Ad spending booming for gay-oriented sites

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Gay.com network's recent announcement that it added American Airlines and Neiman Marcus Group to its growing list of mass advertisers demonstrates the Internet's viability as a medium to reach the gay market.

While a handful of marketers have targeted niche markets using TV, print and other offline media -- examples include Southwest Airlines' black-targeted TV spots and clothier Abercrombie & Fitch's print ads featuring homoerotic photography from Bruce Weber (which the marketer says also appeals to a youth market) -- until recently, relatively few mass marketers have targeted niche markets online.

Now, however, sites such as Gay.com, Gay.Net and onQ -- the three arms of Gay.com Network -- are fielding a slew of advertisers trying to reach gay men and lesbians, showing the power of the Web to reach niche markets.

`GAYS ARE SPENDING MONEY'

Gays are twice as likely as the general population to have a household income between $60,000 and $250,000, according to Simmons Research.

"Gays are spending money; this is definitely a viable market," said Adam Harriss, research analyst at Computer Economics, an information technology consultancy.

"Before the Web came along, it would take a very innovative marketing scheme, such as the one Abercrombie & Fitch used, and even that is a little bit risky," Mr. Harriss said. "But now there's really no risk to advertising to this niche because you have dedicated sections online that are for this community."

Gay.com had 2 million unique visitors and 7.52 million visits in October, according to Media Metrix. Current advertisers include Healthshop.com, IBM Corp., VH1, eBay, Intuit Corp.'s Quicken Mortgage, Intelligent Life Corp.'s Bankrate.com, Time Warner's TBS Superstation, Moet & Chandon champagne, General Motors Corp.'s Saturn and, most recently, AT&T@Home, the telco's cable-based Internet services arm, and Glaxo Wellcome.

American Airlines will launch its $250,000 sponsorship of Gay.com's travel area Jan. 1. James Hering, director of interactive marketing at Irving, Texas-based Temerlin McClain, American Airlines' agency, said the airline had been searching for ways to integrate interactive marketing into its overall advertising strategy.

"When you look at the different segments within travel, online is a great way to reach some very refined audience parameters," Mr. Hering said. "And when you look at the gay and lesbian travel market, the numbers are huge in terms of their disposable income and their tendency to be heavy travelers."

`DEFINITELY AT A TURNING POINT'

American wanted to do more than just banner ads, opting for a site sponsorship "that is going to create a connection with a community," such as Gay.com, he said.

Competitors include Gay Financial Network (gfn.com), Gay Wired (gaywired.com) and PlanetOut Corp. (planetout.com). PlanetOut has its share of mass marketers. Some of the site's gay-targeted ads are funny and irreverent: A Pets.com ad sports an attractive man naked from the waist up and the words, "Hot. Very hot: Back-to-school specials at Pets.com." The banner sends consumers through to the Pets.com site to access the special deals. The handsome man has nothing to do with Pets.com but aims at the gay audience, Mr. Harriss said.

Other PlanetOut advertisers include video and DVD site Reel.com, which shows two women together in its banner, and Barnes & Noble's BN.com, which runs banners that send visitors to the gay and lesbian area on its site.

Gay.com has seen a substantial jump in traditional advertisers in the past 60 days, said Lowell Selvin, CEO of Online Partners.com, Gay.com Network's parent.

"In July, we had only three mass marketers. Now we have about 15," Mr. Selvin said. "The future of advertising to the gay and lesbian community is enormous."

Gay sites allow marketers to reach a large audience of gay men and women, including many who wouldn't be comfortable having gay magazines such as The Advocate or Out delivered to their mailboxes.

"Never before in the history of the world have you been able to reach more than 130,000 gay and lesbian unique people in any one media outlet," Mr. Selvin said. "Now, through the site, you can begin to reach the gay and lesbian masses."

Because Gay.com serves its own ads using DoubleClick's DART technology and places cookies on some visitors, it can target its audience by state, region or country. Since it gives users the option of filling out profiles, it can also target by leisure activities or profession.

"The demographic information we are building is highly detailed," Mr. Selvin said.

"The possibilities are practically endless," Mr. Harriss said of advertisers' ability to target niche markets -- including blacks, Hispanics and Asians -- via the Web. "I am very surprised [mass marketers have] been slow to adopt [this method of advertising]. But we are definitely at a turning point."

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