Industry embraces buying power of gay market

Thirteen years ago, a TV spot for IKEA caused something of a sensation:

Two middle-aged men shop for a new table, speaking to one another in tones that suggest they may be a couple. The commercial prompted protests and bomb threats targeting U.S. retailers.

Times have certainly changed since then, with marketers and advertising agencies recognizing the sheer buying power of the gay and lesbian community. GLAAD has even established two advertising awards — one for print, another for digital. Yet the market remains as elusive as it is lucrative.

For one thing, gays and lesbians are proving increasingly difficult to pigeonhole. The gay community was once seen as marginal, targeted by only a few advertisers (most often liquor companies) in a few gay-themed publications. Today, with GLAAD’s advertising nominees ranging from designer Marc Jacobs and Paris Las Vegas to travel agency Orbitz and the United Church of Christ, the market has opened up considerably.

Damon Wolf, founder of the Crew Creative agency, who has coordinated print campaigns for “The Bourne Supremacy,” “Entourage” and “The Sopranos,” puts it bluntly: “We don’t consider the gay and lesbian market a niche market anymore. We can’t. It’s made it to the mainstream.”

Financially speaking, the market has surpassed the mainstream. According to a study released in January, the buying power of gays and lesbians in the U.S. will reach $660 billion by the end of this year. By 2011, the study projects, that number will climb to $835 billion. And demographically, gays are more likely to spend more on luxuries and travel, because so many fall into that sought-after group marketers call “dinks” — dual income, no kids.

Identifying the market is one thing, but targeting it effectively is quite another. For Wolf, media-buying is key.

“You can take any movie and target your audience through online media-buying,” he says. “I can take the ’40-Year-Old Virgin’ poster and run it in a gay and lesbian magazine. But as far as conceptualizing art and content to target them — no, that doesn’t work. They’re too mainstream.”

One concern for American companies is the threat of an IKEA-style backlash from conservative consumer groups. Ian Johnson, whose Out Now Consulting provides gay-targeted marketing services for a range of companies in Australia and Europe, concedes that the risk is there.

“Some of the work we do for our clients in Europe and the U.K. would not be able to be done in the U.S.,” he says.

Yet he cautions that trying to avoid a backlash can do more harm than good.

“Brands generally have more to fear from alienating gay customers and their supporters if they try to react to the harassment by antigay lobbying groups,” Johnson says. “As more lesbian and gay people come out, and more people become supportive of gay and lesbian equality, the importance of those who support gay people is of far greater value than that of those who are rabidly homophobic.”

For illustration, Johnson points to the uproar that followed Ford’s decision to pull Jaguar ads from gay publications after the American Family Assn. threatened a boycott. Though Ford denied that the AFA’s boycott influenced the decision, gay rights groups worldwide threatened a boycott of their own in response, and Ford quickly reinstated — and expanded — its ad campaign.

More recently, Snickers came under fire for a Super Bowl commercial that many complained was homophobic. Apologetic press releases were issued, and the spot has not aired since.

Wolf adds, however, that overzealously patronizing the gay market is just as dangerous: “As a gay man, I don’t want to be treated differently; I want to be entertained.”

Johnson admits that gay consumers “have seen some very poor efforts by certain brands seeking to get their wallets open,” but he still believes there is a place for targeted marketing.

“Most members of the market share a common bond by virtue of their ‘otherness,’ which creates significant marketing opportunities,” he says. “The challenge is to create good gay marketing that works by recognition of both the commonality that exists between gay consumers, while at the same time acknowledging the vast diversity that also exists amongst the group.”

Recognizing that this is easier said than done, he adds: “It’s not always straightforward, but good fun nonetheless.”

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