MARKET RESEARCH: Reaching the pink pound - Only companies that nurture a genuine relationship with the gay community will see the benefits, writes Andy Fry

Describe your dream consumer. If it is something like ’trend-setting, affluent with no dependents and likely to spend significant proportions of disposable income on travel, fashion and entertainment’, then the chances are you have a strong potential market within the gay community.

Describe your dream consumer. If it is something like

’trend-setting, affluent with no dependents and likely to spend

significant proportions of disposable income on travel, fashion and

entertainment’, then the chances are you have a strong potential market

within the gay community.

What’s more, those characteristics, identified in the recent report ’In

The Pink?’ from marketing consultants Grey Matter, are backed up by the

cash to make them count. Various estimates put the value of the gay

market between pounds 6bn and pounds 8bn.

In a 1995 readership survey conducted by Gay Times, it was found that

average income among gays was pounds 17,000 a year, while the average

gay household brought in pounds 36,000. This is considerably more than

the typical straight family unit. The Gay Times’ survey also found that

77% of its readers are ABC1s, against a 43% proportion of the general


Having said that, there are potential pitfalls in marketing to the gay

community. ’In The Pink?’ warns: ’Gay consumers have diverse


Being gay may influence their purchasing decisions, but it does not mean

that every gay consumer is the same.’

The report goes further by saying: ’Even though gays cannot be regarded

as a community of consumers, they can represent their community interest

through their spending power.’ In other words, they may not all buy the

same products but they can and will boycott a company they regard as

exploitative, hypocritical or insensitive.

Any discussion about marketing to the gay community needs to make a

basic distinction between mainstream brands that have a gay customer

base and businesses that are specifically targeted at the gay


Many of the latter tend to deal in areas where the gay community has

been let down or neglected. Financial advisers such as Ivan Massow &

Associates have filled an important niche in areas such as mortgages and

insurance, where mainstream companies tend to advise incorrectly or

overcharge gay customers.

In the Grey Matter report, Ivan Massow says: ’Nearly everyone who comes

to me has lost their mortgage because of (bad advice) and come out of

the affair losing hundreds of pounds on survey fees, as well as feeling

thoroughly embarrassed and intimidated.’

Other areas successfully serving gay consumers include legal advice,

taxi companies, accommodation agencies, housing developments, travel

agencies and funeral and homecare services. All are marked out by a

clear understanding of what the gay consumer wants.

Last year, Eric Crespin set up a gay-exclusive holiday company called

Alternative Holidays after researching the more developed market in the


He began by launching European Gay Ski Week, which catered to 400


The success of that venture has encouraged him to run four separate

gay-exclusive holidays this year, linking up with Club Med and


’For Gay Ski Week I created a package by chartering a week at a Club Med

resort,’ he says. ’I hired gay entertainment and put a mark-up on the

regular price. If you are providing products for the gay community, you

have to go all the way. You can’t patronise them, they’ll see through


Crespin’s success is borne out by the repeat business he has


’If you do something properly, word of mouth works very well. Gays and

lesbians talk a lot about issues that concern them and are an easy

market to reach through magazines like Gay Times, Attitude and Diva.

Hooper’s Hooch did a lot of PR in the gay community and brands like

Diesel and Calvin Klein have done well by identifying with it.’

Integrity and commitment

For the mainstream advertiser, targeting the gay community is more


According to Paul Phillips, who handles display advertising on Gay

Times: ’A lot of companies are aware of the nature of the gay market but

think their mainstream advertising will reach them. That may be the

case, but our readers are brand loyal and will take up services and

products if they are impressed by a company’s approach.’

Of those brands that have targeted the gay community, Gay Times

marketing director Kim Watson has identified three categories: brands

that involve, brands that bond and brands that patronise.

The former describes those that have targeted the gay press without

attempting to differentiate between the gay and straight consumer.

Benson & Hedges, Benetton, Smirnoff and Frizzell all fit this


Brands that bond are those that have attempted to ’communicate a clear

understanding of the gay consumer’s outlook and life experiences’, says

Watson. These include Hamlet Cigars, Wild Turkey, Bass Taverns, Virgin

Megastores, and Absolut.

Brands that patronise are those that sensationalise their proposition

with gay imagery. According to Watson: ’This moral-panic approach serves

only to alienate the gay consumer by its tokenism.’

Although bonding would seem to be the preferable route, it has proved a

double-edge sword for some clients. United Airlines was the title

sponsor of Gay Pride 97, but found its efforts undermined by the

revelation that it refused to pay benefits to the partners of its gay

and lesbian staff.

It found itself subject to calls for a boycott.

’In The Pink?’ underlines the importance of integrity by citing a number

of ways for companies to win trust. Equal opportunities in company

policies, membership of The Gay Business Association and a presence at

gay business fairs and exhibitions are a start.

Demonstrating commitment through the intensity and duration of any

relationship with the gay community is also a key factor. Companies that

have fallen foul of these rules include Bhs, which incurred the wrath of

the community when it sacked an employee who came out as gay on TV.

There are some companies that have worked hard at their


Drinks brands like Absolut and Smirnoff have driven sales of vodka as a

result of gay-oriented campaigns. Bass Taverns and Virgin have also

invested in the sector.

Bass recently spent pounds 2m on creating a new gay bar called Rupert

Street and refurbishing an existing site called Brief Encounter. There

are now plans to redevelop a further four sites out of a national

portfolio of gay bars that runs to about 28.

According to Ivan Bell, managing director of MCA-owned Fly Design, which

has redesigned and repositioned the sites, the move reflects changing

attitudes. ’Companies like Bass don’t need to have their bars tucked

away anymore. Rupert Street is an open-fronted cafe which is modern,

bright and lively.’

Bell agrees that companies need to have their own house in order before

they can seriously expect to appeal to the gay community. ’Bass doesn’t

have anything hidden away and is good at listening. Some people in the

gay community used to accuse Bass of just taking, but this shows it is

prepared to give something back.’

Virgin also has a good track record in delivering services to gay


Its Megastores have a wide range of gay merchandise and organise gay

shopping nights. It has also sponsored pressure group Stonewall two

years on the trot as well as backing various Pride functions that have

taken place around the UK and Ireland.

Virgin’s local marketing and PR manager, Simon Dornan, says: ’It’s hard

to quantify the difference it makes to the business. We sell a small

range of products specifically aimed at the gay market. The sales impact

of that is minimal. The point is that it is in our culture to welcome

anyone to our stores, regardless of who they are, in the knowledge they

won’t get hassled.

’The reason we get interest from gay customers is that people know we

endorse the values we claim to represent. We have equal employment

practices as well as policies on HIV, AIDS, harassment and adoption. We

support our gay employees.’

That said, even The Virgin Group has blundered occasionally. The pricing

of its PEPs and the indiscreet handling of some of its direct mail

business have both caused concern within the gay community.

Undoubtedly, there is growing interest in the pink pound as society

becomes more tolerant of homosexuality. Yet there are still plenty of

factors that discourage advertisers. When the South Yorkshire Police

advertised in Gay Times, it caused a bitter public controversy which

underlined the fact that bigotry is still a block to some


Gay Times’ Phillips says: ’We hit a brick wall with some advertisers

that consider us to be the wrong environment. In the US, there is a big

market, with gay figures like Ru Paul and kd lang endorsing


I don’t expect that here because there is not as great a confidence

among advertisers.’

Advertisers are also likely to be influenced by the apparent confusion

within the gay market about how far the community wishes to be

integrated into the mainstream. The growth of Pride and its increasing

popularity with straight festival-goers has incited some activists to

reinforce the gay nature of the event.

Newly-appointed organiser Rachel Smith has said that the event is too

big and should be scaled down. She says this will allow Pride to be more

selective about its sponsors - an indication that she hopes to head off

the sort of embarrassment caused by the link with United Airlines.

And there are still signs that the pink pound is not proving to be a

great pull for advertisers. The Henley Centre had to abandon plans to

analyse the market when it failed to muster enough client interest.

Likewise, recent attempts to launch a gay lifestyle exhibition, Fused,

collapsed through lack of big-brand support.

In the process, it failed to deliver on the promise that: ’Fused will

demonstrate to the gay community that marketers recognise the innovative

and up-market consumer lifestyle that appeals to them, providing a forum

suitable for major brands to prove their commitment to them as

discerning and important consumers.’


- 77% are ABC1s

- 27% have college/university education compared with 9% of general


- 90% have no dependents

- 40% of gay men and lesbians earn over pounds 25,000 compared with 25%

for the UK as a whole

- Employment levels and pension ownership is higher than national


- 90% eat out regularly

- 79% take two or more holidays a year

- 35% visit a gay pub or club every week

- Bass’ gay bars/pubs turned over pounds 8.7m in 1995/1996

- 65% will boycott companies with gay-unfriendly policies

- Brighton and London are the gay hotspots for US tourists

- Gay Pride festival now attracts 250,000 people

Source: Information gathered from Gay Times, Channel 4 and Rainbow TV by

Global (Special Events), the company that attempted to launch Fused.


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