For decades, the Wall Street Journal has called the LGBT market the dream demographic. This is with good reason, broadly data points to hyper education, higher income, more management positions, more influencers, and more spending compared to straight peers.

Within the largest advertising spenders in the country, big brands use segmentation and cohorts both to shape products and tailor advertising for community relevance. There is endless white papers and case studies discussing what the LGBT demographic is and how to target them.



Gay affluence: Why the myth persists and what the reality teaches us

The perception of gay affluence has persisted since the late ‘70s, helped by flawed research and stereotypical depictions of wealthy gay men on TV. The common (and incorrect) “wisdom” goes that gay people get higher educational degrees and work harder at their jobs to offset societal homophobia, and when they partner up, they become DINKs (that is, Double Income couples with No Kids). But this popular wisdom is a lie — it has many holes and leads advertisers astray when marketing to LGBT consumers. By exploring the causes and facts behind the myth, we get a more complete picture of LGBT affluence and a stronger idea of how to navigate the LGBT market.

Until now, most data on LGBT affluence has come from gay and lesbian individuals willing to disclose their sexual orientation. Such studies have long ignored bisexual, transgender and closeted people as well as those who experience same-sex attraction and gender non-conformity but do not identify as LGB or T — hardly a representative sample of all LGBT people. In fact, those willing to disclose their LGBT identity may be more financially secure than those who refrain for fear of worsened poverty or discrimination.

Even the U.S. Census, creates a lopsided picture of LGBT wealth. While it currently counts married and unmarried same-sex couples, it doesn’t ask people about their sexual orientation or gender identity, thus excluding LGBT singles, bisexuals and trans people; and it will continue to exclude these people even into 2020.

The truth is, DINK LGBT couples are also becoming less common as same-sex marriage and adoption rights have become legal nationwide. The 2010 U.S. Census estimated that 22 percent of cohabitating lesbian couples are raising kids as are 10 percent of cohabitating gay couples.

Whether they’re married, have children or not, a 2013 Williams Institute study revealed that LGB individuals and couples continue to face higher levels of poverty than heterosexuals. A child in a same-sex household is twice as likely to be poor than one in a mixed-sex household — and poverty rates increase when you factor in non-white and transgender people as well as residence within states lacking employment, housing and other LGBT non-discrimination protections.

Previous studies of LGBT affluence have largely overlooked the economic impact of anti-LGBT discrimination. For example, a 2011 study — the first large-scale audit of discrimination against gay men in the U.S. — revealed that openly gay men were 40 percent less likely to receive a job interview than straight men, and a study by Keith Ericson, professor of public policy at Boston University, showed that many employees (when given anonymity) express anti-gay sentiment and discomfort with the prospect of having an LGBT superior suggesting that employment discrimination against LGBT people goes deep into the employment process. And a 2013 CDC report cites societal stigma and discrimination as a cause for greater disparities in LGBT physical and mental health, all which take a economic toll.

That’s not to paint an entirely negative picture of LGBT affluence, but rather a more complete one. While an income and equality gap definitely exists between LGB and heterosexual people, gay and lesbian income actually falls across a wide spectrum. A 2012-2013 Prudential study of 1,401 LGBT Americans from a wide variety of ages and “outness” found 22 percent of respondents saying they were “upscale or doing well,” 47 percent “paying their bills and staying independent,” and 31 percent feeling “on the edge or falling behind.” And while we’ve thoroughly deflated the myth of gay affluence, let’s take a second to deflate another stereotype: that LGBT are white liberals enclaved within in East and West coast urban centers.

The Prudential study found that while most LGBT do live in urban centers, 53 percent reside in medium-sized cities rural areas. Furthermore, the 2013 American Community Survey shows that a majority of same-sex couples live in the south and that the national LGBT population has more racial diversity (particularly among Black and Latino/a people) than the non-LGBT population.

In regards to politics, a nationally representative 2013 survey of 1,197 LGBT adults by the Pew Research Center found that 80 percent of LGBT people identify as Democrat or Democratic-leaning. That means that — if the Williams Institute’s 2011 estimate is correct, and 3.8 percent of the U.S. population is indeed LGBT-identified — around 2,423,640 LGBT Americans have conservative/Republican political leanings; that’s roughly the size of Houston, the third largest state in the U.S.. A staggering 51 percent of LGBT people have no interest in integrating wholly into mainstream culture and think “LGBT adults should be able to achieve equality while still maintaining their own distinct culture and way of life.”

Far from being monolithic, the LGBT population reflects an array of income, race/ethnicity, geographic locations and political opinions. Nevertheless, it collectively has an estimated buying power of $884 billion, and companies are spending an estimated $370 million to connect with that power through online, print, live event and television advertising, particularly in LGBT-specific spaces.

It’s money well spent because after decades of political demonization and media exclusion, the LGBT market has become a highly responsive one that exhibits brand loyalty, especially when media feature LGBT people or champion LGBT sociopolitical causes like employment rights, adoption rights, and HIV/AIDS prevention and treatment — while their political affiliations and families may vary, LGBT people still share the same social battles, and companies can benefit by allying themselves to those causes.

LGBT people develop strong bonds to LGBT-supportive brands: 41 percent of GLB individuals regularly read LGBT websites or view programming with LGBT characters; anywhere from half to a third have attended an LGBT pride event, a rally or march in support of LGBT rights, belong to an LGBT organization, or have donated money to politicians who support LGBT rights ; and a 2014 report says LGBT people are more likely than the general population to be politically engaged.

This political devotion deepens the more a company embodies its ethic. Studies have shown that up 64 percent of LGBT consumers are more inclined to consider brands that market to LGBT people, 89 percent are more likely to consider brands that offer equal workplace benefits for LGBT employees, and respond well to companies that provide financial support to LGBT causes. Beyond buying and selling, companies with progressive LGBT policies retain LGBT employees much longer, reducing the costs of replacing them or losing them to discrimination burnout.

Progressive LGBT policies not only help attract LGBT consumers but also non-LGBT ones as well. For example, an August 2014 Google consumer survey found that 47.7 percent of young millenials are more likely to support a brand after seeing an equality-themed ad — online videos espousing support for LGBT individuals, families and marriage equality gained Burger King over 7 million views through its 2014 “Pride Whopper” campaign and Honey Maid graham crackers over 12 million combined views for its 2014 “This is Wholesome” and “Love” ads.

Research has shown that while alcohol, fashion, travel, automotive, and financial services field have all developed ad campaigns targeted at LGBT people, other areas such as telecoms, fast/snack foods, electronics, office, healthcare, and retirement service fields have largely ignored LGBT consumers. Targeted campaigns acknowledging the complex financial, geographic, familial and sociopolitical realities of LGBT people stand to reap enormous benefits, not only as smart marketers but progressive businesses willing to fight for universal human rights.