Big brands commence battle for the pink pound

The first same-sex civil unions took place in the UK last month, heralding a new “gay wedding” economy worth millions of pounds. The Civil Partnerships Act has thrown the spotlight on the pink pound, along with recent spats such as Ford’s decision to scrap ads in the US gay press to appease conservatives (MW December 8). The car giant later performed a U-turn and decided to allow campaigns to run following pressure from gay rights groups.

Some companies feel that it is worth marketing specifically to the gay community. After all, the total income of the UK’s gay and lesbian community is estimated at &£60bn by specialist marketing company Out Now Consultants. Gay honeymoons alone could be worth &£600m to the travel industry.

Jason Pollock, chief executive of the Pride festival, says there are behavioural differences between the gay and straight markets. Gay consumers will often buy the same items when they are in their 40s as they did at 18. Pollock adds that the gay population includes a high proportion of early adopters of new technology, with much of the pink pound coming from professionals working in media industries.

However, advertisers that want a slice of this lucrative market must show they understand the sensibilities of their customers, and observers agree that gay consumers, and those in other niche groups, still see themselves as being outside the mainstream. “We need to be wooed,” says Pollock. But he adds: “The point is that blue-chip companies cannot afford to ignore us.”

Ian Johnson of gay marketing specialists Out Now Consulting says that most large corporations in the US “actively develop gay marketing strategies”. His company, which has clients including IBM and Toyota facilitates understanding between consumers and clients.

Johnson agrees that marketing to the gay community requires a different approach that “complements the brand strategy but is tailored to maximise its effectiveness”. That means brands must tweak their creative work when aiming at the gay market. “The biggest no-no is the use of overtly heterosexual imagery in a gay marketing context,” he adds.

Using gay imagery to entertain or titillate a largely heterosexual audience will not attract gay customers either, Johnson warns. Straight people may also be put off – dozens of complaints were received by the Advertising Standards Authority over a same-sex kiss in a Dolce & Gabbana watches ad (MW December 15).

But Pollock adds that once the gay community has embraced a brand, it tends to stay with it. He points to Virgin Mobile and, ironically, Ford, which have benefited from sponsorship of Pride. If a company wants to market to the gay community there is no need to fear a backlash “because straight people don’t know it’s happening”.

Yet not all companies believe separate marketing tactics across different social groups is necessary. Tesco Personal Finance upset gay rights champion Peter Tatchell for “bandwagon jumping” (MW December 15) by calling for car insurers to offer similar deals to same-sex couples as they do to straight married couples. However, gay motoring website Top Gayer recently launched what it claims to be the first motor insurance policies aimed specifically at gay couples. Tesco Personal Finance says it has offered same-sex deals for two years, but has not gone out of its way to make an issue of it.

Whatever approach a brand takes towards attracting the pink pound, marketers would be wrong to ignore the economic significance of the gay community.

By Jonathan Harwood

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