Statistics popularized by gay-market agency Overlooked Opinions, Chicago, contend that up to 10% of the population of major urban areas is gay and that the segment has an annual spending level of $514 billion. Some observers insist those statistics are too high.
SIMMONS STUDY CRITICIZED
The largest such survey-"Gay & Lesbian Market Study," from Simmons Market Research Bureau and gay ad agency Mulryan/Nash, New York-also met with criticism when it was released in January 1997. It was mainly judged as having biased sourcing for respondents from narrow, upscale lists.
Due to the challenge of getting a truly random sample, Simmons got its 3,896 respondents from the mailing lists of gay political organizations, upscale catalog marketers and other sources.
"The statistics are totally untransferrable," said Howard Buford, president of Prime Access, a New York marketing agency that specializes in reaching minority groups. "They positioned this as 'This is the gay market, " rather than as a segment.
Mr. Buford, whose clients include AT&T Corp. and American Express Co., maintained the methodology skewed incomes and results too high.
Still, the Simmons effort remains the benchmark public study. It agreed with previously commissioned surveys of gay newspaper readership, finding higher than average incomes-$100,000 and above in 21% of those households surveyed-and education.
The study also tracked media tastes and brand buying habits for automobiles, credit cards, alcoholic beverages and other categories.
Rebecca McPheters, Simmons president-CEO, stands by the numbers but explained: "People [in the survey] tended to be in urban areas, both adults [in a household] tended to be working and we didn't have a large representation of people who were over 50 and retired-these factors generate higher incomes.
"This is not meant to be political or social research," she added. "There is no question this is a difficult market to sample, but the other choice was not to do the study."
TRACKING STUDY PLANNED
Spare Parts, a Westport, Conn.-based gay marketing agency, is working on a strategic alliance with Information Resources Inc. to do a first-time tracking of package-goods buying habits of gays.
Stephanie Blackwood, a principal at Spare Parts, said getting a truly random sample "is one of those issues that will plague researchers for a long time. In all cases, the veracity of the research is based on methodology."
Ms. Blackwood's agency may soon begin using scanner data from IRI's 60,000-member Shopper Panel. And it hopes to cross-reference names from the panel with established gay-consumer lists and glean data from groceries in heavily gay neighborhoods.
"Package-goods marketers, by and large, have never been segment marketers," said Ms. Blackwood. "If we can show potential dollars earned, based on quantitative numbers and buying habits, that's one of the things we've been missing-the facts."