a market kept in the closet - gay and lesbian consumers - Industry Overview

American Demographics, Nov 1, 2001

Michael O'Brien had no idea he would hit a dead end so quickly. MGH Public Relations, the outfit where O'Brien is executive vice president, was hired eight months ago by Baltimore-based Chase Brexton Health Services to answer a straightforward question: Would it be good business for the HIV/AIDS clinic to expand into becoming a primary health-care provider for the local gay and lesbian community? MGH's first task was to assess demand, and O'Brien expected that to require a quick survey of existing data on the city's homosexual population. "What we got back was a list of gay bars in Baltimore," says O'Brien. "There were no good numbers on this group's needs, or even something as basic as the number of people here who self-identify as gay or lesbian."

All MGH had to go on, he says, were a few national surveys, and even those turned out to be unreliable because their samples were either too small or drawn from segments that were unlikely to be representative of the larger homosexual population. Chase Brexton, a nonprofit organization, couldn't afford to fund a major research project of its own, but it did commission four focus groups. These sessions provided anecdotal evidence that reassured MGH and Chase Brexton about the new strategy, and they are developing a marketing and advertising campaign around the repositioning.

O'Brien thinks some of his other clients may be overlooking this market as well, among them a national weight-loss chain. "Wouldn't it be nice to know whether or not weight loss is an issue that gays and lesbians are struggling with?" he asks. "It could be that this group is a very loyal customer base for some of our clients, but we just don't know, and a client isn't going to go on our hunches. Until better, more comparative data exists, and we can actually prove something, they're not about to throw money at it."

The prospects are tantalizing. Ask Kent Steinnagel, vice president and group supervisor at Robert A. Becker, a Euro RSCG ad shop in New York City. Steinnagel is working on a strategy for Bayer's Vardenafil, a Viagra competitor scheduled for release next year. Company executives recently hired the Gallup Organization to help profile the heaviest users of Viagra, and while they sliced the information by age, income, region, even insurance status, they didn't think of looking into differences between gays and straights. Then Steinnagel stumbled across an article in a local paper about a small sample study of recreational Viagra usage among gays, which said that while about 2 percent of all men use the drug, 32 percent of gay men do so. Steinnagel was floored. For three years, both agency and client had been studying Viagra consumers and had completely overlooked what could be one of its best targets. "As an advertiser, I want to reach the high-volume users, regardless of whether they are gay, straight, Asian, black or green." he says. "I didn't even realize the blind spot I had. It made me realize that we are missing a big piece of the puzzle here."

That piece of the puzzle is drawing increasing attention. Companies ranging from tiny Chase Brexton to big players like American Express, American Airlines and Procter & Gamble are starting to recognize the gay, lesbian, bisexual and transgender (GLBT) population - estimated at anywhere from 11 million to 23 million - as a consumer market. Last year 61 national advertisers placed ads in gay publications, up from 19 in 1994, according to Prime Access, a New York City-based marketing firm specializing in this segment. But while advertisers usually demand precise data on the spending patterns, attitudes and media habits of their demographic targets, most marketing decisions about reaching GLBT consumers are based on little more than hunches.

That's because major media, product and attitude tracking researchers such as Nielsen Media Research, Arbitron and Simmons Market Research Bureau, which help advertisers determine who buys their products and which media those customers rely on, don't regularly break out GLBT consumers in general market surveys. No one knows, for instance, what percentage of gay men regularly watch NBC's Will & Grace, which features a gay lead character. Nor do they know how that percentage might compare with other audience segments or with the audiences of other TV shows, since Nielsen does not track the viewing habits of GLBT consumers. What syndicated studies there are of the segment draw respondents from "convenience samples" - such as magazine subscribers - which tend to skew upscale and can't be generalized to the total GLBT population.

Because of this dearth of data, advertisers eyeing the GLBT market have had to take matters into their own hands. Those who can afford to do so, commission proprietary studies and keep the results to themselves, while others are left either to make seat-of-the-pants assumptions about the segment's spending and media habits or to advertise via gay publications and grassroots marketing efforts, which reach only smaller pockets of this group. But the lack of information on the GLBT market does more than hamper marketers like Chase Brexton, who have some experience with the segment. It creates a blind spot for many more advertisers, like Bayer, who may have products or services that would be perfect for this group, and have no way of knowing it.