Why advertisers should target the LGBT community

May 22, 2012

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Hi all,

Last time I wrote about the problematic situation that Facebook is collecting and transmitting information about gay people in secret. Even though advertisers do not tell for what aim they collect all these information, the likely reason is that they want to address specific ads to a certain target group. Target grouped marketing focuses on the special needs of a very narrowly defined group of potential buyers by using selected media (channels). The main benefit of establishing a market for a certain target group is, to get access to customers who are hard to reach with mainstream marketing instrument but who are still economically valuable.

One of the most popular target groups to be addressed separately seems to be the LGBT community. Many industries believe that this community offers a high market potential. I totally agree with this consideration. Therefore, I want to discuss the reasons why the LGBT community should be (and actually is) considered as a separate target group and why gay marketing can deliver a high outcome for advertisers.

We find many examples for marketing campaigns which tried to attract a LGBT audience. For example, in 2009 the German tourism company TUI released the first brochure for gay people in Germany (”Gay & Travel – weltweit unterwegs” engl.: worldwide on tour). This is just one example for a gay marketing campaign. However, it is remarkable that marketing to the LGBT community mainly exists for certain industries, amongst others the leisure travel market. This fact is due to some characteristics of the LGBT community:

  1. The most important reason is clearly the economical perspective. In the past ten years a lot of surveys aimed to examine the socio-demographic facts of the LGBT community. These market surveys mainly indicated that gays have a higher income than the average of the society and what is even more important they spend comparatively more money on certain products and services such as fashion, cosmetics or leisure travel. In 2011 a travel study for the American market demonstrated that on average 29% of LGBT travelers spent more than 2,000 USD on their vacation per year and another 33% spent more than 1,000 USD. Another study conducted by the City of Philadelphia indicated that the LGBT community spent on average 57% more than other travelers in 2011.  
  2. Another point to underline the LGBT community's market potential is that gay people are considered as trendsetters and early adopters. The LGBT community seems to be more adventurous and more enthusiastic towards new trends. Besides the mentioned economic aspects early adopters have, according to marketing strategists, some important characteristics: they have a high level of education, a big need of social mobility, more empathy, are less dogmatic and more positive/optimistic towards changes and risks. Additionally, it is said that early adopters are socially better integrated and they are for some topics opinion leaders. By winning gays as customers, companies could get easier access to other groups of the society – a so-called two step flow of innovations could be achieved. Of course this aspect is more favorable for fashion or cosmetic industry but it is also possible for travel market. Some destinations which are popular for gays and lesbians seem to be very trendy. Some travel destinations already discovered this potential: At last year's ITB one of the most important travel fairs worldwide, Tel Aviv presented itself as very gay friendly with a broad advertisement campaign. 93 Million Euro were spent on gay marketing in 2010 and on the ITB in Berlin Tel Aviv showed its efforts to expand this budget to be perceived as world's gay capital. With these efforts Tel Aviv wants to attract besides the LGBT community a modern and metropolitan target group, especially because some parts of Israel such as Jerusalem are perceived as very religious and conservative.
  3. A further aspect is that gay people are said to be loyal clients: In times when impulse buying and the fierce price war are increasing whereas brand loyalty is decreasing it is getting more important for companies to attract consumers who feel affiliated to a brand. The LGBT community is extraordinarily loyal towards brands/destinations/companies which are “gay friendly”. For example, according to the results of the most recent “Global report of LGBT tourism” LGBT travelers tend to visit a destination more frequent when it fulfilled their needs and offered them a friendly atmosphere for same sex couples. In 2011, an American online survey of Harris interactive found out that for the LGBT community brand loyalty seems to be more important than the level of prices in certain situations. According to this survey 71 % of LGBT people are more likely to stay loyal to a brand when they believe that it is friendly and supportive to the community even when a less friendly company offers the same quality for a lower price. There are many brands which are especially perceived as gay friendly (e.g. Absolut Vodka, Apple or Starbucks) by the community. As a consequence gays and lesbians are willing to pay higher prices in contrast to the more price-driven mainstream market.

All these facts combined define the LGBT community as a loyal and innovative marketing segment. Even though the size and the scope of this target group cannot be measured exactly we can get an idea of the economic potential of this target group. In my next post I want to discuss if the LGBT community which is actually a very diverse group can be regarded as one targetable marketing group. But first of all I am looking forward to your points. Do you agree on the advantages of a LGBT target group or do you see further aspects I did not consider?