How Corporations are Profiting from Gay Pride

Targeting the gay community can make for more, loyal customers.

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Sponsoring Pride sends out a message about a corporation's values. It can also pull in lots of new customers (and money).

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Bud Light commercials often fall into the traditional beer commercial stereotype: Gorgeous women and the bumbling men trying to win them over (beers in hand, of course). The brand plays up its heterosexual side in other ways, as well, like teaming up with Playboy for Super Bowl promotions.

To people not familiar with the gay scene, it may therefore come as a surprise that Bud Light is a major sponsor of several Gay Pride festivals taking place across the U.S. in June, LGBT Pride Month, —look no further than Bud Light's Bud Boyz model contest at Chicago's Pride festival this month.

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In fact, a number of the nation's most recognizable brands are behind all of the concerts, parades, and rainbow flags. Though gay rights remain divisive in America, and only a slim fragment of the population identifies as lesbian, gay, or bisexual—around 3.5 percent, by one recent estimate—the decision to promote gay rights is simply good business sense.

"Nobody sinks multiple thousands of dollars into a festival on an investment without an expectation on return," says Amy Drayer, vice president of strategic initiatives with the GLBT Community Center of Colorado, which produces Denver PrideFest.

"We've seen parallel growth between our sponsorship program and attendance," she says, and she adds that this parallel growth may not necessarily reflect that companies are becoming more LGBT-friendly. Rather, companies likely see dollar signs when they see packed streets at the local Gay Pride parade. "A larger festival is a better investment for a national company."

Absolut Vodka, Zipcar, Google, Coca-Cola, Wells Fargo, AT&T, Whole Foods, and Walgreen's are just a few of the companies lending their support to large pride festivals this year. The people attending the festival tend to take notice and patronize those companies.

"Oh, absolutely. They do pay attention to that," says Missy Toms, spokesperson for Capital Pride, Washington, D.C.'s local Pride festival. "You have a large number of allies who come to the event. [If you don't sponsor,] you're missing that whole market, too. I'm an ally, and I make my buying choices based upon who's sponsoring Pride."

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Sponsoring pride can mean not only new business but repeat customers. "[LGBT consumers] are much more likely to be loyal to a company that markets directly to them," says Drayer.

Sponsoring Pride "most certainly" has drawn customers to Wells Fargo, says Mark Ng, LGBT segment manager at Wells Fargo. "Consumers are just as interested in a company's values as they are with our company's products and services."

And pulling back on support can mean losing the business of the festival itself, says Toms: "The bank we bank with right now pulled back as a sponsor this year. We're going to transfer our accounts to a new bank. We support businesses who support our community."

The LGBT and ally communities may respond when companies market directly to them, but people who never stop by their city's Pride festival might never know that a particular corporation has a hand in it. That audience segmentation is reflected in advertising as well.

Until recently, "for the most part you would see corporations producing gay-specific ads and placing it in gay-specific media," says David Paisley, senior research director of Community Marketing Incorporated, a gay and lesbian market research firm.

While Wells Fargo has been involved in pride parades for 20 years, its advertising appealing to the gay community features predominately in publications that are themselves targeted to that community, as well as trade publications.

"Any good niche marketing is just that: niche marketing," add Paisley. "If Budweiser is in a Pride parade, they're going to have one imagery and messages. And if they're marketing during the Super Bowl, they'll have a different group [of imagery]."

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