Wednesday, March 3, 2010

Pink is the New Green: Corporate America Courts The Dominating Spending Power Of The LGBT Community

  Pamela Raymond just published this article, which has some nice updated figures I haven't seen recently. The original article can be found at The Vital Voice.
 As the economy shakes from dramatic dips and turns, businesses are taking a pointed look at its advertising budgets and seeking ways to maximize its effectiveness to those still willing to spend their hard earned dollars. This leads companies to start thinking about how it “speaks” to its best consumers or how to cultivate new awareness amongst the general consumer pool.
   One consumer pool that has gotten more attention is the LGBT segment. With a projected buying power to exceed $835 billion by the year 2011, according to a study by Harris Interactive and Witeck-Combs Communications, it’s easy to see why this group is becoming highly sought after.
    The “pink dollar” or the “Dorothy dollar” as it is commonly known, refers to the purchasing power of the LGBT sector in the United States with incomes over $50,000 a year. This group is also identified as DINKs, “double income, no kids”, and has more disposable income to spend on higher end goods and services. “Pink” is the new “green” for many companies and organizationsthat seek out the brand loyalty of the LGBT consumer and hope to translate that to cold, hard cash.
    National marketers are jumping on the LGBT bandwagon at noticeable rates. Gay and lesbian cable station, LOGO, has over 80 major brands sponsoring various programming and events as well as digital entertainment is gearing itself more towards content and relevancy for the LGBT market. Target marketing within this community is hitting a bull’s eye for many corporate brands.
    With so many dollars up for grabs, the LGBT segment has become so powerful and influential in spotting trends and setting trends that companies want to get a piece of the action. According to a study of in 2008 by Harris Interactive and Witeck-Combs Communications, a premier collaborative in tracking LGBT tastes and behavior triggers, of the gays and lesbians taking the survey, 48% said they follow the latest trends and styles compared to 38% of heterosexual adults. Lifestyle products from liquor to linens see the vast potential in catering to the LGBT consumer. Adoption of the emerging online communications tools is more popular in the LGBT community. 55% of gays and lesbians read blogs and 55% use the social media site, Facebook, compared with 38% and 46% of heterosexuals, respectively. 23% of LGBTs are members of the professional social media site LinkedIn. Only 13% of heterosexuals claim membership with LinkedIn. As corporations strive to maximize its presence and relevancy online, the LGBT community is already utilizing the various social, professional and personal engagement tools offered by the Internet. Successful online advertising and awareness campaigns targeted to the LGBT segment will impact the ROI of many companies set on capturing the valuable “pink” dollars as the economy evolves. Online communications statistics are based on a 2009 study by Harris Interactive and Witeck-Combs Communications.
    Established entities are going one step further in its courting of the LGBT community by developing specific campaigns to engage the community directly. ABSOLUT Vodka introduced during Pridefest 2009, the limited edition Pride ABSOLUT bottle to commemorate the 40th anniversary of the Stonewall Riots. The packaging featured a rainbow design to honor the men and women who fought back on the streets of New York City in 1969. ABSOLUT Vodka is also a major sponsor of the LOGO television show, RuPaul’s Drag Race with heavy product integration including a signature lounge utilized by contestants during deliberations.
    Is this a bold move for ABSOLUT? Not according to Jeffrey Moran, Vice President of Public Relations, Event Marketing, Sponsorship and Multicultural Marketing at Pernod Ricard USA, distributor of ABSOLUT Vodka. Moran states, “We don’t consider it to be a bold move. ABSOLUT was one of the earliest major advertisers to participate in LGBT media with ads dating back to 1981. So you see, we’ve been honoring pride and celebrating the achievements of the LGBT community for many years. Through communityspecific advertising, promotions and charitable contributions, ABSOLUT is of the most consistent marketers to the LGBT community and continues to be synonymous with vodka at gay and lesbian bars and living rooms from coast to coast.”
    Moran also commented, “In today’s marketing landscape, it’s not enough to just roll out TV ads or run bar promotions and expect consumers to notice and call for the brand. We need to engage the consumer and do something experiential, something relevant to their lifestyle. We have a long standing relationship with the LGBT community, but we don’t take it for granted. We have to constantly innovate if we want to stay relevant. As the first spirits brand to offer an LGBT-specific bottle at retail stores, ABSOLUT continues to show its innovation and relevance.” In this economy, target marketing to groups of similar consumers is on the rise. Dr. Mary Albrecht, Professor of Marketing at Maryville University St. Louis explains the desire behind companies taking a targeted approach. Dr. Albrecht remarks, “Target marketing is seen as more efficient because it potentially reduces the waste in marketing efforts especially in advertising and promotion. Waste is reaching someone who is not in the target market with your ad message. Target marketing is also considered more effective because the company can customize the marketing program specifically to that homogenous target market. However, as the company develops different marketing programs for different target markets the marketing cost is likely to increase.”
    Dr. Albrecht goes on to say, “Companies seek markets that present good opportunities. Companies like Procter & Gamble can cherry pick the most attractive market segment opportunities. They carefully select the product-market combinations that have a high probability of success and those segments become their target markets. Companies choose target markets that are substantial enough to be profitable, accessible to the company through channels of distribution and communication, and have needs that fit the company can satisfy with its product mix.” The LGBT market would certainly qualify as a substantial and profitable segment with estimates of population growth to reach 16.3 million by 2011.
    The “pink” dollar rules in this economy. Brand loyalty is becoming more important to stable sales and potential growth. The LGBT community is a powerhouse in impacting corporate bottom lines. Jeffery Moran of ABSOLUT Vodka sums it up best when describing why the LGBT dollar is so important, “Our mission is to be the coolest vodka on the planet – so there’s no way to be cool unless you’re doing great things for all your consumer segments, and since the LGBT consumer is clearly the coolest, we wanted to be sure that we celebrate all the milestones together. In an ABSOLUT World, everyone is encouraged to be true to themselves. That world is more colorful, diverse and respectful. As people celebrate Pride this year, we want them to be proud of who they are and let their true colors shine."

6 comments:

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