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After becoming the largest U.S. employer to extend healthcare benefits to long-term partners of gay and lesbian employees last fall, IBM Corp. did something else to stay competitive that it had never done before-advertise in gay media.

Visibility of gays and lesbians has reached a critical mass in corporate America and mainstream media over the last several years, slowly easing reluctance by marketers such as Big Blue to court a demographic previously perceived as risky.

While spirits such as Seagram Americas' Absolut vodka have had a longtime presence in the gay market, a diverse and impressive list of major advertisers has jumped on board. They include America Online, Aetna Life & Casualty, Chase Manhattan Corp., Johnson & Johnson, Lotus Development Corp., Merrill Lynch & Co., Samsung Electronics America, Subaru of America, United Airlines and U S West.

Industry insiders say other big names are likely to soon weigh in with ads in product categories as yet untapped, including soft drinks, beauty care, juice and pet foods.

While gay media remain largely confined to several national mag-azines and local newspapers, pre-liminary figures show a 28.9% increase in ad revenue, to $95 million this year, according to a soon-to-be-released report from gay marketing agency Mulryan/Nash, New York. That compares to 19.6% growth last year.

The trend is a major leap of faith for companies that have little research to support their decision, leaving much to intuition (see story at bottom right). Yet successfully targeting gay consumers will involve more than just isolated sponsorships of gay events or the occasional ad.


"The frontier has moved," said Stephanie Blackwood, principal at Westport, Conn.-based gay marketing agency Spare Parts. "The standard has been raised as to what constitutes gay marketing. It's no longer enough to work spon-sorships and never place an ad in gay media or just run a mainstream ad in gay media."

American Airlines has courted the gay market for years through sponsorship of events, though it has yet to support gay media with ads. That left an opening for United Airlines, which in June began running mainstream ads from Fallon McElligott, Minneapolis, in The Advocate, making it the first major U.S. airline to do so.

Smaller carriers Kiwi Internat-ional Airlines and Virgin Atlantic Airways have run such efforts.

Lacking other major travel-related advertisers, United's entry is encouraging to gay media that, with the exception of a one-time ad placed by the San Diego Hyatt in 1995, have yet to draw car rental companies and hotels.


Another elusive category is automotive. Despite the presence of Subaru and Saab Cars USA, no domestic automaker has actually entered the market and stuck with it. A one-time ad by Hal Riney & Partners, San Francisco, for General Motors Corp.'s Saturn in April 1994 never reappeared. (Nevertheless, a market study by Simmons Market Research Bureau ranked Saturn as the No. 1 U.S. vehicle choice of gays and lesbians.)

Even with the noticeable absence of many major product categories, the fear of targeting the gay market is subsiding.

"The sensationalism has kind of worn off-it's not as rare and newsworthy for a company to enter the gay market," said Howard Buford, president of Prime Access, New York, which specializes in reaching minority markets.

When Prime Access client AT&T Corp. created a gay direct-mail piece in 1994, news agencies from as far away as Australia and Europe called the marketer and its agency. After protests from conservative organizations, AT&T withdrew from the market. A company spokesman said AT&T is considering re-entering the market.


Mr. Buford said big business must take special considerations when entering the market. "People who've been historically excluded are very skeptical," he said. "If you suddenly offer somebody acknowledgment, it's a very suspicious relationship."

Said a spokeswoman for Miller Brewing Co.: "People really want to see that we understand them."

Last year, after long having targeted gays, alcoholic beverage marketers began running daring creative to help stand out from the crowd. Soon a commercial featuring a lesbian kiss will hit the airwaves across Canada in a new Molson Dry spot from BBDO Canada, Toronto.

Miller, which has been marketing to gays since 1987, last month broke a new gay-only campaign from Fallon McElligott, Minn-eapolis, featuring tongue-in-cheek male paper dolls.

Increasingly marketers are using gay-specific ads, though others sometimes opt for a more am-biguous approach.


For the first time in Absolut's 15 years of targeting gays, Seagram ran an "Absolut pride" ad with the com-munity's rainbow flag in its trade-mark bottle shape. The ad, created by gay magazine Toronto Life, was one of a few that also ran outside gay media, in Entertainment Weekly.

"We can't be half-committed-we have to say the G-word" in advertising, said Julian Acosta, marketing manager-emerging markets, American Express Financial Services. Mr. Acosta criticized ads that appear to say one thing to a gay audience but can be interpreted quite differently by a straight audience.

"We heard in focus groups it makes people angry to see [ambiguous] ads," he said, "Some people think you can hit two markets with the same message. But people are more sophisticated; you can't do that anymore."

American Express Co. entered the gay market in `92 with a subtle ad from Ogilvy &*Mather, New York, for its Travelers Cheques for Two, a product that allows signatures from two unrelated people, then followed with mainstream ads in gay titles for its cards.

Cross-media advertising-bring-ing a company's gay marketing effort into mainstream media, as Absolut has done-is considered the boldest marketing choice. Yet Ms. Blackwood said that will be the next phase in such marketing.

"I think that's the next place marketers will go-being with the gay community in a non-gay environment," she said.

While Absolut is the most recent company to do this, a Diesel Jeans ad featuring Bob and Rod Jackson-Paris, a gay celebrity couple, ran in early 1995 in gay magazines and selected fashion books. The ad, created in-house, portrayed two sailors kissing.


IBM took a brick-by-brick approach in developing its gay marketing, putting internal policies in order before placing its first ad in The Advocate. That was followed this year by placement in gay media of the mainstream "Solutions for a small planet" campaign from O&M.

In September, IBM will be the first major computer marketer to run gay-specific ads in gay media.

Once a major player in a category makes the leap into gay media, competitors often follow. Designers such as Gucci, Yves St. Laurent and Versace, along with casual brands The Gap, Swatch Watch USA, Levi Strauss & Co. and Wolverine World Wide's Hush Puppies, have become regulars in Out.

Fashion is now the biggest category at the 5-year-old glossy magazine, which reached an audited circulation of 132,700 in June.

"Advertising is very important as content in our magazine, particularly for our readers who are looking for affirmation from advertisers," said Henry Scott, Out president.

Lesbians remain on the fringe of the gay marketing movement, leaving lesbian magazines such as Curve in the shadow. But Mr. Buford sees that as changing.

"Most out celebrities now are women and quite frankly lesbians are less threatening than gay men to straight executives," he said. "A lot of it has to do with social acceptance, and advertising is never at the leading edge on that.'

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