Marketing Challenges in the Era of Fragmented Audiences

Stepping Stones

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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

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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.

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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.

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Stepping Stones | The Glory Days are Long Gone

Source: Nielsen Ratings Service.

The Top Shows : Week of Feb 23, 2015

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Stepping Stones | The Big Years for Music!

The Top Selling Albums of All Time

The Top Selling Music Artists of All Time

Source: Wikipedia.

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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.

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Stepping Stones | The Online Mantra

Does this mean that marketers need to

focus completely on the Internet?

Stepping Stones

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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.

Stepping Stones

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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.”

Stepping Stones

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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

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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

Stepping Stones | The Imminent Demise of Facebook?

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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.

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► 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

American Life a.

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?

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►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

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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!

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By 2003 we were ready to launch

Hasbro’s first e-commerce initiative –

The HasbroToyshop.com

Stepping Stones | Hasbro Toys

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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

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We are bringing

new techniques

to manufacturing

clients like Lionel

Trains to drive

people to their

retail partners.

Stepping Stones | Lionel Drive-to-Retail

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Clicking on the

“Find a Target

Store” link takes

you to Target’s

store map

feature.

Stepping Stones | Lionel Drive-to-Retail

Stepping Stones | Challenges for the Racing Industry

For the past decade, the horse racing industry has been trying to change its image.

Stepping Stones | Challenges for the Racing Industry

For better or worse, this is the audience at most race tracks.

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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

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People click through and land on the registration site.

Stepping Stones | Mystery Vouchers

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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

Stepping Stones | Challenges for the Racing Industry

The Result:

We are driving new

audiences to race

tracks.

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Stepping Stones | The Amazon Factor

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Stepping Stones | The Amazon Factor

Let’s explore “Forum of the Dead”

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Stepping Stones | Authoropolis

Our client is Authoropolis, who is “Hand Selling” e-books.

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Stepping Stones | Authoropolis

Strong search

capabilities are the

focus of Authoropolis.

Stepping Stones

Remember to Respect the Past While You Are Building The Future

Stepping Stones

www.greymatterdirect.com

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