Long Tail of Ads, and Speech

Dan Gillmor's Sunday column rightly points out that Google's valuation is perhaps only justified if you take a longer term view of how it leverages The Long Tail.

The potential for this is larger than most people have recognized. In theory, the Net-based advertising market is almost unlimited -- extending to any one person with any one thing to sell.

A hint of what's possible can be found in a recent article by Chris Anderson, the editor of Wired Magazine. In ``The Long Tail'' he argued for a new way of looking at economics in the entertainment industry. Make everything available at a low cost, and help people find it, and the need for blockbusters diminishes -- because there will be enough aggregate demand for the non-blockbusters to more than make up for the difference.

The Internet makes this possible, notes Anderson (disclosure: he is a friend), by removing physical-world scarcity. ``Now, with online distribution and retail, we are entering a world of abundance,'' he argues, persuasively.

This is true for the advertising marketplace, too. Google doesn't covet (yet) the dollars that General Motors spends advertising on television. But it cares deeply about a GM customer selling via her home-based business. She can now afford to target her advertising precisely, and at a price she can afford. This is a new world.

So far, most of the focus on the Long Tail has been unleashing inventories of digital goods and latent demand for the other 80%. Dan is absolutely right to look at Google's advertising market in this way. But there hasn't been enough focus on the people powered tail, or the latent supply of user generated goods by the other 80%. Partially because while the industry is enamored with user-generated content (after all, its practically free!), most of what is produced isn't content itself, but sharing through conversations.

If there is one site to share today, its Never Forget: Internet Vets for Truth. A handful of people collected and stands ready to deliver a torrent of political speech through media. From Mosh to Fahrenheit 9/11 to John Stewart -- this is the ultimate answer to Sinclair and a clear case of the demand side supplying itself.