Merchandising arrives at new comfort level

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At the "equality Rocks" concert that kicked off this spring's Millennium March in Washington, 45,000 gay men and lesbians danced to the music of George Michael, k.d. lang, Garth Brooks and others. They also watched on video screens a 60-second commercial for PlanetOut.

As concertgoers filed out of the stadium, they received an array of promotional material, including Barnes & Noble coupons, good for $5 off purchases made at PlanetOut's online bookstore.

That PlanetOut had the resources to sign on as a lead sponsor of an event of this scale is a first for a gay and lesbian Web media operation.

PlanetOut estimates it will spend $6 million to $10 million on advertising and marketing this year, up from $4 million last year.


Other than using the Web site itself as a marketing tool, CEO Megan Smith says, one goal is to present PlanetOut as a comprehensive way for advertisers to reach the gay and lesbian consumer.

"Look at most companies' marketing strategies and you'll find an online and offline effort, and we can match that," she says.

One co-branding partner is NextCard, which sells credit cards to targeted groups over the Web.

The online/offline opportunity was a major factor in NextCard's decision to work with PlanetOut to offer a NextCard/PlanetOut Visa card to applicants and domestic partners. "We're an Internet company ourselves," says Rich Goebel, VP-business development at NextCard. "It's nice to have a partner with a foot in the real world."

PlanetOut, which PC Data Online says had 717,000 unique visitors in April, is more than just a Web site. It spreads its brand name through cyberspace by distributing its content to America Online and several Internet hubs such as Most impressively, the company acquired national magazines Out and Advocate, along with a boutique book publisher and a marketing outfit this spring. It owns travel guides "Over the Rainbow" and "Out and About." It also sponsors a half-hour gay TV news show in Canada, and several radio programs in the U.S., all of which can be downloaded from the Web site.


"We provide the places where the community meets," Ms. Smith says. "Our goal is to reach the gay and lesbian audience by going wherever they are."

PlanetOut's major competition right now is, a company created by the merger of three smaller Web sites. PC Data counted 795,000 unique visitors to in April.

"PlanetOut and have brought a new consideration to gay marketing: a mass audience. That's never been available before," says Stephanie Blackwood, partner at New York market researcher Spare Parts. has leveraged its numbers into a shopping area that features several big-name tenants and advertisers, including The Gap and Virgin Megastore.

" has good traffic. . .but I give PlanetOut credit for all its other endeavors," says David Card, an analyst at Jupiter Communications.


PlanetOut is trying to go further in terms of using both online and traditional media channels to generate advertising and commerce revenue, says Ms. Smith.

A company could start out by placing a banner ad with PlanetOut, for example, says Ms. Smith. Then it might bundle magazine placements in both Out and Advocate. Similarly, she says a company might try sponsoring one of PlanetOut's e-mail newsletters or a Web simulcast of an event, like a speech by President Clinton to the gay community.

PlanetOut also makes a point of working with commerce partners to tailor their products to its community. For example, an online wedding services company, The Knot, provides resources for planning commitment ceremonies.

In addition to working the multimedia angle, PlanetOut uses a third of its marketing budget to sponsor community events.

"My perception is that PlanetOut has a bigger presence at events than," says Ms. Blackwood. "Having a high visibility at events is good for its advertisers."

Take the Barnes & Noble coupons at "Equality Rocks." PlanetOut's staff distributed them to drive traffic to the site, but the bookstore received plenty of publicity since both companies' names were featured.

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