A surprisingly large number of mostly newbie (though not exclusively) marketers don’t actually have a clear understanding of “Niche Marketing” and of the often used, but rarely understood term “Long Tail” in reference to keywords or even products. For example, a lot of marketers think that  “long tail” refers to the number of words in a keyword phrase. As in, the longer the keyword phrase, the longer the “tail”. Well as you will find out in a moment that is not exactly correct.

I actually found that having a better grasp of those two popular marketing terms has helped me significantly in my approach to niche research and my use of the “long tail” keywords in marketing campaigns.

A while ago I picked up a book by Chris Anderson called, “The Long Tail”. As it turned out, the “long tail” phrase was in fact coined by him and refers to the tail end of the “popularity graph”. This tailing off in popularity of a given product/service is quite obvious and easy to se and interestigly, represents the statistical majority.

A very good example of this is what was found by Amazon back in 2004. They realised that the old Pareto principle, otherwise known as the 80/20 rule was no longer applicable to the way their sales were distributed. Let me explain.. In retail sales of the past, very approximately of course, the 80 percent of profits were derived from 20 percent of products. Which meant that close to 80% of stock had such low levels of demand that given the limitations of physical shelf space, products that fell into the less popular 80% were rarely stocked and were almost never sold.

This principal was dramatically turned on its head when based on their very quantifiable and accurate sales data, Amazon realised that a whopping 98% of their products were sold at least once a quarter. Because of the sheer volume of online sales, this has meant a massive boost to their overall sales. Similar phenomenon was experienced by iTunes, Netflix and other online retailers. Whereas in the past, such companies would only maintain a catalogue of “Hits”, the new digital distribution channels created ability for the previously untapped goldmine of niche products to compete as equals next to the “Hits”. Why do you think there has been a gradual decline in popularity of the “Top 40″ type shows?

To illustrate this statistic a little better, consider the fact that an average book store has 100,000 books on its shelves. This 100,000 cutoff of the entire catalogue is where the long tail only begins. Amazon’s combined sales of the long tale products amount to the staggering 1/3 of their overall sales. In 2010, that 1/3 translated into $11.4 Billion dollars of revenue. Not too shabby for the long tail of sales that traditional “offline” book stores are simply not in a position to take advantage of.

You are probably starting to see the power of the “long tail” and may be wondering what exactly that means to us marketers and how can we profit by it?

Well here the concept that explains it all: Popularity no longer has the monopoly on profitability!

I’ll say it again, popularity no longer has the monopoly on profitability. In other words we don’t have to target “popular” products or niches in order to be profitable and if you need any further convincing, I am sure Amazon’s $11.4 Billion should do the trick.

Lets say there is a group of people that are “heavily” into tricked-up Soviet motorcycles of the 1950′s… Now, these people have always been there, but in the past it would have been hard to impossible for them to satisfy their need for related information and products. Such group of people are the very definition of a “hungry niche” that is desperate to spend money to satisfy their unique interest. Who is providing it to them? Why not you?

There are millions of such “long tail” groups out there and we as internet marketers are perfectly positioned to respond to their ever growing demand and profit handsomely as a result. And the wonderful aspect of it all is that such transactions are a classic win-win proposition.

There are almost infinite number of “long tail” opportunities for you to discover, dominate and start feeding the demand. You simply need to find yours, give your customers EXACTLY what they want (they are desperate!) and start winning.