Personalization and the long tail

In "The Long Tail", Wired reporter Chris Anderson talks about how personalization is changing retailing. He starts with the example of the book "Touching the Void", a poor selling book that suddenly was in high demand when "Into Thin Air" became a bestseller:

What happened? In short, Amazon.com recommendations. The online bookseller's software noted patterns in buying behavior and suggested that readers who liked Into Thin Air would also like Touching the Void. People took the suggestion, agreed wholeheartedly, wrote rhapsodic reviews. More sales, more algorithm-fueled recommendations, and the positive feedback loop kicked in.

A few years ago, readers of Krakauer would never even have learned about Simpson's book - and if they had, they wouldn't have been able to find it. Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion.

This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it.

Chris then talks about the value of massive selection. For example, half of Amazon's book sales come from the back catalog (outside of the most popular 130k titles), the "long tail." But it's not just having massive selection. You need some way to help customers find and discover interesting titles in your massive catalog.

Netflix, where 60 percent of rentals come from recommendations, and Amazon do this with collaborative filtering, which uses the browsing and purchasing patterns of users to guide those who follow them ("Customers who bought this also bought ..."). In each, the aim is the same: Use recommendations to drive demand down the Long Tail.

This is the difference between push and pull, between broadcast and personalized taste. Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.

So far, personalization has most successfully been applied in retail, helping customers find what they want in a massive catalog of items. Shouldn't it work elsewhere? There's a massive catalog of news articles I never normally see. Can't personalization help me find interesting news? There's interesting web sites I never find using Google. Shouldn't personalization be able to help me?

In fact, personalization can help anywhere there is a glut of information. It's an implicit search, built from your behavior, and an excellent way to supplement explicit search, where you already know what you want. Personalization provides focus, helping you find and discover what you need.