Google's Long Tail

On Tuesday Google had their analyst day, which was focused on articulating their strategy and explaining the underlying dynamics of their remarkable success. I've described Google as a "Long Tail company" before, so I was delighted to see that this is the way they now describe themselves, too. You can watch the webcast here (the image above is slide 10) The San Jose Mercury News report (free reg req'd) on the meeting also discusses the Long Tail strategy.

What Google has done is to find and monetize the Long Tails of both advertisers and publishers. These include millions of small companies and individuals who may never have advertised before, at least not nationally. They were considered sub-scale--too small to be worth a call or visit from an ad salesperson, possible too small to even think of themselves as an advertiser at all. But Google ads are self-service, cheap, and performance based (pay-per-click), which all combine to dramatically lower the barrier to entry.

Matching these advertisers are hundreds of thousands of previously sub-scale "publishers", from blogs to niche commercial sites. Most are too small to have their own ad sales business, but they can now run relevant Google ads by just adding a few lines of HTML to their site.  About half of Google's business now comes from such "partners", rather than from ads sold against search results themselves.

Eric Schmidt, Google's CEO, explained how these millions of small-to-midsized customers represent a huge new Long Tail ad market. "The surprising thing about The Long Tail is just how long the tail is, and how many businesses haven't been served by traditional advertising sales," he said. Google now has revenues of more than $1 billion a quarter, a least half of which is made up of Long Tail advertisers by this definition. This is, needless to say, just a glimpse of what's still to come.

Comments

[Constantinos D]

you have to start collecting royalties of some of these guys!

[Constantinos D]

you have to start collecting royalties from some of these guys!
that was a pretty interesting webcast from the google guys too. and btw, their new maps service is amazing.

[David McCormick]

There was a piece on National Public Radio on 16 Feb (http://www.npr.org/templates/story/story.php?storyId=4502046) that talked about how the internet is transforming China's economy. The part that struck me as the Long Tail component was the story of the business-to-business advertising web site that is gaining literally thousands of companies per week and allowing companies to find each other (in China and internationally) in a way that completely bypassed the traditional wine-and-dine-and-graft local business culture. It's astonishing.

Cheers, David.

[azeem]

Chris,

You can tell the long-tail is being reached by Google when sole trading delivery men in North London buy google ad words. And why wouldn't you, if you were them.

One way of considering the long-tail is to recognise that we are moving into a post-fordist economy. You can have any colour, as long as its the colour you want.

a

[ebay]

What's teh best way to find user behaviour and search term patterns?

[praca]

Cool site

[Vinny Lingham]

My blog recently outlined why Google will rule over MSN & Yahoo in the short term, at the very least. The Google Long Tail approach certainly does vindicate my analysis.

http://www.vinnylingham.com/2006/05/clash-of-titans-fresh-perspective_04.html

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[karman]

Anyway, love to have a coffee about this one day and debate it...great
exploration of a topic ad agencies should be having more of...sometimes posing
the question is more important than having the right answer. Cheers
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[Sheffield Jobs]

long tail is crucial for smaller sites and specialist SEOers.
I make my living from the Long Tail!! lol

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[Searchboth]

Searchboth.net is the first site to place google and yahoo side by side on one split screen. The web site takes the user's query and creates a browser window with two frames, with the results from Yahoo! on one side and those from google on the other. It has completely end up the hassles involved while searching different search engines at the same time.

[Derya Baykal]

And why wouldn't you, if you were them.

[Ken Nickless]

Interesting post.Wow! More than 1 billion a quarter, should've taken those shares a few years ago!

[PuReWebDev]

Thanks for posting about Google long tail. I do website marketing myself and your blog is great research for my website marketing Video Podcast series http://www.youtube.com/user/PuReWebDev

thanks,
PuReWebDev

[Aaron]

Yeah huge revenues indeed,I think as long as youtube keeps running they'l keep dominating the market place But hey nothing lasts forever'.

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[Lee]

great post! thanks!

[çiçek]

Google will rule over MSN & Yahoo in the short term, at the very least.

[murat]

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[rixoyun]

post.Wow! More than 1 billion a quarter, should've taken those shares a few years ago!

[sbs]

Matching these advertisers are hundreds of thousands of previously sub-scale "publishers", from blogs to niche commercial sites
yes, it's sbs