Leveraging the “Long Tail”

This week’s blog is based on the seventh pattern in regards to Web 2.0 Application trends. So what can be said by Leveraging the “Long Tail”? Chris Anderson describes the principle as “Collective power of the small sites that make up the bulk of the web’s content”.  Leveraging the long-tail can be defined as individual earning revenue by allowing another company to place contextually targeted ads on their website.  It is a marketing strategy that can be used by technical or other companies to help create value. According to Wikipedia, The Long Tail or long tail refers to the statistical property that a larger share of population rests within the tail of probability distribution than observed under a ‘normal’ or Gaussian distribution. In Web 2.0, this strategy can prove as a major advantage if companies focus on smaller markets to lower costs for the distribution of goods and advertisement. Companies that have utilized this strategy to benefit their marketing methods are eBay, Amazon and PayPal. With using The Long Tail strategy, demand increases due to the fact that a variety of products are distributed to large amounts of customers and additionally, there is low stocking and lower distribution costs.

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PayPal’s business is highly associated with eBay using the long tail. PayPal is not only used in association with popular websites and companies but also to smaller websites. PayPal can be used as an effective form of payment for any business start-up due to the fact that it offers high security measures to ensure safe payment. PayPal’s strict security policies aid in detecting fraud thus providing sellers and buyers with confidence, trust, and a closer relationship with the service. With PayPal’s web service, it is able to attract more customers and therefore capture new members. Secondly, it has clearly shown its ability to engage a wide audience. Lastly, Paypal delivers more options for customers therefore making it a perfect example of a company that has utilized the Long Tail strategy for the greater benefit.

 

Links

Wired: The Long Tail

Long Tail

O’Reilly Web 2.0

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