Companies Begin Marketing to Gay Market

If the gay and lesbian community can thank Dr. Laura Schlessinger for anything, it might be that the outspoken radio personality has shown how important the gay and lesbian market is to corporate America.

Dr. Laura, the controversial radio host who has characterized gays and lesbians as “deviants” and a product of “biological error” has seen much of her core advertising base diminish in the past few months.

Companies such as Xerox, GEICO and SkyTel Communications have all pulled their advertising from Dr. Laura’s radio show, while Procter & Gamble has pledged not to advertise on her upcoming television program this fall.

That such mainstream companies are so concerned about losing the gay and lesbian market is proof of the community’s value to advertisers, say industry watchers.

A Valued Market

“Companies are more interested in the gay market than ever,” says John Aravosis, president of Wired Strategies, a Washington, D.C.-based online marketing and consulting company and co-founder of StopDrLaura.com. “They’re treating gay and lesbian employees with more respect than ever, and they’re becoming more aware that anti-gay prejudice is wrong,”

While the size and scope of the gay market is difficult to determine (since most market research reflects only those respondents who are openly gay), much of the research done to date shows that gay consumers often have more disposable income.

One recent finding by Simmons Market Research Bureau showed that gay consumers are two times as likely to own a vacation home, 5.9 times as likely to own a home theater system and eight times as likely to own a laptop computer than heterosexual consumers.

Loyalty Counts

Demographics aside, gay activists note the brand loyalty of the gay consumer is something that many companies would do well to attract.

“The bottom line is that as a market we are very brand loyal when we make purchases,” says Cathy Renna, spokeswoman for Gay & Lesbian Alliance Against Defamation, or GLAAD. “The controversy over Dr. Laura has been the most obvious demonstration of our influence as a market.”

A recent study by Harris Interactive and Witeck Combs Communications found that 74 percent of gay, lesbian, bisexual and transgender consumers polled said they would be less likely to buy a product from a company if they advertised on a program that expressed negative views of gays and lesbians, while only 42 percent of heterosexuals shared that view.

‘It’s the Way We’re Built’

The gay community has also been increasingly vocal about their distaste for shows like Dr. Laura’s. And since StopDrLaura.com went online in March, 10 companies have dropped their advertising from Dr. Laura’s radio show, with many of those companies pulling the ads because of the barrage of negative letters and phone calls from the gay community.

Premiere Radio Networks, which produces the Dr. Laura show, responded in a written comment about StopDrLaura.com: “It’s ironic that those behind this Web site preaching the right to their free speech will not allow Dr. Laura to have her right exercised. Instead, they disrupt a wonderful relationship between charter sponsors and Premiere, none of which have a stake in Dr. Laura’s TV show — the focus of this issue.”

Although many companies are just seeking to avoid controversy, others are embracing the buying power of the gay market. Automaker Subaru starting running a series of advertisements to select markets last October with the caption, “It’s Not A Choice. It’s The Way We’re Built,” a slogan that appeals to the gay and lesbian community.

“The ads are very specific and very obviously targeted to the gay and lesbian market,” says GLAAD’s Renna. “Every gay person I know sees that there’s definitely a sense that they’re being inclusive and trying to reach us.”

Not a Special Project

Reaching out to the gay and lesbian audience is just one part of the company’s niche marketing strategy that it has employed since about 1993, when the company discovered through market research that lesbians were among Subaru’s largest consumer groups, says Tim Bennett, Subaru’s director of marketing programs.

“There was really no magic to it other than we went to research consumers that were already buying our cars,” says Bennett. He notes that educators, health care professionals and people with an interest in outdoor sports were the other niche groups that Subaru discovered were among its core consumer base.

Other efforts Subaru has made to target the gay and lesbian community include offering a “Rainbow Card” which donates a percentage made on purchases to AIDS and breast cancer research. Subaru also features Martina Navratilova, who is openly gay, in a recent advertising campaign, along with other female athletes such as LPGA golfers Juli Inkster and Meg Mallon, and two-time Olympic medal skier Diann Roffe-Steinrotter.

While gay groups point to Subaru’s use of Navratilova as another gay-friendly move, Subaru insists that the campaign is targeted to the active woman rather than the gay and lesbian community.

The growth of the Internet is also contributing to the increase in advertising to the gay community because companies can target their message to the specific audience, without alienating other consumers. The anonymity of the Internet also makes it easier for consumers to identify themselves as gay, says Wesley Combs, partner at Witeck Combs Communications, a marketing firm that specializes in reaching the gay and lesbian community.

“If you look at PlanetOut.com and Gay.com and look at who their advertisers are, you’ll see some of the nation’s biggest advertisers,” says Combs. “That has been a major barometer of how corporate America thinks this is another way to reach another one of our customer sets. That’s a good sign when it becomes mainstream instead of a special project.”

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