Volkswagen of America, Ford Motor Co.'s Volvo Cars of North America and its Jaguar Cars North America all started targeting the segment in the past year via advertising or event sponsorship.
"Like any other niche community, you must advertise to reach this community," says Arthur Korant, creative director at Double Platinum, a specialty New York shop in which Bcom3 Group holds a 20% stake through its Pangea Partners agency network. "When you do [advertise] you create a lot more loyalty and word-of-mouth."
Indeed, a 1998 Greenfield Online survey revealed 78% of gay online users prefer to buy from companies that advertise to the gay market.
Saab Cars USA, fully owned by General Motors Corp. since 2000, was the pioneer in 1994. Saab still advertises in The Advocate about six times a year with ads from its general-market agency, Interpublic Group of Cos.' Lowe, New York. GM's Saturn Corp. followed in 1995. None of the marketers contacted would reveal ad spending to the target.
Subaru of America also started advertising to the gay community in 1995. But it's the only carmaker to use a dedicated agency-Moon City Productions, New York, founded in 1999 by John Nash, a partner in Subaru's original gay and lesbian shop, Mulryan/Nash.
"Research shows gays and lesbians prefer advertisers that make the extra effort to tailor creative to them," Mr. Nash says. He pointed to 2000 MRI data of The Advocate and Out in which readers said they'd be 1.5 times more likely to buy a Subaru than another car brand. The brand then doubled its frequency in those titles and readers are now 2.6 times more likely to buy a Subaru than non-readers, a 73% jump.
Subaru supports its ads with sponsorships, including the non-profit Human Rights Campaign. The company is also a founding sponsor of the Rainbow Endowment, which donates money to the gay community's non-profits from funds generated when people use their Visa Rainbow Card, a credit card targeted at the gay and lesbian community.
Tim Bennett, Subaru's marketing programs director, says it's important to be involved in the community's causes because "it makes us more genuine."
Jaguar has increased its attention to the market by sponsoring the 2001 Reaching Out conference for gay and lesbian MBA students, and it underwrote the Gay & Lesbian Alliance Against Defamation's New York and Los Angeles GLAAD Media Awards.
GM, Ford and DaimlerChrysler's Chrysler Group all initiated "domestic partner benefits" in 2000, but Detroit's Big 3 haven't made significant investments in the target's non-profits, says Wesley Combs, president of Witeck-Combs Communications, Washington. The marketing and public relations company specializes in the gay and lesbian segment. Among its clients are major non-profits including GLAAD, the Human Rights Campaign and the Federation of Gay Games.
Mr. Bennett says Subaru's ongoing effort has resulted in rising sales to the segments. Subaru initially targeted lesbian women after realizing they were among several niche groups with a high propensity to buy its vehicles.
Even Subaru's mainstream commercials have gay overtones. Gay advocate and tennis legend Martina Navratilova stars in TV commercials for the Subaru Forester created by Interpublic's Temerlin McClain, Irving, Texas.
"If we were going to target-market, we decided to go after a niche that had already found us," says Mr. Bennett.
But as the carmaker's print ads expanded to gay men and the vehicles' styling improved, gay men began exceeding lesbian women as Subaru buyers, Mr. Nash says.
A current Subaru ad carries the headline, "Get out and stay out," which Mr. Nash says also would work if placed in outdoor lifestyle books. New creative, due in the second quarter, will reflect well-known lines from classic films. The executions will tie in nicely with 2002 plans for more Subaru-sponsored movie festivals. Research revealed the targets preferred more local-sponsored events.
When it comes to pure advertising, most of the available media is print, including national magazines such as The Advocate, Curve, Genre, Liberation, Out and Passport. But Subaru also advertises in local, targeted newspapers.
There's less direct TV programming, though 21 network and cable TV shows feature gay or lesbian characters in starring, supporting or recurring roles, says Stephanie Blackwood, account director of Double Platinum and former associate publisher of The Advocate.
VW started advertising in The Advocate and Out last year and continues to run spreads and page ads this year from its general-market shop, Havas Advertising's Arnold Worldwide, Boston.
As VW studied its print plan of lifestyle books, the carmaker realized it was missing gay and lesbian titles, says Karen Marderosian, marketing and advertising manager. "VW has always been an approachable kind of company," she says, "and the [gay and lesbian] target is very consistent with the VW buyer."
VW WINS PRAISE
VW won the community's admiration after debuting its "Da Da Da" spot with two hip young men during the coming-out episode of ABC's "Ellen" in spring 1997. GM and then-Chrysler Corp. both withdrew ads from the episode. Chrysler even set up a 1-800 hot line to take complaint calls when it had initially planned to advertise during the episode.
Competitors estimated VW is now spending more than any other carmaker in the category since it's using spreads and is in virtually every issue of the two magazines.
Ms. Marderosian would only say "we do have a consistent schedule" in the two titles, but it's too soon to tell if the strategy is working.
Jim Sanfilippo, exec VP of Automotive Marketing Consultants, says "there's probably a damn solid business case" for advertising to gays and lesbians. "It doesn't surprise me though-this is an affluent, intelligent, highly educated group of people."
Mr. Sanfilippo says he isn't sure whether other carmakers are too conservative to advertise to gays and lesbians or whether the auto companies feel they can reach everyone efficiently via mass media, which "minimizes their need to fragment their efforts."