Gay Media Is Back
PlanetOut, the parent company of both Gay.com and PlanetOut.com, had its biggest advertising year yet, generating total ad revenues of $6.54 million, a whopping 41.3 percent increase from $4.63 million in 2003.
By comparison, the overall online ad industry also surged 33 percent in 2004, according to the Internet Advertising Bureau, while advertising in all media rose more modestly to 6.3 percent, according to the Myers Report.
Mark Elderkin, co-founder of Gay.com and president of PlanetOut, says 2004 was "an amazing year with strong advertising growth for our business."
PlanetOut's next largest competitor, HIM Media, with sites including Gaywired.com and Lesbianation.com, also enjoyed a 25 percent increase in revenues reaching $500,000 last year, according to HIM president Matt Skallerud. (PlanetOut and HIM properties both carry Commercial Closet's column.)
Similarly, the decade old Gay Market Press Report, produced annually by gay newspaper representation firm Rivendell Media and ad agency Prime Access Inc., found that ad spending in gay and lesbian publications reached $207 million for the year, an increase of 28.4 percent over 2003. That compares to a similar 26.7 percent lift in newspapers overall, according to the Newspaper Association of America, and 11.1 percent growth in magazines, according to the Publishers Information Bureau.
Like the general market, most of the growth in gay print was experienced by local publications instead of national ones, the Gay Market Press report says. Local gay newspapers, for instance, experienced a 53.9 percent increase in ad revenues, while national gay magazines generally saw just a 2.5 percent increase.
Nonetheless, things were rosier for OUT magazine than the rest in its class, according to Joe Landry, publisher of LPI Media's OUT and The Advocate, which are included in the Gay Press Report. Landry says OUT was up 26 percent in ad pages, and Advocate up 7 percent, as measured by TNS/PIB. "We saw overwhelming ad growth. It was incredible," he says about OUT.
New advertisers continue to seek out the gay market, including Advantage flea control from Bayer, and Atkins, Casio, Dell, Eastman Kodak, Eclipse gum from Wrigley, Edge shave gel from S.C. Johnson, Intel, L'Oreal for Vive shampoo and Men's Expert skin care. Other advertisers include Oral B tooth brushes from Braun-Philips, Panasonic, Pepsi Cola Co., Scion from Toyota, Sony, Starbucks, and Westin and Wyndham hotels.
Previously, LGBT print media suffered three consecutive years of revenue declines, diminishing the enthusiasm of the Gay Press Report's publishers for making efforts to publicize the data. (The report tracks ads only from April editions of 139 North American gay publications and projects the data for the year an approach criticized by some.)
Major growth categories in the 2004 Gay Press Report included health/fitness/grooming, with a 87.2 percent increase, and alcoholic beverages, up 76.5 percent.
The report also found that customized ads for gay readers experienced a dramatic increase, surging 242 percent from major corporations such as Delta, IBM, L'Oreal, Orbitz, Wyndham and others. Interestingly, national publications received only a 3 percent share of the increase, with the rest going to local publications.
LPI's Landry predicts gay creative ads will rise, but cautions they are not a panacea for success. "If they're done well, they're terrific," he says. "If not, they're like any other ad."
By contrast, PlanetOut's Elderkin projects little increases in customized ads, though banner ads are a different breed than print. "The development of unique gay creative is not necessarily the right approach. The overall quality of a campaign's creative execution and its alignment with the brand's general market messaging most often has the greatest impact."
Following the burst of the Internet bubble, as companies moved away from online advertising, PlanetOut strengthened its non-advertising revenue sources. Advertising still accounts for only 26 percent of PlanetOut's total 2004 revenue, while 65 percent comes from personal ad fees, and 10 percent from retail sales of items like trendy underwear and DVDs. Gay.com and PlanetOut have more than 3.4 million combined active American members, 127,500 of whom are paid users, the company's financial statement said.
Elderkin believes the anticipated June launch of LOGO, media giant Viacom's gay cable network, will increase awareness of the LGBT community among advertisers and bring the community even more into the mainstream.
"It will help show people that being gay is something not to be afraid of," he says. Elderkin also anticipates companies will allocate bigger budgets to gay advertising overall, because of the higher costs to advertise on television.
LOGO's arrival will certainly have a significant impact on gay media sales, bringing greater attention to the market, and confidence to advertisers who already work with Viacom on other networks. LOGO so far has announced founding sponsors Paramount (in the Viacom family), Subaru, and Orbitz, but will no doubt attract more in the coming year as advertisers sort through their growing variety of choices.
Reporting by Eric Noll.
The Commercial Closet bringing lesbian, gay, bi and trans sensitivity to corporate advertising.