Anatomy of the Long Tail: Ordinary People with Extraordinary Tastes
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Transcript of Anatomy of the Long Tail: Ordinary People with Extraordinary Tastes
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Anatomy of the Long Tail:Ordinary People with Extraordinary Tastes
Presented by Maria AvralevaTo Prof. Dr. Eduard Heindl
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Long Tail as a property of online market
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Amazon as an example of the effective Long-Tail model
30% of sales are from the category of “unpopular items” (tail)
Advantages that Amazon.com takes:
Ability to sell rare items; “one-stop shopping” for both mainstream and niche interests
Building effective advertisement system
Building a powerful recommendation engine.
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Recommendation engineAmazon.com: the store will recommend additional items based on a matrix of what other shoppers bought along with the currently selected item.
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Eccentricity: two theories
1. Majority of consumers prefer popular offerings;only a minority seeks for niche content
2. Everybody is a bit eccentric, consuming both popular and specialty products.
Are people satisfied with a small inventory of goods?
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Data Analysis • Sharad Goel et al. “Anatomy of the Long Tail: Ordinary People
with Extraordinary Tastes”
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Data Analysis Results• Two main conclusions:1. A relatively small number of items account
for a disproportionally large fraction of total consumption
2. The tail in aggregate is nevertheless heavy.
100 most popular movies – 15% of consumption
3000 most popular movies – still 13% of consumption unmet
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Individual Eccentricity
• To what extent do individuals have niche interests?
Given inventory: k most popular items.
Find: How many customers are 100% satisfied? 90% satisfied?
100% satisfaction 90% satisfaction
Netflix: k=3000 11% 63%
Yahoo! Music: k = 50000 5% 32%
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Cumulative popularity function in different domains
% of users satisfied
Cumulative Popularity
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Rating of niche products
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Tail Consumers
Large share of audience for popular products consists of relatively light customers;
Large share of the audience for niche products consists of relatively heavy customers;
Consumers of the most obscure products are also buying the hits.
Consumption of long-tail offerings is more prevalent among people who stick to a genre.
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Advice to Retailers If the goal is to cater to your heavy customers, broaden your
assortment with more niche products.
Strictly manage the costs of offering products that will rarely sell.
Acquire and manage customers by using your most popular products.
Even though obscure products may have a higher profit margin, resist the temptation to direct customers to the tail too often, or you'll risk their dissatisfaction.
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Conclusion
Vast majority of users are a little bit eccentric (sometimes we all consume tail – items)
Convenient one-stop shop for mainstream and niche is provided by “infinite-inventories”
Users value specialty items
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Any questions
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