Has the Long-Tail Theory been disproved?

The “Long-Tail Theory” was first coined by Chris Anderson in an October 2004 Wired magazine article.  In a nutshell it describes how the Internet makes it possible for eCommerce sites such as Amazon or Netflix to achieve signifigant profits by selling small volumes of hard-to-find items to consumers, instead of only selling large volumes of a few highly sought after items.

In a recent Harvard Business Review article, associate professor Anita Elberse contends that in the broader market of consumers buying products online, the Long-Tail Theory doesn’t exist.  She argues that while the Internet makes it possible to offer a near-infinite inventory of goods for sale it does not mean that consumers will start wanting more obscure items in any great numbers.  Even Chris Anderson acknowledges some of the data in her study may have some validity, but Anderson wants it to be known that the way in which he and Ms. Elberse define the “head” and “tail” are completely different.

So what does this have to do with local search marketing? In March of 2007, I wrote an article applying the Long-Tail Theory to the local search space and the opportunity for niche, regional and hyper-local directory sites to reach consumers online.  With the further proliferation and fragmentation of newly launched local sites just 18 months after I first wrote on this topic, the Long-Tail Theory is still, if not more so, applicable to local search today. Why?  When conducting a local search using any of the three major search engines, the results present consumers  with more and more options for final destination local search directory sites.

According to data from a comScore report, only 36 percent of users' time online is spent on the top 20 sites; a four percent decrease in just one year.  This trend illustrates the tremendous opportunity for reach that is available to existing local search engines as well as all of the new sites that are launching at a breakneck speed.  This gets at the heart of the Long-Tail Theory relative to local search; the “head” being the major SE’s and IYP’s and the “tail” representing new and emerging sites.  Eighteen months ago data showed that about 82 percent of local search was conducted at the “head”, today that number is closer to 90 percent.

If you look closely, the “head” is creating the “tail” in the local search ecosystem.  For example, the local results at Google for a service based business in Chicago point to 10 unique sites plus 10 local listings at the top; the so-called Google 10 Pack.  But even within the Google 10 Pack the “tail” is greatly magnified.

A search for plumbers in Chicago at Google resulted in the normal results; the Google 10 Pack followed by 10 unique local directory sites.  However once I clicked on the “more” link for the top business listing in the 10 Pack, I found 40 additional local sites (e.g. GetFave.com, Openlist.com, YellowBot.com).  This is the Long-Tail Theory hard at work in local search.

The proliferation of local search sites creates a unique opportunity for savvy businesses big and small to maximize their online reach. However this opportunity comes with some required preparation.   Understanding and investing to ensure your network of locations is being distributed to all of the local business directories that the major search engines index is no easy task. Long past are the days of investing all of your online marketing resources at the five to ten sites that garner the majority of the overall local search market-share. The Long-Tail simply won’t allow that strategy to perform the way it did two years ago.