Challenging the Long Tail Theory

Anita Elberse challenges the Long Tail theory in a well-written article in HBR this month.

The search-engine marketing (SEM) industry could serve as an excellent test case for the Long Tail theory and for Elberse’s criticism of that theory.  Advertisers bid on keywords in search engines (e.g. Google, Live Search and Yahoo) to advertise their services. An insurance company can bid on a keyword like “insurance” or on a long tail of keywords like “insurance mazda mx5 automatic” or “insurance 29 male boston ford focus”.
According to the “Long Tail” theory we would expect to find a long tale of obscure keywords. The tail is expected to generate more revenues than the head.
According to the critical theory we would expect to find that the long tail is flat/flattening and generates fewer revenues than the head. E.g. that Google generates >90% of revenues from less than 10% of keywords.

Myriad of bloggers and search-engine-optimisation (SEO) agencies reported that the “Long tail” theory is indeed applicable in their industry. Are they wrong? If they are not wrong, how can the critical theory explain this discrepancy? Is the critical theory universally applicable or are there special cases where the “Long Tail” theory does in fact prevail?

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