In his book „The long tail” Chris Anderson talks about the growing importance of niches and its influence to the mass market. Take Rhapsody, an online music store, as an example. It has 1.5 million albums available for download, whereas a classic offline music store offers approximately 5.000 albums. What both online and offline sales channel have in common, is that they sell hit albums very often. But the difference is that Rhapsody can offer so much more albums because storage, manpower and distribution costs are much lower than in a store. In the end, Rhapsody makes 40% off its turnover with albums that are not available in music stores around the corner. This is the long tail. Everything is available and people demand it. Although long-tail products are requested only a few times per month, as a whole they are very important for the business, because they are still profitable.
The long tail approach is also applicable for search engine marketing (SEM) and search engine optimization (SEO). In the following I will explain it for both marketing channel. But let’s start with some facts that are valid for SEM and SEO as well.
A typical search pattern goes from frequency keywords to long tail keywords. Take as an example a young couple that wants to buy a house. They need money, so they search for loans:
1. search: loans
Type: frenquency keyword
What do they get? Very unspecific information from car loans to house loans, maybe even credit card offers. So they’ll have a new try:
2. search: house loans
Type: frequency keyword phrase
Now they get some valuable information about house loans, some interest rates from banks that are spread throughout the country, but nothing which makes them say: That’s it, let’s do it. So they have to go deeper:
3. search: compare house loans
Type: long tail keyword
Now they already have an overview of the interest rate range for house loans and know some banks that might also be located in their region. But they need a bank that is close to them, so they go even deeper:
4. search: compare house loans in Jacksonville
Type: long tail keyword
They finally found a website which compares all house loan interest rates in their hometown.
Other examples for long tail keyword searches could also be:
cheap house loans in Jacksonville, bank with low-interest house loans in Jacksonville,
Drawn as a graph, the above mentioned example would -for a whole website of course- look like this.
So, you are the bank and the advertiser, when do you want to become aware to the young couple?
One possible answer could be: the earlier, the better. This is when the bank is a big national player and has the goal to use search engines as a sales channel and for brand communication. They want to be found with the keyword „loan“ and pay a premium for many views and clicks but limited conversion. They see it as an investment into their brand.
A local loan broker would answer the question possibly like this: only in the 4th step with the keyword „compare house loans in Jacksonville”. He wants to be as close to the sale as possible. Any awareness before that just costs budget but doesn’t bring conversion which is totally uninteresting for him.
These two examples represent only the both extreme approaches of the use of search engines. Of course, in most cases they are mixed.
Search engine optimization (SEO)
The example above is a typical search pattern and normally up to 50% of the search engine traffic of a website is generated from these long tail search queries. For blogs the percentage can be even higher, up to 70-80%. Only a few websites that are ranked on page 1 for a frequency keyword will generate major traffic with frequency keywords.
As search engine optimization for page one or two for frequency keywords and keywords phrases is a really tough and long-lasting job, it is a good approach to start search engine optimization for long tail keywords first. This has several advantages:
1. faster results
For most long tail keywords there is only very limited competition. Due to their specific nature, only these advertisers who have a real interest, meaning who really offer the service or product, optimize for these keywords. For many others, especially professional SEOs, they are not so interesting to optimize for because the big money is promised with optimization for frequency keywords.
2. higher quality
Because long tail keywords are mostly very specific, a person who searches for them already has developed a certain, often deeper interest in this product, service or kind of information. This means the quality of the search phrase is higher and thus the likeliness for a conversion increases.
Search engine marketing (SEM)
For SEM campaigns the distribution of search frequency is often more frequency keyword centric because it is easier, though expensive, to get on page 1 with these keywords due to easy keyword booking. Experiences show that you can achieve with the frequency keywords, which by the way are often not more than 10 to 20 for one product or service, a relevant amount of traffic. But this traffic is often lower quality and results in higher cost-per-order (CPO).
Why lower quality? Because a search term like „loan“ is very general and can thus imply anything from information search, scientific interests, student’s research for a term paper or a purchasing desire. This is not clear in the first search step but becomes only clearer the deeper the search pattern goes.
Another point you should consider is that Google’s broad and extended match – which is often used – answers long tail keyword searches with frequency keyword bookings. This results in a dilution of the keyword reports because the reports will only include the keywords that were delivered by Google but will not show the actual search terms of the search engine users. It means that if a user makes a search for a long tail keyword like „lowest loan rates around Jacksonville“ but you only booked „loan“, your ad might be shown on basis of the keyword „loan“. In your report you will only see a click for „loan“.
Let’s make an example. A bank who wants to sell loans in their bank branches decides to use the Internet for the generation of customer addresses. They use search engine marketing and book 1000 keywords. 20 of them are frequency keywords and frequency keyword phrases. The rest are long tail keywords. Here is an overview how impressions, click-trough-rate (CTR), cost-per-click (CPC) and cost-per-order (CPO) of this SEM campaign could look like:
|Keywords||Impressions||CTR||CPC / USD||CPO / USD||Sales share|
|no. 1 to 20||7.700.000||4.10%||3.20||400||63%|
|no. 21 to 100||1.600.000||5.30%||2.70||200||37%|
|no. 101 to 300||500.000||5.80%||2.00|
|no. 301 to 1000||200.000||6.00%||1.70|
(Some readers of this blog know that I have detailed experience in search engine marketing (SEM) campaigns. Of course, no real data is used in this example, I just took my SEM experiences to create an own example, which is very realistic though).
Key learnings of the above example:
Sales volume: With a few frequency keywords you will generate a large part of your turnover, with many long tail keywords a smaller part. But the long tail sales volume is much too high to neglect.
Profitability: the turnover which is generated through frequency keywords is less profitable than the sales made with long tail keywords.
You want to know how long tail SEM / SEO works in China? Contact me here, so we can discuss about it.