David Soskin

1
Understanding the long tail - why small customers
are vital to web success

• David Soskin
• CEOCheapflights.co.uk
• 1st May 2007

2
Agenda

• What is the long tail?
• Why vertical and Web 2.0 search extend the long
  tail
• Outlook for long tail orientated companies

3
Acknowledgement to Chris Anderson
4
The new growth market Products you cant find
anywhere but online

• Source Chris Anderson

5
Britannica vs. Wikipedia
64,900
7,000,000
Source www.amazon.com en.wikipedia.org
6
Aggregators
Communities/ user generated content
Advertising services
Information
Transactional
Digital goods
7
The long tail The root calculus

• the lower the costs of selling, the more you can
  sell. As such, aggregators are a manifestation of
  the second force, democratizing distribution.
  They all lower the barrier to market entry,
  allowing more and more things to cross that bar
  and get out there to find their audience.
• Chris Anderson

Source The Long Tail
8
Crap vs. choice

• Old economy crap matters
• New economy choice matters

9
Book Sales (USA), 2004

• Source Book Industry Study Group

10
Google Ultimate long tail company?

• By going to the bottom with self-service, we
  were able to reach advertisers who fell below the
  threshold of traditional advertising. And by
  going all the way to the top, we were able to
  capture very large and historically underserved
  businesses as well as a whole new area that never
  had access to these kinds of online services.

Eric Schmidt, CEO Google
Source The Long Tail
11
But how good is Google search?

• The ultimate search engine would basically
  understand everything in the world, and it would
  always give you the right thing. And we're a
  long, long ways from that.
• - Larry Page, Google Co-Founder
• Search as a problem is only about 5 solved
• - Udi Manber, CEO of Amazons A9.com search
  engine
• It's clear there's a lot of room for
  improvement, there's no inherent ceiling we're
  hitting up on.
• - Sergey Brin, Google Co-Founder

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Search can get a lot better
Horizontal Search
Vertical Search
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Cheapflights
Before
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Not much use for Borat
15
UK Cheapflights users seeking deals to Kazakhstan
April 2006 March 20077,117 clicks
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What appeals to Borat?
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End Result Borat is a happy user
18
Long tail of advertisers
19
Long tail of advertisers
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The Cheapflights long tail

• Founded 1967
• Employees100
• Specialize in Greece Cyprus

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The Cheapflights long tail

• Founded 2004
• Employees18
• Specialize in Florida flights,
• holidays cruise

22
The Cheapflights long tail

• Founded 1966
• Employees 39
• Specialize in Bulgaria, Croatia,
  Montenegro, Slovenia,
  Serbia
  and Romania

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The Cheapflights long tail
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Dohop A global flight planner
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Travel is a natural subject for the long tail
highly fragmented
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Long tail and Web 2.0
Social Networking
User Reviews
Search
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User reviews
Then
Now
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Frommers vs. WAYN

• HB slide

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Trusted Places example a restaurant in London


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The long tail Social networking

• Now
• World
  

• Then
• club
  
• local pub
• street
• school
• charity
• hobby
• sport

• Your -

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Time spent online

• More and more people are using the internet
• People now spend an extra 1 hour 16 minutes each
  month online compared with 2001
• 16-24 year olds spend even more time online
  11 hours 20 minutes per month on the internet

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How to create a thriving long tail business

• 1) Make everything available.
• 2) Help me find it.
• Chris Anderson

Source The Long Tail
33
Long tail of the internet
2007
2002
Web 2.0 Reviews Social networking Blogging Ver
tical search
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Conclusion

• Long tail is suited to the internet
• Vertical search is an ideal long tail
  application
• Web 2.0 has accelerated the long tail
• Understanding and using the long tail
  represents a significant and growing business
  opportunity

35
Thank youQuestions, suggestions, feedback or
complaints welcomedavid.soskin_at_cheapflights.com