Online business discovers pink purchasing power
As a group, they spend nearly 10 times as much time online as the average internet user – 25 hours a week compared to 11 hours a month. They are among the most technologically savvy of all consumers, and are far more likely to buy new electronics when they come out than most other consumer groups. For both men and women, they have higher incomes and are better educated than any other consumer group online. And they show strong company and brand loyalty to organisations that target them – whether or not services are specialised to niche tastes.
The group? Gays and lesbians. If you’re talking about the colour of money, a series of recent studies and research reports show that the pink euro, pound and dollar is the currency of choice online.
“Gay men and women have the technology attitudes and demographics that marketers dream about. Gays are among the first to adopt new devices and online tools, making them prime targets for digital marketing as well as emerging technologies,” states a July Forrester Research study.
Though the numbers may seem small, with only 5 per cent of men and two per cent of women stating they preferred same-sex partners in a recent survey of US households by Forrester Research (though another 20 per cent declined to answer the question), an estimated 17 million Americans are homosexual and their collective buying power is tallied at $464 billion – outstripping US Asians or Hispanics and, in per capita terms, well ahead of all US minority groups.
The Gay/Lesbian Consumer Online Census (GLCensus), an OpusComm Group and Syracuse University research partnership, found that nearly 32 percent of the male respondents and 17 percent of female respondents in their 2002 survey reported household incomes of $100,000 or more.
“Two things also mitigate against this market being ‘small’. The first is gay and lesbian buying power, and the second is that this is a fairly identifiable audience. There are clear websites that people go to, and events like Gay Pride that make it easy to target them,” says Forrester analyst Mr Jed Kolko, author of the July study.
It’s a niche market that, it turns out, isn’t very niche. Consider that the number one American website to reach single men with household incomes over $75,000 is – no, not CNN sports, but Gay.com, according to research by @plan.
Those kinds of demographics have made gays and lesbians the target of campaigns by big name companies online, not just those which offer gay-specific services or products. Gay.com pulls in big name advertisers like American Airlines, Viacom, Procter & Gamble, BMG Entertainment, General Motors, Merck, US Airways, Chase and IBM. Gay.co.uk has snapped up Debenhams, Visa, Sainsburys, Amex Insurance, and AOL.
Research shows that gays and lesbians are among the most company and brand-loyal of consumers as well, responding to companies that advertise in gay publications and websites. A gay-specific approach has made companies like American Express and Absolut the leading brands with gays and lesbians. Overall, gays and lesbians are 87 per cent more likely to give their custom to companies that target them specifically.
Mr Kolko’s research shows that gays and lesbians are more likely to be university graduates, to be online, to have broadband net connections, to shop online, to bank online, and book travel online. They are more likely to own almost every type of digital device or gadget than heterosexuals, excluding camcorders and video game consoles. And, they are more likely than straight people to join in every conceivable type of online activity from dating to downloading music, using instant messaging, reading newspapers online and sending e-greeting cards. The only things they don’t do in greater numbers are visit sport sites and play games alone.
Based on those kinds of figures, PlanetOut Partners, the parent company of Gay.com, has adopted an aggressive marketing approach to go after advertisers. “The average middle-class family spends over one million dollars to raise a child through age 22. Some gay people have kids. Most don’t. Where are they spending that money? On your products and services,” says one advertiser pitch on its corporate website.
Advertisers are clearly biting. The company startled many in the struggling online publication world recently when it announced it had gone into the black based on the kind of revenue its cluster of online sites pulls in. These include Out & About Travel, PlanetOut.com, eight international sites for Gay.com, and a shopping site targeting gays and lesbians, Kleptomaniac.com (the name comes from a comment by conservative former US senator Trent Lott, that homosexuals were sick and should receive medical treatment just like alcoholics or kleptomaniacs).
Dublin-based Gay Community News is hoping it can wield some of that advertiser draw in the Irish market. Its website, which gets about 3,000 hits a month, was revamped into a more interactive format recently after GCN relaunched in a glossy magazine format, says GCN manager Ms Marie Mulholland.
“Even with the constricted website that we had, we were getting 400-500 hits a week, and we knew there was something to respond to,” she says.
Online advertisers already include an Irish travel company and bookstore, but GCN believes it offers an attractive audience for British companies, too, and is looking at potential advertisers.
Not for profit, community sites like Outhouse.ie – the online presence for Dublin-based gay, lesbian, bisexual and transgender community centre Outhouse – and GayCork.com, a news, discussion, and small ads site, say the internet is an important resource for gays and lesbians.
“So much about this particular community goes through the web,” says Outhouse manager Ms Louise Tierney. People use it to get information, to meet others, to buy products with an anonymity and sense of like-mindedness that us often unavailable in the ‘real world’, she says. She notes that Outhouse provides PCs and internet access for Irish people who don’t have the high incomes touted in the studies.
The internet provides “a way for gays to talk in common,” says Mr Jonathan Neville, webmaster for GayCork.com, which also gets about 3,000 visitors monthly. “The web has totally opened that up.”
Mr Kolko believes these are some of the reasons why so many gays and lesbians are online – for them, the web is transformative. “The fact that the virtual [gay] community is so strong suggests it has changed the experience of being gay,” he says.
It also has changed the attitudes of many mainstream companies who might once have been cautious about advertising in gay and lesbian publications, online or offline – much less running gay-themed advertisements in the mainstream media, as Ikea, Tanqueray and others have done.
For companies, it might not be a bad idea to think seriously about viewing the online world through rose-tinted glasses.
Note: This article originally appeared in the print edition of the Irish Times on the 6th of September 2003 and it appears here with the kind permission of Karlin Lillington.
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