Approaching the LGBT Market

Since when is $5 Billion considered a niche?

By Joey Amato

Mr. Amato is the president of OUTreach Public Relations, a public relations and consulting firm targeting the LGBT market. For more information, visit or call 407-496-8751.

The lesbian, gay, bi-sexual and transgender consumer, commonly referred to as LGBT, is one of the most lucrative markets in the United States, yet many companies large and small find it difficult or somewhat impossible to reach them. In the past decade, diversity outreach has mainly focused on the Hispanic and African American markets, with the LGBT demographic being vastly overlooked. As of 2012, the total LGBT market reportedly accounts for approximately $500 billion. Why wouldn’t any company like a piece of that? The answer is simple. They don’t know how to effectively reach the market. Before you review some suggestions, let’s first go over some impressive facts. According to the recent Community Marketing survey, the average LGBT household income stands at approximately $81,500 compared to just $46,300 for the general population. Because many same-sex households do not have children, they have an incredibly higher amount of disposable income compared to straight households.

LGBT individuals are some of the first to embrace the current trends in technology, with 7 out of every 10 individuals owning a smartphone. 64% will purchase a smartphone or other new electronic device in the next year compared to 46% of their straight counterparts. LGBT consumers are using their smartphones to stay connected more than general consumers, and this makes them a highly desirable target for mobile advertising. Texting is also more popular with 53% of gay individuals sending 20 or more texts per day, compared to 42% of straight people.
Furthermore, one in four LGBT individuals has gone on a major vacation in the past year, accounting for nearly $63 billion of tourism revenue in the United States alone. New York, Chicago, San Francisco and Las Vegas were among the most popular destinations last year, while smaller cities like New Orleans, Sonoma, Palm Springs and Key West also fared well. Even though cost, gay friendliness and availability were factors, gay pride parades were also a key factor when choosing a destination.

With more and more LGBT adults spending their disposable income on big ticket items, the market is not one which companies should overlook. In fact, there are ways that companies can earn their share of this ever-lucrative market.

While many companies think advertising in LGBT media would be the most effective way to reach the market, studies have shown that placing gay-friendly advertising in mainstream media is more successful.

Gay Friendliness
Many individuals make their purchasing decisions based on a company’s gay-friendliness and Human Rights Campaign (HRC) ranking. However, the HRC only ranks larger companies, so it is important for small organizations to promote their initiatives with employees and within the neighborhoods they serve.

Support LGBT Charities and Organizations
Supporting organizations such as the HRC, HIV/AIDS organizations, LGBT youth initiatives or other local charities always helps win over the LGBT consumer. Many cities around the country also have LGBT chambers of commerce. If your company is primarily B2B, joining the local chamber is always a good idea as it’s the quickest and usually the most cost-effective way to reach LGBT businesses.

Speak to the market
While many companies think advertising in LGBT media would be the most effective way to reach the market, studies have shown that placing gay-friendly advertising in mainstream media is more successful. This includes television, radio, web and print advertising. When it comes to the Internet, website banner ads are most effective, followed by Facebook ads. However, targeted advertising in LGBT specific media outlets has proven to be effective depending on the product or service you are offering. Interestingly, gay African-Americans tend to refer more to local LGBT newspapers and magazines while Asian gay men and women are somewhat more likely to read LGBT blogs.

Support LGBT Political Causes
This area gets a little tricky because not all gay people are alike when it comes to their political views. Groups such as the Log Cabin Republicans and Dolphin Democrats have emerged. If your company is trying to lend its voice to politics, it would be a good idea to support an organization like this; otherwise, you should consider supporting an HIV/AIDS charity as that would speak to the mass population.

Feature LGBT spokespersons
The best example for this would be J.C. Penny’s (JCP) partnership with Ellen DeGeneres. Shortly after the announcement, which was accompanied by a series of memorable television commercials, LGBT individuals flocked to JCP, many of which who had never stepped foot in the store before. Finding a respected spokesperson is always a good way to increase public awareness.
These are just a few ways that a company can speak to the LGBT market, although with the advance of technology, new advertising mediums are being created every day.