The document discusses the challenges of marketing to fragmented audiences. It notes that audiences are more dispersed across various niche communities and marketing channels than ever before. It provides examples from the past of more concentrated audiences, such as the baby boomer generation, who dominated TV viewing. However, it argues that people now want to consume media in their own personalized ways. Thus, smart marketers must find ways to reach consumers across an expanding range of online and offline channels. It provides several case studies of companies adapting their marketing approaches to this new environment of audience fragmentation.

1. Marketing Challenges in the
Era of Fragmented Audiences
Stepping Stones

2. 2
Stepping Stones | The Challenge of Fragmented Audiences
Effective Marketing is Harder Today Than At Any Time in The Last 100 Years!
Why?
1) Audience Fragmentation
2) The Increasing Importance of Niche Communities
3) The Explosion of Marketing and Communication Channels

3. 3
Stepping Stones | The Pig in the Python
Seventy-six million American children were born between 1945 and 1964. This group is
unprecedented in terms of its size and cohesiveness.
Source: Wikipedia.

4. 4
Stepping Stones | The Glory Days of Audience Concentration
The Baby Boomer era
had the highest
audience concentrations
in the history of
mankind.
Definitions:
Rating: Percent of
households with a TV that
watched a show
Share: Percent of
households watching TV
who watched a show
Source: Nielsen Ratings Service.

5. 5
Stepping Stones | The Glory Days are Long Gone
Source: Nielsen Ratings Service.
The Top Shows : Week of Feb 23, 2015

6. 6
Stepping Stones | The Big Years for Music!
The Top Selling Albums of All Time
The Top Selling Music Artists of All Time
Source: Wikipedia.

7. 7
Smart marketers reach consumers where THEY are.
Stepping Stones | People Want To Be Where they want to be
Consumers are
migrating to their
own worlds.

8. 8
Stepping Stones | The Online Mantra
Does this mean that marketers need to
focus completely on the Internet?

9. Stepping Stones
9
What Percent of U.S. Retail Sales Are Online?
A. 6.7%
B. 27.2%
C. 51.4%
D. 73.7%
The latest data from the Census Bureau of the Department of Commerce estimates U.S.
retail e-commerce sales for the fourth quarter of 2014 at about $79.6 billion, an increase
of 2.3% from the third quarter of 2014.
While $79.6 billion sounds like a lot, it still only represents about 6.7% of total retail sales,
which topped out at $1.187 Trillion in Q4 of 2014.

10. Stepping Stones
10
Department-store operator Nordstrom Inc.'s direct-sales business, which includes Web sales,
made up nearly 10.7% of its total sales last year.
For many prominent retailers, the migration to online sales has been glacial.
“A Target spokesman said that the retailer tells investors online sales currently make up less
than 2% of its $73 billion in overall sales.”
“A PetSmart spokeswoman said the chain considers e-commerce a growth opportunity but
because it currently represents less than 1% of its sales, it isn't a material part of the
company's business.”

11. Stepping Stones
11
Other retailers and brands have made the switch to the web in a very robust fashion
Web and catalog purchases made up about a third of sporting-goods retailer Cabela's Inc.'s
$2.7 billion in merchandise sales in 2014

12. 12
Stepping Stones | The Cycles Are Shortening
1872
Montgomery
Ward publishes
the first mail
order catalog
1960s – First
widespread use
of computers in
data
processing.
August 12,
1981
IBM Personal
Computer,
Introduced
1994 Amazon
Founded
Early
1990s
Consumer
use of the
Internet
2004
Facebook
2006
Twitter
2010
iPad

13. Stepping Stones | The Imminent Demise of Facebook?
13
Search query data for “Facebook” and “MySpace” obtained from Google
Trends overlaid on top of each other. The data for both curves are scaled such
that 100 corresponds to the maximum weekly Google search queries for
“Facebook” over the plotted time period. Search queries for “MySpace” peak at
10% of the maximum weekly search queries for “Facebook” in this time period.
This study can be downloaded at:
http://arxiv.org/pdf/1401.4208v1.pdf
A January, 2014 study by a pair of
Princeton Graduate students
predicts the imminent demise of
Facebook.
1) The growth rate of a social
network can be compared to
the spread of an infectious
disease.
2) MySpace’s decline can also be
compared to the trajectory of an
infectious disease.
3) Similar to MySpace, Facebook
has begun to show signs of
decline after a period of rapid
growth.
4) The conclusion? Facebook will
be dead within three years.
This study has been roundly
criticized for its weak methodology.

14. 14
► Facebook endured a 29% fall in active users among U.S. teens from fourth quarter
2012, when 79% of all U.S. teens contributed to the site
► Users on the site between the ages of 18 and 29 dropped by 2 percent between
2013 and 2012.
► In 2013, 71 percent of adults older than age 30 use Facebook, up from 67 percent
in 2012.
► In 2013 approximately 45 percent of seniors aged 65 and older used Facebook, up
from 35 percent in 2012
Stepping Stones | What’s The Truth About Facebook?
Source: the Pew Center for Internet and
Conclusion:
While young people are migrating away from Facebook to new applications, older
adults (i.e. the people with money) are flocking to the site. Maybe this isn’t so bad after
all?

15. 15
►Adapt
Stepping Stones | What is a Marketer to Do?
►Never Stop Learning
►Keep one foot on the bleeding edge while the other foot stays in the past

16. 16
Stepping Stones | Hasbro Toys
The first step for Hasbro Toys in 1999 was to do a direct
mail launch to demonstrate the viability of a direct-to-
consumer approach for their brands.
It worked!

17. 17
By 2003 we were ready to launch
Hasbro’s first e-commerce initiative –
The HasbroToyshop.com
Stepping Stones | Hasbro Toys

18. 18
We used the full range of marketing channels available in the early 2000’s to create the fastest e-
commerce toy launch!
Stepping Stones | Hasbro Toys
E-mail Search Engine Marketing Online Promotions

19. 19
We are bringing
new techniques
to manufacturing
clients like Lionel
Trains to drive
people to their
retail partners.
Stepping Stones | Lionel Drive-to-Retail

20. 20
Clicking on the
“Find a Target
Store” link takes
you to Target’s
store map
feature.
Stepping Stones | Lionel Drive-to-Retail

21. Stepping Stones | Challenges for the Racing Industry
For the past decade, the horse racing industry has been trying to change its image.

22. Stepping Stones | Challenges for the Racing Industry
For better or worse, this is the audience at most race tracks.

23. 23
We are changing the dynamic through “drive-to-
venue” mystery vouchers. The first step is to
promote the event. This can be done by sending e-
mails like the one at right.
It can also be advertised through social media,
online banners, direct mail or any other direct-to-
consumer communication.
Stepping Stones | Mystery Vouchers

24. 24
People click through and land on the registration site.
Stepping Stones | Mystery Vouchers

25. 25
Although Vouchers are
automatically e-mailed to the
consumer, they can also log
back into the system using
their e-mail address and
password to retrieve another
copy if they lose it.
1)The dynamically generated
QR code can be scanned
by authorized smart
phones, tablets and kiosks
to immediately show what
the person has won and
then mark them as
complete in the system.
2) An alpha-numeric code is
also provided in case the
person has damaged their
QR code through folding it,
etc.
3)We also show information
about the person to confirm
their identity.
Stepping Stones | Mystery Vouchers

26. Stepping Stones | Challenges for the Racing Industry
The Result:
We are driving new
audiences to race
tracks.

27. 27
Stepping Stones | The Amazon Factor

28. 28
Stepping Stones | The Amazon Factor
Let’s explore “Forum of the Dead”

29. 29
Stepping Stones | Authoropolis
Our client is Authoropolis, who is “Hand Selling” e-books.

30. 30
Stepping Stones | Authoropolis
Strong search
capabilities are the
focus of Authoropolis.

31. Stepping Stones
Remember to Respect the Past
While You Are Building The Future
Stepping Stones
www.greymatterdirect.com

32. Sources
After Decades of Toil, Web Sales Remain Small for Many Retailers
Aug. 27, 2013 8:31 p.m. ET
http://online.wsj.com/news/articles/SB10001424127887324906304579039101568397122
US E-Commerce Sales as Percent of Retail Sales:6.00% for Q4 2013
http://ycharts.com/indicators/ecommerce_sales_as_percent_retail_sales
http://appleinsider.com/articles/12/03/23/best_buy_sells_nearly_as_many_iphones_as_a
pple_does_directly
http://www.dallasnews.com/business/business-headlines/20140227-best-buy-posts-293-
million-in-4q-profit-as-sales-shift-online.ece
http://techcrunch.com/2014/01/23/facebook-losing-users-princeton-losing-credibility/
http://www.usnews.com/news/articles/2014/01/27/dont-predict-facebooks-decline-yet