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Advertising to Gay Consumers Bucked Industry Decline in 2001

Following several years of tremendous growth in the advertising sector, 2001 was a tumultuous year for many media companies. The first alarm sounded with the burst of the dot-com bubble in 2000, followed by the shock of the Sept. 11 terrorist attacks. While the double-whammy of events fast-tracked the country into economic recession, the media industry still struggles with the aftershocks of the current advertising recession.

Historically, during advertising recessions, the budgets of niche-marketing programs are the first to be cut, as marketers tighten budgets and hope to have the most impact with their dollars by appealing to the broadest audience possible. For the gay, lesbian, bisexual and transgender (GLBT) market, 2001 showed some hopeful, countercyclical trends and offered some encouraging signs of strength, despite modest declines in ad spending in gay media.

According to the "2002 Gay Press Report," while ad spending in overall consumer magazines declined 6.2 percent in 2001, spending in gay print media declined a relatively modest 1.7 percent. Additionally, the lower rate of decline of ad spending in gay print media (compared to overall print media) followed years of rapid growth in the sector. In 1994, $53 million was spent on gay media, and by 2000, spending had peaked at $211 million, the report revealed.

"Generally, niche markets do not fare as well as general markets during tough economic times," said Howard Buford, CEO of the New York-based advertising agency Prime Access, which published the "2002 Gay Press Report" with Rivendell Marketing, a media-representation firm. "In tough economic times, advertisers and marketers tend to focus on their best customers, and I think in the past, niche media has suffered more. But overall, it's probably suffering a little less this time because marketers are feeling that the general message is falling on general ears and [marketers] now want to speak to consumers who, research has shown, are their best customers."

The report revealed that 72 brands from Fortune 500 companies were actively marketed in the gay consumer market in 2001. Over the past year alone, companies such as Chrysler, Ford and Sears have also explored targeting the GLBT segment. Particular gains in spending were seen in categories such as recruiting/jobs, pet care, travel and religious/church organizations, which each experienced more than 200 percent rates of growth in 2001.

Buford said the modest decrease of ad spending in gay print media shows that advertisers have realized the importance of targeting GLBT consumers. He added that, as niche markets have been segmented into increasingly smaller subgroups, media segmentation has reflected this market change.

"There's more segmented media today than ever before," Buford said. "For example, ads on cable TV or in targeted magazines and newspapers let marketers really address the 20 percent of the population that accounts for 80 percent of sales."

One bright spot behind the somewhat gloomy media climate was the increased number of advertising efforts created specifically for the gay and lesbian market. The report found a 34 percent increase of ads tailor-made for GLBT media. According to Todd Evans, CEO of Westfield, N.J.-based Rivendell Marketing, marketers are no longer simply relying on generic ads developed for the mass market to reach GLBT consumers. Additionally, national advertisers are becoming increasingly comfortable with the idea and process of tapping the gay market.

"There's no real shock value in targeting the gay market anymore," said Evans, "not that there ever really was. Marketers are saying, 'We don't have enough money for the greatest number of eyeballs, so we're going to focus in on our consumers within various segments and concentrate there.' "

Evans said no clients have received major negative backlash from pursuing the GLBT market, adding that the decline in spending has more to do with budgetary concerns than philosophic ones. "It seems like now, at this particular time, the declines are a matter of focusing budgets rather than the taboo of the gay market."

Buford said as marketers reassess their budgets, a growing number continue to target GLBT consumers in gay media, because gay consumers have responded positively to gay-friendly marketers.

"One of the really strong messages that's coming out of the issue of the gay market is brand loyalty, and loyalty to companies that support the community," said Cathy Renna, news media director at the Gay and Lesbian Alliance Against Defamation. "So when it's a combination of supporting a gay media outlet, such as PlanetOut or the Advocate, in addition to the inclusive advertising reflecting the market, I think companies understand that sends a strong message and it's something that people within niche markets will respond to."

In addition to modest gains in certain advertising categories appearing in gay media, the report also concluded that the representation of GLBT consumers in mainstream media has seen some gains as well.

But has there been a trend of gay representation in advertising in general?

"It hasn't been an overwhelming trend, but there is definitely a trend," said Michael Wilke, executive director of the Commercial Closet, an online repository of ads that feature GLBT representation.

Wilke said marketers are increasingly savvy to the reality that gay consumers like to see themselves portrayed in advertising messages aimed at them.

Buford added that part of the reason why certain industries, such as financial services, have continued to address the gay market is because competitors have already reached out to the market, so there's some catch-up to do.

"This is true of automotive, where foreign automakers, like Subaru, have made inroads with the gay market," said Buford. "It puts the Fords and Chryslers in a defensive mode to gain share within the segment."

Wilke agreed, adding, "There are more advertisers all of the time who are there, in general, and more specifically, for many, also who are there in their own category of business. So if their competitor is already [targeting gay consumers], and is well established, many companies come into the market defensively, so that they don't lose out."

Evans cited the marketing campaign for Bridgestone/Firestone that appeared in magazines such as the Advocate and on Web sites such as PlanetOut as doing a good job at portraying real customers who happen to be gay and lesbian.

The bottom line is that gay media has charted the rocky waters of the advertising recession fairly well, and despite a decrease in spending on gay media, there's resilience in the market as marketers continue to fine-tune messages to reach out to this group.

"It seems that even in hard times, gay media has done relatively well. It shows the continued interest, even if we're still talking modest numbers," said Wilke. "The problem is that while there are many companies that are interested in the gay market, it's like an Olympic-size wading pool. All of these companies are in only about an inch deep. Very few of them are in deeper than that. So there's a lot of interest, but not a lot of spending."

"The report shows that the realm of companies investigating the gay market has stayed strong," said Evans. "And I really think that 2003 will turn out to be a good year for gay media."


Kipp Cheng, DiversityInc.com. October 30, 2002

Copyright © 2002 DiversityInc.com. All rights reserved.