Advertising and The LGBT Market

The Challenge and the Opportunity

The U.S. economy is comprised of many overlapping consumer groups--and each consumer belongs to several different buying segments. Corporations sometimes struggle to reach even the most lucrative niche markets, especially in a time when media is fragmenting. Effectively reaching niche markets is the key to profitability for many major brands.

The gay and lesbian community is one of the few niche markets with an economy of scale and enough buying power—estimated at over $700 Billion annually--brand loyalty, and trend-setting status to sustain long-term sales and consumer relationships.

Many successful brands have gotten a toe-hold in the U.S. by reaching the gay demographic first, mostly through advertising in old media vehicles and by adopting gay-friendly employment policies. Absolut Vodka, Subaru, and Southwest Airlines are but three examples. Bigger companies, from Ford Motors to Walmart to American Airlines, have also fought hard for shares of this important demographic.

Until now these companies were the exceptions. In the past, a lack of understanding of the community limited marketing efforts. However, the situation is changing rapidly as social acceptance of gays and lesbians accelerates, breaking down marketing barriers in the process.

Perhaps the important problem until recently is the conspicuous lack of quality media channels to reach this emerging market. Old media, by virtue of limited circulation and obsolete distribution, cannot possibly reach. The new media in this market has been dominated by dating and “hookup” sites that marketers eschew.

The opportunities for savvy marketers are significant. Contrary to popular belief, the gay and lesbian market is not monolithic. It is segmented not only by demographic variables of age, gender, race, ethnicity, and parental status but also by psychographic variables such as, interests, prioritiesand consumer behavior. While there is broad diversity within the community there are notable common denominators that differentiate them from their nongay counterparts. A majority of gays and lesbians have more disposable income because they tend to be either single or in double income relationships without children. In general this means that gays and lesbians have more leisure time and discretionary income for entertainment, travel and leisure activities.

For marketers wishing to reach this niche, understanding the modern LGBT consumer will lay a strategic foundation for understanding not only what productsand services are appropriate but how to market for profitability. This market presents a large and rewarding opportunity for many products and services but especially for brands in the entertainment, travel and leisure market segments.