The gay and lesbian market is out of the closet.
An increasing number of large corporations, including Atlanta-based EarthLink Inc. and Delta Air Lines Inc., are advertising in gay and lesbian publications, driving double-digit growth at those publications this year.
Also, broadcast and cable networks are introducing new gay-themed programs that have become instant hits; and advertising agencies are opening divisions to produce appropriate ads for the market.
"This is the emerging market," said Cindy Abel, founder and president of Bizvox Marketing Communications, an Atlanta agency that specializes in advertising for the gay and lesbian market. "Times have changed."
It's a small but affluent market. Most experts estimate the spending power of the nation's 13 million to 15 million gays and lesbians at $450 billion annually, second only to the $533 billion that the nation's 30 million African-Americans spend each year and above the estimated $420 billion that the nation's 31 million Hispanics spend.
EarthLink first tested ads in gay and lesbian publications last year after studies showed that homosexuals are among the first to try new technology and spend more time on the Internet than the other segments of the population, said Elizabeth Halkof, brand manager for the company. She declined to release the results of the test, but the company expanded the advertising in April.
"It looked like an opportunity we should explore," Halkof said. "It was a good strategic fit."
EarthLink produced a CD with a mix of music popular with gays and lesbians and distributed about 300,000 of the CDs as part of the company's advertising campaign and related promotions. The company will release a new CD mix in September.
"We are looking at continuing this through 2004," Halkof said. "Our goal is to make all our customers feel like we are including them."
Delta began advertising in Southern Voice in July. The company is buying a full-page, full-color ad in every issue of the weekly newspaper through the end of the year, said Bob Gunby, sales director at the paper. Delta also is a sponsor of the annual Atlanta Pride Festival for gays and lesbians each June.
"Delta is reaching out to the gay community," Gunby said. "It's very impressive."
Delta launched the campaign because it wants to include all travelers in its marketing efforts, said spokesman John Kennedy.
"Delta recognizes the gay and lesbian community as being a very important part of our community within Delta and we choose to support them through sponsorship of events and advertising," Kennedy said.
Avis Rent A Car System Inc. also entered the market for the first time this year. Avis is spending 5 percent of its $27 million advertising budget on a campaign to attract gay and lesbian customers, according to Advertising Age magazine. In addition to ads in gay magazines, Avis is sponsoring gay and lesbian film festivals and donating a portion of its revenue to the Gay and Lesbian Alliance Against Defamation.
Bridgestone/Firestone North American Tire LLC also launched a new national advertising campaign aimed at gays and lesbians this year.
Even local tourism officials have used an ad campaign targeted at gays and lesbians. The Atlanta Convention & Visitors Bureau ran ads in gay and lesbian publications last year to promote the Atlanta Pride Festival weekend, which attracts about 300,000 people each year.
According to the 2002 Gay Press Report, an annual study of advertising in the gay and lesbian media, ad spending in the publications has quadrupled since 1994 to $208 billion in 2001, the last year for which information is available. Advertisers spent $54 billion in the publications in 1994, the first year of the study. The next Gay Press Report will be released in September.
Rivendell Media Inc. of New York, an agency that sells space in 225 gay and lesbian publications and helped produce the report, was seeing a 50 percent annual growth in its business each year before the terrorist attacks in 2001. The advertising recession that followed the attacks slowed growth last year but business is improving this year and the company expects to return to a 20 percent growth rate next year, said Todd Evans, president and CEO of the agency.
"This market is finally maturing," Evans said. "It has taken a long time."
Bizvox, which opened in 1998, doubled its billings last year over the previous year and expects to double billings again this year Abel said.
Advertising in The Gay Pages Inc.'s yellow pages directory for the gay community in Atlanta has grown at least 10 percent every year since the publication began 14 years ago, said Marci Alt, one of the publishers of the directory. The circulation of the 460-page directory has increased to 100,000 copies, up from 50,000 copies five years ago, Alt said.
Creaxion Inc. of Atlanta opened a division for gay and lesbian advertising in May. The new division is being led by the company's president and CEO, Mark Pettit, who is gay. Since opening the division, about one-third of the agency's clients have expressed an interest in expanding their advertising into the gay and lesbian market, Pettit said. The agency has added Dwellings, an Atlanta real estate agency that specializes in marketing intown property to gay and lesbian buyers, to its list of clients since forming the new division.
"It's all the rage," Pettit said. "People understand that this is a smart place to be."
One reason more large corporations are running ads in gay publications is the growing acceptance of the lifestyle, experts say. Those same advertisers once feared retaliation from their traditional customers for associating with the controversial demographic.
"That's all over with," said William Waybourn, president of Window Media LLC of Washington, D.C., the owner of the nation's largest chain of gay newspapers, including Southern Voice in Atlanta. "People aren't as afraid of the gay market as they once were."
"It's a storm that is easily weathered," Bizvox's Abel said.
Halkof said EarthLink had expected that some customers "would be uncomfortable" with the company's presence in the gay and lesbian community, but the negative reaction was less than anticipated.
Not everyone believes that companies should advertise in gay and lesbian publications, despite the financial resources of the market. Peter LaBarbera, senior policy analyst for the conservative Culture and Family Institute in Washington, D.C., calls it "immoral" and "exploitative." He believes that many heterosexuals will quit buying products from companies that associate themselves with gays and lesbians.
"Right now, it is in vogue but people are getting sick of the gay stuff," LaBarbera said. "Most Americans believe it is wrong to endorse homosexuality."
LaBarbera doesn't consider gays and lesbians a minority like African-Americans and Hispanics. Gays and lesbians are different because of their behavior, not their ethnic background, he said.
"Niche marketing based on behavior is a new thing," he said. "It's a sign that companies have sold their souls."
Posted on aef.com: August 11, 2003
Jim Lovel, Atlanta Business Chronicle. August 8, 2003
Copyright © 2003 American City Business Journals Inc.. All rights reserved.