Listen to enough conversations on the internet and you’re bound to run into the concept of the long tail. It is a fascinating concept that helps define how people use the internet and helps clarify how real estate professionals can be successful on the internet.
The long tail is a concept that was first popularized by Chris Anderson as an article in Wired back in October of 2004 and grew into a popular blog devoted to the subject. The essence of the Long Tail is defined by the following chart:
In this chart, the red areas represent the most commonly sought after (and served) markets… I think of them as the “best sellers”. The yellow area represents the niche markets that only appeal to a small subset of people, and due to (the lack of) economies of scale, these markets tend to be under-served in most industries.
The concept of the long tail is that successful on-line business have (with very few exceptions) thrived by providing adequate services to the people under the yellow area of the curve. Sure you can go to Amazon to find the latest best sellers (red area), but you can also go to Amazon to find hundreds of thousands of titles that you won’t find at your local bookshop (yellow area). Same thing with eBay. The internet is best situated to serve otherwise “hard-to-serve” people.
But economies of scale don’t explain everything. The real beauty of the long tail is that it is often much easier to provide exceptional service to customers in the yellow area of the curve. If someone is searching for a generic topic on Amazon like [popular fiction
The Long Tail and Real Estate
Recently, Chris over at RealtyBlogging asked “How are real estate and blogging alike?”, and this is my answer. Both real estate and blogging thrive when they effectively serve a local and/or niche market (i.e. the yellow area under the curve).
The idea behind this should really be second nature to successful real estate agents who know they couldn’t possibly serve all the niches within a major City. Rather, my experience has been that successful agents will say that they began by providing exceptional service to a small subset of people. Maybe their niche involves houseboats or condos, or a specific neighborhood… The specific niche doesn’t matter. The important aspect is that a real estate agent realized that they were never going to be able to serve everyone well, so instead they focused on a small subset of people and learned that market inside-and-out.
Similarly, blogs almost always come with a strong point of view and serve a niche market well.
In addition, the internet has allowed a few companies to do a very similar thing that real estate professionals have always been doing. Namely be extremely relevant to a small subset of the overall population. Not only has Amazon and eBay found success this way, but Google has created a billion dollar industry out of this concept. The idea behind Google Ads is that they provide relevant ads to users on obscure topics. I doubt many lawyers would consider putting up a banner ad on Yahoo to attract people looking for mesothelioma lawyers, but give these lawyers a chance to reach people who just searched for [mesothelioma lawyers] on Google, and they are willing to pay $54.33 for one click!!!
This extremely relevance is exactly how the real estate agents of the future will be successful on the internet. Not only that, but I happen to think that blogging is a great way for agents to get out from under the “red” of the curve (where most real estate websites live… and die) and out into the long tail where their niche knowledge will be appreciated and rewarded!
Dustin –
It is this kind of article that keeps me reading RCG. Well done and thank you.
–Jim
You know, this is actually not that dissimilar from politics now as well. If you appeal to the just the right small constituency, you can thread the needle and get someone elected to major political office that wouldn’t otherwise win a majority of public opinion.
Great post. I agree with the premise that blogs enable real estate agents to enhance the image of their personal expertise through blogging. I live in Central Florida and I am still amazed at how many realtors and businesses have yet to embrace this philosophy.
There was an excellent article in Rismedia on this subject as well. I just found this site and I will definitely be back for more.
Technology is no doubt changing the real estate industry and it’s very important for agents to embrace the change, do a little research and jump on the bandwagon. My colleague Paul Chaney said it best, “I get the sense that, for the most part, local agents and brokers have no clue (or very little) as to what amounts to a coming sea-change in this industry and am concerned that many Realtors may find themselves obsolete, out of a job, or at least certainly out of that hallowed 6% commission. Somebody ought to warn them, don’t you think?”
Brilliant post Dustin!
Great post Dustin. Right on the money and nicely summing up the philsophy behind my real estate blog. I too am amazed at how few seem to “get it,” while silently hoping it stays that way for a few more years. Frankly, the profession could use a little thinning of the dead wood.
Thanks for sharing your thoughts Dustin! I knew we’d get a great response from you! Much appreciated.
Interesting article. I had never really thought about it in quite that way but in retrospect I can see that it is true that the Real Estate agents that have the most trouble try to generalize instead of specialize. This is partly why I just recently created Your Area Home Team with an associate. Focusing in on particular area and marketing your self as the person to go to is definately the best approach to a solid Real Estate career.
I’m glad the article was well liked. I’ve had it in my mind to write a “long tail” article for quite a while and was inspired by some questions that were asked at our recent meetup.
Great post – I believe that there is also room for more general real estate blogs. I am not saying it is easy, but I have found that covering more international markets appeals to a wider audience. The real estate markets that I operate in have been very slow to pick up on blogging and I am going to use this to my advantage. I am looking for guest bloggers to help with covering some countries that I have little knowledge in. I think although the site as a whole is very generic it will be full of little niche sections serving different groups of people.
I would be interested to see what you think.
Beware of specializing too much, however. Because of this Long end of the Tail, a client and their agent can find all the community information, including schools scores, commutes, education levels,etc. If an agent concentrates on one geographic area or type of real estate transaction, he/she won’t be around if that one segment of the market wanes either, nor be able to fully assist his/her clients. Being a “neighborhood expert” might sound good, but what if a client wants to live in say, Issaquah, but can only afford Kent or Auburn. If you say to that client, sorry I only work in Issaquah, then you’re stuck trying to find someone in Auburn that you trust as much as you do yourself. What if the client wants to start investing. If you stay with your clients through their entire real estate life, you may be selling them a residence in one city, an investment condo 100 m-300 miles away, helping them with their 1031 exchanges and Roth and 401K investments. All this, of course, depends on the agent’s skill set because of course, what is most important, is to provide the best possible service to the client.. So maybe, there is a specialy there, the ‘life of the client’ specialty.
Good post Dustin. Over at Redfin we’re going to put the neighborhood blogs you talked about on a map alongside listings. http://www.redfin.com/blog/redfin/2006/04/the_long_tail_and_a_new_way_to_1.html
That’s really cool! I look forward to seeing how you integrate blogs and listings on one map!
Dustin-
Thanks for the post. I have been wanting to tackle the long tail myself and got lazy I guess.
I think that you can take it further and deal with the topic from an engine searchers perspective.
The long tail deals in relevance as you say. However relevance usually works hand in hand with specificity
But there is an added benefit. It is low hanging fruit. Non-competitve phrases that are easily ranked high in the SERPS. Why? no competition and heavy relevance means heavy lead conversion.
The problem. Low volume that makes it hard to justify spending time on one phrase that might get you one visitor, despite the high conversion.
This is why blogging makes sense, because one can sytematically go after these tail keywords naturally as one gets additional benefits of blogging other than search traffic.
The downside is that it is not very fast and not very scalable.
However, it does in my opinion makes more sense than going only after large keywords that sure gets big traffic, but do you really think every single person typing in seattle real estate wants a realtor?
Does he not want maybe a property manager, a commercial lease, or maybe a house to rent?
Now see what you did Dustin? I feel an article brewing. It will be at http://houseblogger.typepad.com
Dustin-
Thanks for the post. I have been wanting to tackle the long tail myself and got lazy I guess.
I think that you can take it further and deal with the topic from an engine searchers perspective.
The long tail deals in relevance as you say. However relevance usually works hand in hand with specificity
But there is an added benefit. It is low hanging fruit. Non-competitve phrases that are easily ranked high in the SERPS. Why? no competition and heavy relevance means heavy lead conversion.
The problem. Low volume that makes it hard to justify spending time on one phrase that might get you one visitor, despite the high conversion.
This is why blogging makes sense, because one can sytematically go after these tail keywords naturally as one gets additional benefits of blogging other than search traffic.
The downside is that it is not very fast and not very scalable.
However, it does in my opinion makes more sense than going only after large keywords that sure gets big traffic, but do you really think every single person typing in seattle real estate wants a realtor?
Does he not want maybe a property manager, a commercial lease, or maybe a house to rent?
Now see what you did Dustin? I feel an article brewing. It will be at http://houseblogger.typepad.com
This is a great way to explain why serving a niche market can reap such great returns.
Great Article
-Randy
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