Long Tail? Or the Meaty Middle?

One of the hottest ways to think about the new “2.0 economy” has been Chris Anderson’s original article, blog, and book about The Long Tail. If you want more background try any of the previous links, but the quick summary is:

The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of “hits” (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.

The Long Tail is often used to talk about the success of newer web business models like Itunes, Rhapsody, and Google Adsense, and it’s probably been used in hundreds of business plans for Web 2.0 applications being pitched to venture capitalists.

I agree with the general model of the Long Tail, but in a recent discussion with a coworker and friend about what portion of the web publishing market my team’s product RMX Direct was going after, he brought up the idea of the Meaty Middle.

What is the Meaty Middle? Let’s take a look at the Long Tail graph:

On the left we have the “hits”, or in the music industry example the top of the radio charts and the most well-known artists. On the right in yellow is the long tail where the rest of the smaller artists in the music industry make up a large amount of business when taken together.

But really, is it that simple? Can we really group them in these two groups? Isn’t there a significant difference in the music artist who sells 100 thousand copies of an album and one who sells 100 copies? On that premise, we have the Meaty Middle:

We now see the green Meaty Middle in the graph which takes up quite a bit of area. As I mentioned above, this is a different type of music artist than the ones further down the tail. They are legitimate bands, not household names, but definitely different from the struggling artist few people outside of their friends or local town would recognize.

Let’s get more specific with the web publisher industry since that’s where the idea originated. On the left side of the graph you have your Alexa top 250 publishers. This includes:

• Portals: Yahoo, MSN, AOL
• Top News Sites: CNN.com, New York Times, Washington Post, etc.
• Social Stars: Myspace, YouTube, Flickr, Digg, etc.
• Specialty Content: ESPN.com, Weather.com, Match.com, etc.

In the advertising world these top publishers are all enterprise level advertising clients with their own ad sales teams selling premium campaigns, and they usually still have a serious amount of remnant inventory that they sell to direct marketing advertisers or they work with ad networks to resell. More and more of them are moving to the exchange model for that inventory, but that’s another story.

Then on the other side of the industry it’s always been talked about how Google Adsense dominates because of the Long Tail. You know, how so many blogs and niche publishers use Adsense and when you add them all up together it equals a lot of inventory and a lot of money.

That’s true, but too simple. Adsense, and the other ad networks you’ve heard of like Yahoo Publisher Network, Valueclick, Casale, Tribal Fusion, and Burst really do their damage in the Meaty Middle. Why do I differentiate it? Because the publishers in the Meaty Middle are different and require different things.

When RMX Direct was mentioned in TechCrunch, we received hundreds of signups for publishers who I’d classify as “long tail”. They were primarily bloggers and focused websites with a small amount of traffic. After a hundred of these publishers started using our tool their inventory adds up to less than one Meaty Middle publisher I called on the phone and signed up to use our service.

Why is this critical to know? If we focused exclusively on the long tail publishers, we’d fail. The support and management that some of them require make them a losing financial effort, while that one Meaty Middle publisher I signed up requires little to no support at all. That isn’t always the case, but there is definitely not a correlation between the amount of support a publisher requires to the amount of ad revenue they generate.

This is one of the reasons why many traditional ad networks have a minimum volume requirement. We’re not requiring a minimum volume for the long tail small publishers because we love them and taken as a whole they do provide a good chunk of business.

The key point is that we recognize that the Meaty Middle exists, it’s a huge chunk of the market, and it’s a different type of publisher with different needs. If we resorted to just thinking about the Alexa Top 250 and the Long Tail alone, we’d be building and marketing towards the wrong thing.

As I’ve examined other industries I think it’s clear the Meaty Middle exists in most cases. There’s usually significant differences between the item at the top of the curve, the middle, and the tail. The Long Tail theory isn’t wrong, it’s just too simple of a breakdown for my taste.