Several web services (Gmail, Flickr, del.icio.us, etc.) demonstrate the value of using tags to categorize information. You can tag files on your computer and get many of the same benefits.
"Manually" tagging your own information is easy to do and can be worth the minor extra effort. This discussion will focus on adding tags to the "documents" (text, word processing, spreadsheets, diagrams, etc.) on your computer, but the concept applies just as well to other information like email (Gmail supports tags, but calls them "labels"), pictures, video clips, etc.
Tags help you find information faster with improved search results and "indirect" searching.
Adding tags to a file lets you associate it with terms that come to mind when you think of it. Sometimes we create content related to a topic without directly mentioning the topic within the content. For example, if you're keeping a file of notes about refinancing your mortgage, you may never write the words "mortgage", "loan" or "home" in your notes — perhaps you always write "refi" — but you do want to find the file when you search using any of those terms.
"Indirect" searching lets you use the power of that association. The tags you add to your files enable your desktop search tool to create a more meaningful index of the words, and improves the chance of finding what you're looking for, even if you search using a word that's not actually in the document. For lack of a better term, I'll refer to this as "indirect" searching.
(If you're not using a desktop search tool, you should try one; Copernic, Google, and Yahoo are all free.)
Tags allow you to discover, create, and use relationships in your information.
(I added this section on 2005.05.07, after writing it in my article about taking notes.)
Seeing and understanding the relationships among your information allows you to make better use of it. Look at the example of tags below in "Example 1". Since I tagged it with several keywords, I don't have to remember where I filed my notes on the refinance -- I can search for it using various words I'd expect to be related to what I'm looking for, and several of the words I think of will lead me to the notes file, as well as all the other files that have the tags. You can experiment with using multiple tags to develop different levels of tag intersections.
There are many ways to get value from using tags. For example, if you add a "STATUS" tag to your notes, you can search by status. When I search for "STATUS: OPEN", I get a list of all my notes on unresolved tasks and projects, which is another approach to the idea of having a task list. This way, I can easily review & prioritize what I want to work on next, with all the related notes right at hand, a click away.
Edit file properties or add to the body
In Windows, (you can do something similar on other platforms) you can add keywords to most (all?) files in just a few steps, by editing the file's properties:
Open the folder that contains the file
Select the file (click once on it)
Open the File menu, (or just right-click)
Select Properties -> Summary
Enter your tags in the Keywords section
For many applications, you can do same thing when you have the file open.
Text files: You can do the same for plain text files. I add my tags directly to the body of mine, since my template for taking notes has a "header" section, and it's easy to just include tags along with the subject, contact, and date I already add to each document.
SUBJECT: Refinance 2005
TAGS: home, house, mortgage, refinance, money
CONTACT: Joe @ Mortgage Broker Co. 800-555-1212
DATE: 09:00 2005.04.01
Adding even one tag when you first save the file adds value
Get into the habit of adding at least one tag as soon as you first save your file (which should ideally be soon after you create it). That way, even if you don't add more as you progress, you can benefit from having done it. Some programs let you set an option to be prompted to add summary information when you save your work (you'll only be prompted once, as long as you click "OK" the first time, even if you don't add anything).
You don't have to add tags to all files for this to be useful, but the more you do it, the more useful it will be for you. I don't think I'll go back and do this for all my existing files, but I'm definitely going to do it moving forward. The value of tagging will become increasingly apparent as we begin taking more advantage of the great search tools that are available now and being integrated into future applications and operating systems.
This doesn't appear to work with .avi and .wmv files, but does with .mpg and .mov files.