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New Realities in Publishing (II): Aggregation and Niche Marketing

Angelique van Engelen - 5/23/2005

Aggregation is the new economy of scale and to pretend you're part of the action, your business plan must include success-guaranteed modern-day jargon describing endlessness, rather than the bulkiness of your venture's marketing campaign. Depth of penetration has become more important than breadth of scale.

Venture capitalists have always had a knack for pragmatism and it's this sector that basically invented the idea of the amenability of business plans. Some twenty years ago, you'd set up a company by directly copying the business plan of the nearest similar company to you. There wasn't all that much room for attaching huge importance to philosopical meandering because you were pressed for time to make sure your production schedules were anywhere near on the target in your head.

Not so today. There's an art to conjuring up the models that have been tried and tested by real live scenarios and that the boys and girls in business schools have devoured or deconstructed at the leisure that this activity would result to permeate the rest of society with. New terms like time management, learning curves, tipping points have burst forth on the scene simply because they were not only fashionable phenomena needed to re-kickstart new efforts but also because they are part of the rapid development that the business sector is leading the rest of society in. Are we again going through a hoist of temporary phenomena, facilitating a work ethic that's more playful than ever and company names that are jazzier as they are snappier?

Even though the bubble's burst and spluttered all over pinstriped suits, it appears venture capital daredevils are sticking to models that underly the action packed new ventures that are evermore going to shape tomorrow's world and provide tons of fun today. Only this time, the models are more representative of real life than ever. Or are they? Perhaps the world has changed during the last three years, or perhaps the business community has become more patient and less expectant. Most likely its a mixture of both that makes people believe that there's a need for new companies that cater to a world in which there's not necessarily immediately a target market as such.

The new trend might initially come accross as murderously torturous to the untrained eye. But when venture capitalists present you with the benefits of the "long tail", this is the shift from mass markets to obscure niche markets. It might be a really marketable option. Apparently, due to our increased reach into the obscurest of markets by means of technological processes such as aggregation and syndication, a new world of opportunity has opened up. The venture capitalists, always on the bloodhound trail for new markets, are almost turning the world upside down to devise strategies for this virgin territory. Electronic commerce, which is an inert phenomenon in itself but which can be steered from a few central access points, is employed to realise this. And it might work.

The Economist writes in a recent article that term long tail in itself is not new. "[It has] long been used in statistics to refer to a feature of "power-law" distributions, such as the frequency with which different words are used in English: there are a few common words that are used a great deal, and a long tail of increasingly obscure words that are used less often," according to the article. That's pretty much the idea in the long tail jargon that venture capitalists are getting to wild about too.

The online marketing community is very much at the fore of the long tail action, simply because it is closest involved with the aggregation tools which are going to have to prove that previously unprofitable transactions can be profitable. The way the logic goes is that accessing the niche, one will be able to create demand by precise targeting. End users are likely to be a lot more amenable to being presented with offers of items they really have an interest in rather than being mass marketed to in the mainstream. They may well increase their spending as a result. Business case or what? And it's not necessarily all that torturous either because -and this is the beauty of the virtual world where there are no real limitations on space- providers can simply market their entire stock.

Those business areas that are already tapping into this include the entertainment sector, which is in essence always exploring when what's to be marketed and where. If there's a sector that's faced with personal tastes as a barrier to entry, it's this sector. But the more intensive marketing that's the result of anything long tail makes for a good case elsewhere too. It likely will overthrow the pyramid shape of classic marketing models, whereby the most popular (read; mass marketed) products are given most prominence and biggest marketing budgets. There's no need to be lumbered with Stephen King books if you are really interested in obscurama politics. Information about Mr X, Y and Z's obscure politics works will be drip fed you at a cost for the marketer that's a lot more rational. The end of mass marketing as such is neigh, it appears.

The resulting impact on society is that we're likely to revert to the kind of conversations our great grandparents were having, who lived before the media revolution. As our common denominators are changing or perhaps disappearing altogether, we're likely to become a lot more individualistic again, sharing experiences that are possibly slightly more authentic. Perhaps the fast paced development of technology isn't all that bad. After all, a conversation starting with 'did you know' is bound to be a lot more interesting and long lasting than one starting with 'did you see'.