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Target focus: AmEx and Bud Light first ran mainstream ads in gay markets before creating gay-specific advertising. ADS TARGETING GAYS RELY ON REAL RESULTS, NOT INTUITION: MARKETERS PAY TO RESEARCH RETURN ON INVESTMENT

By Published on .

IBM Corp., having run diversity recruitment ads in gay media for some time before adding support for its Lotus brand, is increasing its presence with the introduction this month of a special WorkPad palm computer loaded with gay travel information software.

Supporting product ads will bring Big Blue into local gay newspapers nationwide, and to gay Internet sites for the first time.

"We are moving forward very aggressively," said Leslie Smith, IBM segment executive-market development.

But not blindly. Previously basing their efforts targeting gays and lesbians largely on intuition, big advertisers increasingly are spending significant sums to conduct proprietary research on the market -- and to find out how their products are faring.

American Express Co. shelled out $250,000 for research last year before committing additional ad funds to the market, and Subaru of America spent an undisclosed sum before beginning its targeted advertising at all.

These three advertisers all now have a major presence in the market.

SPENDING ON THE RISE

"Nothing gets marketing people over their fears more than results," said Howard Buford, president of agency PrimeAccess, New York, which specializes in reaching gays and other minority groups. "There is more credibility and a track record in the market, and backlash is not the issue everyone expected. You're dealing with a different attitude going in now."

An early estimate from the annual gay media report done by ad agency Mulryan/Nash indicates ad revenues in the market will be up for the third consecutive year, with 1998 revenues projected to rise 16.9% to $117.1 million. That's a drop from the 36% growth experienced in last year's survey but healthy nonetheless.

The estimate was tallied from 13 of the 137 publications in the full annual survey, which is based on revenues for April and projected for the full year; the complete study will be released by August.

BUILDING BRANDS

Other major marketers are slowly finding comfort in the gay market by introducing or building their brands one at a time.

Bristol-Myers Squibb Co. began targeting gays with a small Clairol Men's Choice hair coloring ad in Out in late 1996. A year later, its prescription AIDS drug Zerit began a significant presence in the market, expanded in the June 1998 Out to include prescription anti-depressant Buspar.

The marketer's pace will increase next month with ads in The Advocate for the first shampoo brand to advertise in the gay market, Clairol's Aussie haircare.

R.J. Reynolds Tobacco Co. began testing its alternative Kamel brand in gay magazines in March 1996, and increased that presence to upfront spreads. Now ads for its Salem menthol brand are testing in New York City's MetroSource, and this month the marketer brings its regular Camel cigarette into gay media.

Alamo Rent A Car, Hartford Financial Services Group, Seagram Co.'s Tropicana orange juice, Sprint PCS and others have brought new ad categories to the market.

"I'm not really that shocked by anyone coming into the market anymore," said Joe Landry, publisher of The Advocate.

CAR INSURANCE AD

Hartford ran an unusual gay-focused ad for its auto insurance in gay magazines and via San Francisco outdoor boards and newspapers for the general market. Anheuser-Busch's Bud Light, Grand Metropolitan's Baileys Original Irish Cream, Miller Brewing Co. and others have created gay-specific ads after first running mainstream campaigns in the gay market.

Todd Evans, president of Rivendell Marketing, Westfield, N.J., which represents 185 gay newspapers for national sales, expects 1999 to be another "boom year.

"We have four times as many proposals inquiring about the gay market," he said.

While he doesn't compile a report similar to Mulryan/Nash's, Mr. Evans said he thought that shop's 1998 revenue estimate for gay media may be low.

The most recent category to break into the market is hotels, with an ad from Inter-Continental Hotels & Resorts Corp. in the July 7 Advocate, via Campbell Group, Baltimore.

FINANCIAL SERVICES GEAR UP

The financial services category also is becoming more important, with Aetna, Chase Manhattan Corp., Citibank, Merrill Lynch & Co. and others preparing to launch more visible gay marketing efforts.

Citibank began realizing the potential of the gay and lesbian market after it incorporated them into its corporate non-discrimination policy a few years ago. It intends to brand itself nationally in the gay community next year. Also, the bank is exploring a co-branded credit card with American Airlines for the market.

New national gay magazines are trying to get the attention of advertisers. Print titles such as Arrow, Instinct, QV Magazine and Venus have cropped up, the latter two aimed at Hispanics and African-Americans, respectively.

Arrow, being launched this month, hopes to distinguish itself from gay glossies by focusing on "family, relationships and monogamy."

Established publications are primping to stay attractive. With its July issue, Out introduces a major redesign.

Out's circulation for 1997 was up 12% to 136,381, according to the Audit Bureau of Circulations. Ad pages through May 1998 are up 20.8% to 316.1, according to the Publishers Information Bureau.

The Advocate continues to adjust its look, albeit more subtly since its redesign more than a year ago. Its circulation rose 4.3% to 81,862 for 1997, according to the audit bureau; through May, ad pages were up 0.4% to 457.5, according to PIB.

WHY NOT MORE READERS?

Despite modest circulation gains, some wonder why gay titles aren't getting more readers.

"There's a growing reluctance by the community to define itself as all-gay, all the time," said Dave Mulryan, president of Mulryan/Nash. "What is it like to be a gay man in Omaha in 1998? The media are not delivering how many people see themselves."

National advertisers also are turning to gay newspapers. Combined, the 185 publications served by Rivendell have 3.5 million in circulation. United Airlines, RJR's Camel, and Domecq Importers' Sauza tequila and Beefeater gin recently have gone into gay papers.

"We're looking at a lot more companies coming into the gay marketplace," said Mr. Buford. "It's not so pioneering anymore; now they're just covering their bases."

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