MANAGING THE MARKETING MIX LGBT MARKETING TRENDS AND

MANAGING THE MARKETING MIX: LGBT MARKETING TRENDS AND HOW TO REACH THE LGBT CONSUMER TODAY Moderator: Cordey Lash, Hilton Anatole Dallas Mark Elderkin, Gay Ad Network David Jefferys, Altus Agency Bob Witeck, Witeck Combs Communications, Inc. SPONSORED BY: AT&T AND MILLERCOORS

America’s LGBT Market Today Managing the Marketing Mix NGLCC-certified supplier since 2004 NGLCC-Wells Fargo 2006 LGBT Business Owners of the Year

Counting America’s LGBT Population The Numbers – 16+ million adult Americans over age of 18, conservatively between 6 to 7 percent of adult population (2010 estimate) – Roughly 8 out of 10 gays and lesbians consider themselves to be “out” to others – GSS Data (2008) reports 7. 2% of adults 18 -30 self-identify as LGB. 9% of all adults either self-identify or report same-sex behaviors. Gender Breakdown – Roughly 55 -45 split between males and females who self-identify as LGBT - over 8 million men and 6 million women Sources: US Census (2000), Witeck • Combs/Harris Interactive (2007) and GSS 2008

Top 10 U. S. Metro Areas • First ever mapping of same-sex households. • Lesbian and gay couples found to live in 99. 3% of all US counties. • 45% of samesex couples live in 15 major metro areas. US Census (2000), Williams Institute research on American Community Survey (2000 -2007)

Nearly 4 of 10 Americans… Almost 14% of the US population lives in a state that either has the freedom to marry for gay couples or honors out-of-state marriages of gay couples. 25% live in a state with either marriage or a broad legal status such as civil union. 37% of the US population (over 100 million Americans) live in a state which provides some form of protections for gay couples.

2009 LGBT Buying Power Buying power is not wealth – it is the sum total of what we have to spend after paying our taxes. [It is also another term for disposable personal income or DPI. ] LGBT buying power for 2010 is estimated at $743 Billion. Niche Market Population 2009 Buying Power LGBT Adults 16 Million $732 Billion Hispanic-Americans 46+ Million African-Americans 43+ Million Asian-Americans $978 Billion $910 Billion 15 Million $509 Billion Sources: Selig Center for Economic Growth, University of Georgia, US Census projections (2007), U. S. Bureau of Economic Affairs, Packaged Facts, Witeck • Combs /Market. Research. com estimate (2007) Note: The gay, lesbian and bisexual population estimate, unlike the other population segments, is based only on adults 18 years of age and older.

LGBT Brand Loyalty • 78% of LGBT people are extremely likely or very likely to consider brands that are known to provide equal workplace benefits for their employees, including LGBT workers. • 70% of LGBT people are likely to consider brands that support nonprofits/causes important to LGBT consumers. • 69% of LGBT people say their purchases would be influenced by a buyer’s guide that shows companies with positive workplace policies towards LGBT employees. • 47% of L/G people say they would be very likely to remain loyal to a brand they believe to be very friendly and supportive even if costs more or less convenient Source: Witeck • Combs and HPOL data 2007, 2006)

Managing the Marketing Mix

NAVIGAYTOUR The Navigaytour is available in print and online § Increased print quantities § Added virtual component, website listings § Distribution as close to 1 -to-1 as possible

PASSPORT MAGAZINE Passport has expanded from print to web and now online video § Went from 8 issues per year to 11 § Circulation rose from 100, 000 to 130, 000 § Developed a combination of online, TV and event coverage

MAGAZINE STATS What’s happening with print? § Canada’s The Globe and Mail spent $1 billion to redesign its print publication this year § 92% of U. S. adults read magazines § 36% think of someone to pass it along to after reading a magazine § 70%, indicated that they were “very” or “somewhat” likely to subscribe to a magazine based on their pass-along experience

MAGAZINE STATS What’s happening with print? § Readers pay attention to magazine ads, with other media they pay to avoid advertising § 53% of pass-along readers and 51% of total readers took or plan to take action as direct result of exposure to specific print ads § Consumers buy more magazines when there’s big news (Michael Jackson-themed magazines generated an extra $55 million in sales in July 2009)

PRINT AND ONLINE How are they connected? § Magazines drive web search more than any other medium (more than double Internet advertising and social media) § Almost a quarter of all new magazine subscriptions come from the Internet § Hearst, Conde Nast and Time have developed i. Pad applications to view publications § 30% of renewing print subscribers chose a bundle of both the print edition and interactive edition (at a 33% premium to the standalone price of either)

What are the opportunities? PRINT AND ONLINE § Offer archive of previous issues that can be accessed by current customers § Create awareness with free trial subscriptions § Develop flexible, innovative offers (like Netflix) § Cross-sell opportunities increase— additional subscription sales via recommendation engines and browsing features (additional sales for 17% of current subscribers)

Companies Interest in Online Media • More companies entering the market through online media – Socially acceptable now, backlash not critical issue for most – Can start small with Google, Facebook or Display Ad buys • New Budgets – Shift from traditional budgets – Larger campaign spending levels ramping up – More sophisticated media plans using mainstream agencies • What Recession? – Shift from Brand Preference & Purchase Intent to Performance Marketing – Revenue for LGBT online publishers in aggregate on Gay Ad Network has increase each year since 2007 mainly from Fortune 1000 campaigns.

Evolution of the Gay Media (online) Concentration Internet has become a Primary Focus - Local/National news shift to guides/electronic - Highly competitive online - Low barriers to entry - Very fragmented, small, unsocial - Difficult for national advertisers to leverage A couple of portals controlled gay Fragmentation Many sites/blogs with limited reach Aggregation Required to reach more of market 1995 2000 2005 Better Options for Advertisers - Partnerships with aggregators - Tools from social network providers - Mobile platform to expand reach 2010

Credibility 1. 2. 3. Introduction to the Community Building Consumer Trust and Credibility Solidifying Relationship as products are positioned as preferred. . Branding Investment (Low ROI) 4. Today, companies can get to the same end game much faster. Mass Buying Community Customer Conversion (High ROI)

New Competitors Entering the Market • It’s easier than ever – More research and history — confidence in identifying segment – Greater LGBT reach — access more prospective customers – Better targeting — demo, behavioral, geo-targeting, retargeting – Direct touch points through Social Media – Facebook fan pages – More immediate — measureable results and instant feedback • It’s more efficient – Pay per Click (PPC) Search Marketing optimized across the major ad networks (Google Ad. Words Network, Facebook, Bing Ad Network, Yahoo! Ad Network) – Gay and Lesbian Web Sites with performance optimization (frequency & reach) – Ad Networks with retargeting to leverage pre-qualified traffic coming from search and other campaigns

Number One Tip Don’t Reinvent the Wheel Leverage General Market Teams, Systems, Intelligence, Creative Tailor for Segment, Learn from Media Partners Improve and Refine Test Measure Optimize