LOS ANGELES -- The West Hollywood branch of Bank of America displays a banner supporting Gay Pride Day, but aside from a few such symbolic acts, bankers are ignoring a potentially lucrative market, according to several marketing executives.
A new marketing firm called AKA Communications Inc. hopes to remove that blind spot. The company, which was founded in 1985 but only recently branched from advertising into marketing, calls itself the West Coast's first full-service agency to specialize in homosexual markets. It focuses particularly on financial services concerns.
Studies show that the country's 18.5 million gays and lesbians have $ 500 billion in discretionary income, according to Kevin Ray, president of a AKA, and executives at Rivendell Marketing Co., a Plainfield, N.J., firm that also focuses on the homosexual market.
High Incomes Noted
Gay household incomes average $55,430, compared with average U.S. household incomes of $32,144.
What's more, 18% of gay households boast incomes over $100,000, according to Mr. Ray.
Few financial institutions have marketed to this affluent segment, according to Mr. Ray. "Basically this is an untapped market for banks," he said. "It is a real opportunity."
Jeffrey Vitale, president of Overlooked Opinions, a Chicago market research firm, agrees that banks have overlooked an important market, but says things are changing.
"There is significant interest, but not marketing by banks or savings and loans so far," he said. "We have several big banks that have been working with us on market research."
One Advertiser Expected
Mr. Vitale estimates that one of these banks will begin marketing to gays in about a year.
Nevertheless, several bankers, who did not want to be identified, said the specialized agencies are putting too fine a point on market segmentation.
"We feel we capture this segment with our regular marketing and advertising," said a senior marketing executive for a big New York bank.
The agency executives, naturally, disagree. The gay and lesbian community may not need special products, they say, but companies should be alert to advertising and marketing pitches that could alienate gays by appealing solely to heterosexual concerns.
Advertising campaigns can be adjusted to appeal to the gay market, the agencies say.
"It may be something as simple as altering an advertisement to show a happy lesbian couple getting the financing for their dream home," said Mr. Ray.
Although many bankers might not object to the idea of marketing to gays, Mr. Ray acknowledged they may resist advertising in gay publications because of their attitudes toward editorial content and the customary advertisers. That could be a mistake, he said.
"The best vehicle for marketing is the gay and lesbian press," said Mr. Ray. "You spend very little to reach a very affluent market."
Getting bankers to overcome their concerns about the gay press, however, is not easy. "One bank in California was getting set to go with this [and] took some sample publications to the board, "Mr. Vitale recalled. The whole board had a stroke."
But the marketers said there are a variety of publications to choose from, some more mainstream than others.
In addition, some general publications reach a large gay audience, Mr Vitale said. A skillfully designed ad in these media could appeal specifically to gays, he suggested.
Banks that are open to direct marketing also may find that area is useful alternative, since lists are available.
In any case, bankers should recognize that gay consumers have proved to be more loyal than their straight counterparts, the marketers said.
"Here is this market with higher-than-average income, education, etc., just waiting for a bank to advertise to them," said Michael Gravois, president and chief executive of Rivendell. "The first banks to recognize this are going to have a group of very loyal customers."