the Caribbean island of Anguilla. Take that niche site. It is found by 8,000 search terms at Google. The top 20 keywords account for 25-30% of its traffic, but the remaining 7,980 account for all the rest.

Those searchers are highly niched, therefore highly interested and targeted visitors. If the small business person with the site about Anguilla lived in the bigger long tail...you know, the more global long tail you talk about, is this keyword distribution in fact what you refer to when you talk about the mini-tails -- the tails within a tail? And does it provide the small business person with interesting opportunities to not only be aggregated by big business, the "aggregatees," if you will, but can small businesses not become aggregators? Can they not work the tail, in other words, in both directions? Does that fit with your model? Have I read that correctly?

Chris Anderson: You nailed it. Yes, that's exactly right. Obviously we need to make a little definitional clarity here. Some small businesses are very focused on a niche and go as deep as that niche goes. Other small businesses are just small versions of large businesses, where they're not necessarily offering a differentiated commodity, they're just local.

So, my local hardware store is no more niche than the local Home Depot, it just happens to be closer...and has less selection, and higher prices. So I presume in this case we're talking about small businesses that have a very focused niche, and aren't just exploiting their geographic proximity to their customer base.

Ken Evoy: Absolutely, small businesses that have a niche, or that can slice themselves so that they carve out niches. Your local hardware store can create a do-it-your-own home basement type of site...can create a bunch of theme sites, and of course he will start to get found by this incredible long tail. But, in general, without stretching the point, sites that lend themselves well. As you know, the number of niches are not going down in this world, they're only going to expand exponentially.

Chris Anderson: Right.

Ken Evoy: And within those niches, there is just this incredible variety. Who would dream that somebody would be searching for "Little Scrub Island," and off-island off an off-island off the Caribbean island of Anguilla, that not many people have heard about to begin with, you know?

Chris Anderson: Exactly. I think that's right, and I think one of the big opportunities for small businesses, and I'm going to actually pull this back -- I'm going to actually say that it's one of the big opportunities for everybody, and I'll explain why in a minute.

I think one of the biggest opportunities is the niche-to-mega-niche, which is to, rather than going broad...rather than trying to be everything to everybody, to find a very focused area that is not fully mined by others, and to be the master of that niche. To take it as far as it goes, recognizing that it wouldn't make sense in a single geography, if your niche was, say... Japanese wood cuts. There's probably, outside of Manhattan, there's probably no single geographic area in the United States where there would be a market big enough to be the world expert on Japanese wood cuts. But if you're tapping a global market, because you have the Web presence as well, then there really is a market for the consummate English language expert in Japanese wood cuts.

That is the perfect example of a niche that's neither too big to be differentiated nor too small to be commercially interesting. And there are thousands or millions of those. The reason I say it's not just an opportunity for small businesses is that, in many ways, it's what big businesses need to do when they go online as well.

When I think of just our own, you know, I work for Conde Nast, and we're one of America's largest magazine publishers...we have classic, mass-market products. We're in the blockbuster business...as we go online, we're not just competing with a relatively small number of mass-market magazines, we're competing with 27 million blogs.

And the competition is incredibly niche. And so to stand out from that competition, we can't be everything to everybody, instead we have to find our own niches. And so even we, big businesses, as we go online and you're competing with small niche businesses, we have to become niche...we have to find places where we can differentiate ourselves from the amateur site, the one person operations, the two person operations, the multitude of competitors who are laser-focused on things that make no sense whatsoever in our mainstream publications, but are exactly what the Internet is all about.

Ken Evoy: "Laser-focused" is a great term because we know that small businesses, let's say your sole proprietor -- two, three, four employees -- don't belong in the big head. Not unless they've got about 20 million dollars of VC [venture capital] to start with in their wallets. So where do they belong? Probably not even at the inflection point, but somewhere down to the right of that long tail. And the farther out they get there, instead of about Italy, instead of about Rome, if you are the guy that knows Puglia like the back of his hand, inside-outwards, and writes about it with a passion and a voice...Conde Nast is going to have a hard time winning that particular little corner of Italy.

Chris Anderson: And Google doesn't discriminate between us. Google will find, if I enter the words, you know, whatever that corner of Italy was, if I enter those words into Google, Google will find the little guy as easily as it finds the big guy. As a matter of fact, it's probably more likely to find the little guy because the little guy is more quote/unquote "relevant."

Ken Evoy: Absolutely, because Google, and this gets to one of your driver number 3's, is getting smarter and not just about relevance now, but about quality. And quality is about tracking "How do humans respond to a Web site before, during and after a visit?" And if this is a great Web site that connected in a profound way, humans respond in a series of ways. Everybody talks about Google PageRank, but that's just one of hundreds of ways that Google can track off-page behavior. So Google is about recognizing the quality.

Let's get into that...as an aggregator also, Google is both a driver number 3, a distributor, a pusher-down of the long tail, as well as an aggregator in terms of -- those type of Web sites, if you will, are products. They are products in that they are advertising vehicles for advertisers to now come in and use Google's tools and say "buy me an across-the-board advertising spread on every Web site about Italy"...or "I want to laser down to the southern regions of Italy."

So Google's job in fact, is to find the quality and to send people who want more and more exotic Italian vacations, farther and farther down that long tail. So that's a great example that you picked up on.

It brings up the question of search engine optimization, which is I'm sure a term you've known, and that I've disliked for a long time. To simplify, since the first days of search engines, the object has been to game the engines and get to number one for what we would call today, or using your terminology, the short head. Trying to win the war for the 20 or 30 most in-demand keywords. And yet, a really great content site will, in fact, drive most of its traffic from the 8,000 other keywords that it gets found for by accident/on purpose, if you know what I mean.

Chris Anderson: I do indeed.

Ken Evoy: Classical SEO has evolved since the days of just on-page keyword-jamming, of course, but it still focuses basically on the hot keywords, and on somehow influencing Google to give me a high ranking for these 20 or 30 words. It's becoming harder and harder. I know in a spot in your book, you talked about the truncated long-curve. I couldn't help but thinking a great idea for Google, if it had the computing power, and it probably does, would be actually to draw a sort of a long tail for every single site that's out there. SEO'd sites would show this truncated curve -- at about 20 or 30 words, it would all of a sudden just drop vertically.

Chris Anderson: That's interesting, yeah.

Ken Evoy: What implications do you think the long tail of keywords has for things like search engine optimization for gaming the engines?

Chris Anderson: Gosh, that is a good question. This is one of those instances where you have thought this through better than I have. What you describe sounds accurate. I think that to the extent that search engine optimization is about climbing higher up the tail than your content deserves, that clearly becomes harder and harder.

Ken Evoy: For your mega-hit keywords, if you will.

Chris Anderson: Right, exactly, as people's searching behavior becomes sophisticated. Obviously this all begins with the search query itself. If you enter a general search query, the search engine optimizers will always be competing for that business, and your results will vary as a result.

Ken Evoy: And when Google dances, of course, you're completely vulnerable because you're dependent on all of your traffic coming from 20 or 30 keywords. Whereas, when you're creating these great sites, basically "keeping it real," and getting found for 8,000 words, it really doesn't matter when Google dances to try and knock out the spammy, SEO guys who're just flooding the net with junk.

Chris Anderson: Right, my point is that it starts with the searcher. If searchers continue to enter general terms, then I don't see a big difference -- I don't see a big change in the search engine optimization market. However, if the consumer lesson from the Long Tail is to type in more and more focused queries, looking for very, very specific things as they became more aware of the variety that's out there --

Ken Evoy: The niche within the niche. The tail within the tail.

Chris Anderson: Exactly, rather than typing "Italian travel" into their site, typing in... at this point, you need to give me an example. (laughs)

Ken Evoy: Puglia hotels.

Chris Anderson: Puglia hotels, exactly, then at that point, the change in consumer behavior is going to lead to a breakdown of the search engine optimizing market. Because, exactly as you say, the relevant sites will be the ones that actually do provide content that addresses that specific interest.

Ken Evoy: And you made the point in your book that the farther you go down that right tail, the more sub-nichey, if you will, that you get... the tighter the bond between the supplier of whatever it is being supplied, whether it's music or content sites, and the person who seeks that. And that again is an advantage that small business people have over big business. I think even, the great example was, a former employee of Wired, who formed his own band, and did all this himself, attracted their own following, and then said, "Wait a minute, what do we need the label for?"

Chris Anderson: Yeah, exactly.

Ken Evoy: He used the long tail brilliantly and I think actually, there's a whole discipline to be called Long Tail Marketing somewhere here.

Chris Anderson: Oh, it's been coined -- for sure. You're absolutely right, which is to say that people gravitate towards true expertise. They're looking for taste-makers, and guides within areas, and they prefer to find actual individuals, rather than just generic corporate voices. And those individuals tend to be actual people who have a very narrow sphere of influence...a very narrow sphere of expertise.

Of course, they're all equally findable right now, so, it's interesting to watch something as simple as digital camera shopping. The old model of digital camera shopping would be that you'd go into a consumer electronics store or camera store and a salesperson who may or may not know anything about the products would sell you something. And that would be it. Maybe if you were really sophisticated, you might look at consumer reports.

The next model would be that you'd go on Amazon. You'd see the best selling one and you'd read the editorial reviews and then you'd read the ratings and the customer reviews... then you'd make a decision based on that. The even newer model would be that you'd just go to Google, and you would very quickly find something like a digital photography site. It's not only got incredibly in-depth reviews by the most obsessive experts, plus loads of really sophisticated comments. It's completely up to date. It isn't just pulling from one set of prices, it actually knows what the prices are everywhere. And you would probably feel better informed through that niche site than you would through either of the two former alternatives.

Ken Evoy: That forms a bond with that reader to a point where, now that site publisher simply has a choice of monetization options ahead of him. A common mistake for small businesses, of course, is they decide first how they're going to make money. And in fact, in today's world, it's "What do I know a lot about? What am I passionate about?" Create that great content in the long tail. Find your proper spot along the long tail and you will form that bond and then, really, the world is your oyster. There are a wide variety of ways to monetize beyond that.

And again, there's a lot of important implications in the book for small business, and like we were talking about -- more than just being aggregated by the big guys, you can aggregate all of these little people that are interested in a variety of features of cameras to the point where they totally just say, "This is the person I want to be doing business with."

Chris Anderson: Exactly, and if you actually go to one of those digital photography sites, you'll find that the message boards and the comments, they're incredibly vibrant. The people who are truly passionate about photography are not going to the general interest sites, they're not even participating in the Amazon customer reviews. They're hanging out in these very narrow, affinity sites, where they feel like they're amongst their peers. And that is where you get the most sophisticated audience. What's interesting is that those audiences are now quite large. You may think of "high-end digital photography" being a niche, but on a global basis, we're talking millions of people.

Ken Evoy: Exactly, not enough to support your local neighborhood camera shop, but when your market becomes the world, you can earn a very good living with a great site about that.

Chris Anderson: Indeed.

Ken Evoy: Of course, if you have a horrible site, and that brings us to a point that you brought up, these driver number 1's, the tools of easy production, of course, puts the same tools into the hands of -- to be gentle -- the less capable. So there is an awful lot of junk out there in the long tail.

That brings us to driver number 3. The goal, of course, ultimately, is to be found. Like I said, I can envision and entire specialty called Long Tail Marketing evolving out of this. The filters from search engines and recommendation services, you gave a brilliant example, which I showed my daughter who's interested in music and business about how a group... I think it was the second one. What was the name of the band?

Chris Anderson: I think Pink, or No Doubt.

Ken Evoy: Yeah, and just the way they worked it through the variety of services and then it got played on Yahoo! Music and then....

Chris Anderson: Oh yeah, that was umm...was it My Chemical Romance?

Ken Evoy: Yeah, there is an art form that's going to evolve to get found. Search engines are of course, like one of those filters that we talked about -- recommendation services. The junk has to get sorted out from the great stuff. Any ideas on small businesses with great products, whether that product is a Web site, or a niche documentary movie? Any idea how they can put themselves into the click paths of those filters, without artificial manipulation?

Chris Anderson: Absolutely, it's a good question. So, you need to know a little bit about how Google works. And the answer is that Google measures the relevance not on the basis of semantic analysis of the page or editorial judgment about what's being offered. But instead measuring the wisdom of crowds, measuring what other sites thought of that site as defined by incoming links.

So the way to get noticed is to be linked to... and the way to get linked to is to participate in the conversation. So let's just take blogs as an example. In any niche, there are blogs that are focused on that niche. Those blogs have high PageRank because they are focused and are read and are authoritative. The name of the game is to get those blogs to link to you. So ask yourself, how would you get blogs to link to you? And that largely involves them a) first knowing about you, and b) you offering something of value.

Ken Evoy: Provide great content.

Chris Anderson: You do something differentiated, or news, or just having earned their respect by reading them and commenting on their sites and otherwise engaging in the conversation with them. So I think that for any niche provider, their first job is to find out..."Who are the influentials in my category? Who are people reading in this space, and how do I get on their radar screen?"

The answer is not press releases, it's not PR, it's not advertising necessarily. It's participating in the conversation. It's a peer to peer market out there and you need to, if you want to be noticed, you need to notice them.

Ken Evoy: That's exactly what we tell our clients. We have 20 some-odd thousand small business clients who create theme-based content sites, who blog, who basically deliver content. And as you say, Google is about finding quality -- not just through Google PR and inbound links, but by tracking, for example, "Does this site on Anguilla get mentioned in influential forums? Is it quoted by the Anguilla government as a link?" There's hundreds of ways that Google tracks this.

Now extrapolate that into other areas -- into say, Amazon filters, into Netflix's "if you like this film, you'd like this film." Does it all boil down to basically "differentiate yourself in a quality way"? And the filters are basically getting smarter and smart enough that they figure this stuff out?

Chris Anderson: I wish it were as simple as that. Differentiation is a necessary but not sufficient condition. In other words, you need to do it, but it's not enough. You need to differentiate and you need to be noticed so that that word of mouth snowball can start rolling.

Ken Evoy: You need to do something big before you can actually reach the tipping point.

Chris Anderson: We're using every cliche in the book at this point. But yeah, obviously differentiate, that's a good start. Then get noticed, and there's lots of ways... in the Amazon reviews, that just means drive people to the product using affiliate links or external sources. It's very hard to manipulate Amazon from within.

It's much easier to manipulate Amazon from outside by driving traffic to a specific product using things you can control like blogs, and comments and -- not spam, but actually participating in a relevant way in communities that might be interested in that product. That will drive people to that Amazon product. Some of them will buy, some of them will leave reviews, some of them will leave ratings, and then the positive feedback effect from within the Amazon recommendation system kicks in.

Ken Evoy: A great, specific answer. I've taken way too much of your time, so one last question, this one a more expansive one -- the future. Where are the next great long tail opportunities? What will the long tail look like in 2 years? What should small businesses be doing today? I don't mean those as literal questions. I'm just giving you some stimulating fodder to tell me what should small businesses be doing, thinking, about the long tail?

Because I buy into this 100%. I literally think you have written the book of the decade and that small business needs to understand this and needs to get it in a profound way. They need to read your book, they need to re-read it and if they haven't dog-eared it the way I've dog-eared it to the point I couldn't find which band it was because I've got so many pages folded. They need to read it again.

Chris Anderson: That's very kind, thank you.

Ken Evoy: No, it is an important work. What should small business be doing, besides reading this book -- after they've read this book.

Chris Anderson: Well, I think the simple answer is this. They probably already know their business pretty well. And the one's we're talking to probably already do have a niche, which they probably know pretty well. I think at this point, the opportunity lies largely in looking at the Long Tail customer. Looking outside of their existing customer base and trying to find people who might be interested...who maybe are interested but just haven't discovered this merchant...this small business. And that means participating, out there, in this conversation called the Global Marketplace. It is all about word of mouth right now.

Everything that's driving demand is less and less about institutional power and advertising and PR and top-down messaging and more and more about individual power and word of mouth and amateur taste-makers who have extraordinary influence because people respect peers more than they respect authority figures these days. So from a simple, taking your business to the next level, it's all about participating in that conversation that's happening out there, with you or without you.

In terms of starting new businesses, I think that the day is still young. You know iTunes is the classic one-size-fits-all product. There's so many opportunities from a more focused genre level music sites -- classical, jazz...or national sites -- ones that offer much richer information about the artists and about the music.

We're just scraping the surface at this point. Obviously it's about how you both can have a focused, differentiated, niche music site and be findable for those who are starting in a place like iTunes is an unanswered question at this point, since you need to do both.

But as you say, the small businesses can be micro-aggregators, but they need to be in turn, aggregated by the big aggregators. That is true, and it's not yet evident how to do it, but I think that's where the opportunities lie.

Ken Evoy: Mr. Anderson, I thank you very very much for your time and for a wonderful book. There'll be a link on the site longtail.sitesell.com over to Amazon.com. I can't recommend it enough and I can't thank you enough for your time sir.

Chris Anderson: Thank you, it's been a pleasure and those were smart questions.

Ken Evoy: Have a great evening.

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