COMING OUT IN PRINT

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Last fall, EarthLink distributed 250,000 CDs in five gay and lesbian magazines — including The Advocate, Out and Curves — in hopes of attracting more customers to its Internet service. The Atlanta-based company had learned that gays tend to spend more time online than other Americans, so it decided to test market directly within the gay community. Since the promotion began, the company has noticed a surge in the number of downloads for the software that was included in the gay magazines, according to Elizabeth Halkof, EarthLink's brand manager for the consumer dial-up service. Says Halkof, “Results so far have been very encouraging.�

EarthLink is just one advertiser from an increasingly broad array of industries buying ad space in gay and lesbian publications. Although advertisers once shied away from gay publications, over the past few years mainstream businesses have begun to recognize the power of the gay press. As recently as 1997, almost half (49.1 percent) of the gay press's ad space was composed of “personal� ads and telephone-sex services as well as companies and organizations promoting gay events, meetings, fund-raisers and clubs. Today, those ads account for less than a quarter (21.5 percent) of total ad pages, reflecting the growing presence of mainstream companies.

In 2001, advertisements for hotels and resorts accounted for 4.5 percent of the total ad space in gay and lesbian magazines, newspapers and entertainment guides, up from 1.2 percent in 1997. Other sectors with a growing presence in these publications include real estate, which saw ad space grow to 6.3 percent in 2001 from 2.3 percent in 1997, and financial services, where ads surged to 7.8 percent from 5.5 percent in 1997, according to the 2002 Gay Press Report, published annually by New York City-based agency Prime Access, Inc. and Rivendell Marketing Company, a Westfield, N.J., media placement firm that specializes in the gay and lesbian market.

Why the change? Industry insiders point to an increasing awareness that gay magazines and newspapers offer a relatively inexpensive and highly effective way to connect with gay consumers, who, on average, have more disposable income and free time than the general population — not a small consideration in a down market. The gay press is also touted as a way to take advantage of gay consumers' ability to define trends and legitimize new products. Additionally, the gay press has proven to be a more efficient medium for reaching gays than television or radio.

Therefore, advertisers have been flocking to the gay press. Between 1997 and 2001, total ad dollars in gay and lesbian publications doubled — to $208 million from $100 million, according to the Gay Press Report. And despite the recession, ad spending has remained fairly steady in gay publications during the down market: While ad spending in all consumer print media dropped 6.2 percent, to $11.9 billion in 2001 from $12.7 billion in 2000, gay publications saw a far smaller decline of only 1.7 percent, to $208 million from $212 million.

Circulation numbers for the gay press are relatively small, though growing: Gay publications reached 3.7 million readers in 2001, up from 3.5 million in 1997, according to the Gay Press Report. But advertisers generally believe that they can reach a greater share of the gay market through niche media than through mass-market publications. And although mainstream titles such as Vanity Fair and Men's Health attract a sizable share of gay readers, targeting gays through mainstream magazines is not nearly as cost-effective as using the gay press. For example, a one-page, four-color ad in Men's Health can run $109,625, while the same ad could cost just $9,500 in The Advocate and reach a more consistently upscale audience, albeit fewer individuals.

Although it's unclear what share of the 13 million to 15 million gay and lesbian population over the age of 18 reads gay publications, there's a strong incentive for advertisers to reach even a small portion of this $450 billion market. After all, gays and lesbians present an attractive demographic profile: They are early adopters who spend more than average on discretionary goods and services, such as travel and entertainment.

Because gays and lesbians are geographically concentrated, they're also relatively easy to reach through local gay newspapers. Gays can be found in 99 percent of the counties, but 1 in 5 hails from New York City, Los Angeles and San Francisco. Roughly 45 percent of same-sex unmarried couples are living in just 15 major metro areas, according to New York City-based market research firm Packaged Facts.

In 2002, when tire company Bridgestone/Firestone reached out to the gay market, it ran ads in gay newspapers in the top 12 gay markets as well as in top-tier national gay and lesbian magazines.

“To get overall national awareness and be efficient with our dollars, gay publications were our best option,� says Laramey Lawson, senior vice president and media director at Bridgestone/Firestone's Nash-ville, Tenn.-based advertising agency, Gish, Sherwood & Friends. “Local gay publications complement the national exposure by speaking directly to gay consumers in their local market at the local level.�

More companies are opting to supplement ads in mainstream publications with ads in gay newspapers and magazines. While the beverage and entertainment categories traditionally dominated gay publications, new categories are making inroads. Among advertisers that bought ad space in gay publications last year were Procter & Gamble's Eukanuba pet food brand, Neutrogena Men (a personal care brand of Johnson & Johnson) and financial services companies Wells Fargo and Bank One.

In the mid-1990s, Subaru of America was one of the first mainstream advertisers to make its way into the gay press. Seven years later, the company still maintains a presence in magazines such as Out and The Advocate. “Advertising in the gay press pays off, and it's highly efficient,� says Michael Whelan, national manager of corporate communications at the Cherry Hill, N.J.-based car manufacturer.

Other automotive companies are joining Subaru. Just last year, Ford Motor Co. commissioned Washington, D.C.-based strategic marketing firm Witeck-Combs Communications to conduct a study to determine which of its brands would have the most appeal in the gay market. Ads for its Land Rover vehicles have already appeared in publications such as The Advocate.

Increasingly, the gay press is also seen as a way to reach consumers viewed as particularly influential. Because gays and lesbians tend to be early adopters who have strong word-of-mouth clout in the mainstream market, they can help launch or legitimize a product, says Stephanie Blackwood, cofounder and account director of New York City-based Double Platinum, a gay and lesbian marketing firm. Some call it the Will & Grace spillover effect, she says. It works like this: First, an upscale gay male in New York City or Los Angeles buys a new product. He then influences his urban, educated female friends, who may work in the fields of communications, fashion or the media, to buy that product. These women, in turn, talk to each other about what to buy, where to eat and even what to buy a boyfriend or father, influencing purchase choices. The result: What began as a gay-targeted marketing campaign becomes an efficient and affordable way to promote a product in the mainstream.

In a similar strategy, ads in the gay press helped propel underwear brand 2 (x) ist into the mainstream. Launched in 1992, the brand didn't begin to target gays through ads until 1996. Because gays help set the trends in men's fashions, the gay press was an obvious fit for the underwear brand, which became a crossover success. “It helped catapult us to the next level,� says Jeff Danzer, the company's executive vice president of marketing. Sales for the underwear have risen to more than $20 million from just $3 million in 1998.

And though other examples of spillover have been observed, it's still rare for companies to use a Will & Grace marketing strategy, says Double Platinum's Blackwood. Part of the reason, she says, is that many firms simply lack information about the gay market. This kind of approach tends to work best for image and style products — such as fashion, spirits, wine, cologne and high-end skin care — says Howard Buford, president and founder of Prime Access.

Gay press readers tend to be a cutting-edge crowd, and also to be well-educated and affluent. Based on subscriber studies, they're also largely an urban audience. A survey of 4,200 readers of newspapers in the National Gay Newspaper Guild, an association of 12 local gay newspapers with a combined circulation of 753,000, revealed that two-thirds of readers have a four-year college degree and 1 in 5 has a master's degree. Average individual income is $47,600, and 6 in 10 have household incomes over $60,000, compared with just 3 in 10 U.S. households. Two-thirds are employed in professional or managerial positions.

Subscriber demographics for other gay publications reflect a similar profile. Affluent, educated and professional, gays are likely targets for a full range of upscale brands and services. For example, based on subscriber studies, the median household income for readers of The Advocate is $90,000, 9 in 10 Curve readers are college graduates, and half of Passport readers spend between $1,500 and $3,499 per person on a vacation.

Building a relationship with the gay and lesbian market requires an ongoing commitment, says Bob Witeck, CEO and founding partner of Witeck-Combs Communications. After being stigmatized or ignored for years, gays and lesbians may be skeptical of firms that advertise only once or twice rather than making a long-term commitment. They do, however, appreciate companies that identify with a position or cause popular within their community. A September 2002 online Harris Interactive survey found that 75 percent of self-identified lesbian, gay, bisexual and transgendered (LGBT) respondents said they prefer to do business with companies that are committed to diversity. Only 38 percent of heterosexual consumers felt the same way.

Advertisers should also take care to target gay consumers by crafting messages that reflect gay and lesbian sensibilities, with true-to-life portrayals of the population. One print ad campaign that was trying to target the lesbian market featured supermodels in leather. “It's a white straight guy's fantasy of what two women together look like,� says Arthur Korant, creative director of Double Platinum.

Before a national rollout, White Plains, N.Y.-based Pernod Ricard USA tested a print campaign in New York City and Los Angeles for Mojito Club, a Cuban-style beverage. Bearing in mind that the gay community usually likes to see itself reflected in advertising, Double Platinum designed ads emulating the party pages in magazines. Each insert featured real people from the gay community sampling the drink at events sponsored by Mojito Club. Within six months, the company served 12,000 samples.

The good news for advertisers interested in tapping in to this market is that they have many options. In addition to the large national magazines, such as Out (circ. 100,000) and The Advocate (circ. 96,000), there are controlled circulation publications. Among them are HRC Quarterly, which goes out to some 200,000 members of the Washington, D.C.-based Human Rights Campaign, a nonprofit organization that promotes equal rights for the LGBT population, and Power Up Quarterly, a 16-page newsletter sent to 5,000 lesbians in the entertainment industry.

On the local front, gay publications range from monthly magazines, such as The Orange County and Long Beach Blade (circ. 20,000) to more frequently published local or regional newspapers, including Bay Windows, a Boston-based weekly newspaper for gays and lesbians in New England (circ. 22,000), and New York Blade News (circ. 36,900), a New York City-based biweekly. In all, there are about 285 gay or lesbian publications in the U.S., and about 10 come or go each year, says Todd Evans, president and CEO of Rivendell Marketing. The number of national magazines, local arts and entertainment guides as well as local newspapers is expected to continue growing.

For now, at least, the gay press is the best media channel available for reaching gay consumers. Radio and TV for gays aren't established enough to be competitive, marketers say. Though multimedia giant Viacom has been in talks to launch a premium gay and lesbian cable channel, expressly gay programming currently consists primarily of Showtime's Queer As Folk and NBC's Will & Grace. There's also a smattering of individual characters on mainstream shows, such as Kerry Weaver, the doctor who came out as a lesbian on ER. As for radio, some stations draw relatively large shares of gay and lesbian listeners. However, because these consumers aren't tracked, it's not yet possible to quantify them, says Travis Pagel, founder of Osmosis Medialab, a New York City-based marketing agency.

Given its newfound standing as the leading choice for many marketers who want to target trendsetting gay and lesbian consumers, the gay press is poised to gain even greater traction among mainstream advertisers in the years to come, experts say. “Because of the opinion-leading nature of the market, the gay press will continue to be the first stop for a number of advertisers,� says Prime Access's Buford.

EMERGING SECTORS

Financial services, health and fitness, and automotive companies are buying more ad space in the gay press.

CHANGE IN SHARE OF TOTAL AD SPACE BY TYPE OF AD:

CATEGORY 2000 2001 PERCENT CHANGE
Financial services 5.9% 7.8% 32.2%
Alcoholic beverages 0.4% 0.5% 25.0%
Medical/health 5.3% 6.5% 22.6%
Health/fitness 3.8% 4.5% 18.4%
Retail/home 6.9% 8.1% 17.4%
Auto 2.0% 2.1% 5.0%
Restaurant/food/beverage 14.7% 15.4% 4.8%
Arts & entertainment 7.4% 7.3% -1.4%
Events 5.5% 5.0% -9.1%
Source: 2002 Gay Press Report, Prime Access, Inc. and Rivendell Marketing

DEVOTED READERS

The average reader of a National Gay Newspaper Guild paper has read five of the last six issues.

Number of last six issues read or looked at 5
Total amount of time spend with last issue 51 minutes
Percent likely to use a product or service advertised 94%
Percent likely to purchase products or services of national businesses advertised 89%
GENDER
Male 86%
Female 14%
AGE
18-34 26%
35-44 36%
45-54 24%
EDUCATION
Graduated from a 4-year college or more 67%
Have master's degree 21%
Have doctoral degree 8%
EMPLOYMENT
Employed 88%
Professional/managerial 60%
Employed in top management 20%
INCOME
Average individual income $47,600
Average household income $66,700
Percent with individual income over $50k 41%
Percent with household income over $60k 55%
Source: National Gay Newspaper Guild, 2000

TOP OF THE LINE

Strong reader demographics make national gay publications an attractive proposition.

THE ADVOCATE CURVE NEW YORK BLADE NEWS OUT PASSPORT
Genre News/entertainment Pop culture, news New York City, state & natl. news Fashion, culture & entertainment Intl. gay and lesbian travel
Readership/gender 74% male 99% female 84% male 84% male 65% male
Median age 42 37 43 41 34
Median indiv. income $56k NA $47k $69k $61k
Median HHI $90k $76k $58k $77k $87k
Frequency Biweekly 8X/year Biweekly Monthly Monthly
Format Magazine Magazine Newspaper Magazine Magazine
Circulation 96,000 68,200 36,900 100,000 23,000 subs w/addtl. dist. of 140,000
Founded 1967 1991 1997 1992 2001
Sources: Individual companies; SRDS Consumer Magazine Advertising Source, 2002
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