When Google Instant was introduced a few months ago, there were assumptions early on that the introduction of Instant would have a negative effect on 'long tail' keywords (longer, wordier keywords which receive less search volume), encouraging those making it their SEO or PPC strategy to target these types keywords to change their ways. The general argument was this: if someone is halfway through typing a phrase and they're presented with results, they could be distracted and click on an earlier result, meaning that they will have searched on a shorter phrase.
Fast forward to the present day and the conclusion for many still seems to be to focus on root/head terms more than they might have done previously, and it's true that some long tail has seen a drop or even a plummet in search volume (just look at the month-on-month patterns on "[type] insurance comparison site" searches on Google's Keyword Tool, compared to "[type] insurance comparison" or just "[type] insurance").
Even recently, one of the speakers at the recent SES London event talked about how Google Instant "is cutting off the long tail," as mentioned by an attendee's tweet.
However, one thing we've noticed is that the long tail isn't dead. Far from it. In fact, we've seen some long tail keywords achieve the same or higher search volumes than shorter, less wordy keywords in the same industry since the introduction of Google Instant. Recently we undertook some keyword research for a website targeting "young driver insurance" keywords. What surprised us was how "cheap car insurance for young drivers" had the same number of searches per month as "car insurance for young drivers" (18,100 searches on exact match, respectively).
We also noticed that "cheap car insurance for young female drivers" - a very long keyword - had a respectable 1,000 searches each month, which is more than many other shorter keywords in the same industry.
Notice the differences between them? Our long tail keyword terms have "cheap" in front of them. If we take young drivers for example, a demographic which is often hit with expensive insurance, it is understandable that the young driver's mentality is to start their search with the word "cheap" - perhaps their intended search was "cheap car insurance" and that'll do.
However, as they start to type that phrase...
..."cheap car insurance for young drivers" might catch their eye. They're a young driver, so this suggestion will appeal to them.
...and more suggestions are thrown up. If they're a young student or a 17 year old in particular then one of the other suggestions might catch their eye instead.
...and "...young female drivers" is a suggestion. This might explain why that keyword in particular has a surprisingly large volume of traffic - searchers fitting that demographic might not have intended to search on that keyword originally, but after seeing it suggested to them, combined with the fact that it fits their demographic, they've pursued it and chosen it as their search term.
This suggests that the long tail hasn't died off at all, as might have been previously assumed, but what it does mean is that the long tail has potentially changed its form. The start of the tail (i.e. the first few keywords that a searcher types into Google) has become more important, and therefore businesses targeting certain keywords should try to understand the psychology of their customers/searchers. As seen in our example, the young drivers after insurance were searching for "cheap car insurance," not just "car insurance."
However, it can be argued that this hasn't been caused by Google Instant, but by Google Suggest (a.k.a. Google Auto-Suggest), which has been around for years, predating Instant by quite some time. Either way, the most important takeaway is to identify what a potential visitor might be thinking, looking beyond the obvious and expected and trying to think more like the customer - something a bit of keyword research can really help with.