Gays Online a New Ad Niche (from RB)
From Today's Washington Post,May 22 1999
We should let Schwartz know about GAAY.
Gays Online a New Ad Niche
By John Schwartz
Washington Post Staff Writer
Saturday, May 22, 1999; Page E1
Since the very earliest days of the online revolution, gays have known that a modem
could help them to reach out, even if they didn't come out. But these days, trying to
bring that community under one online roof -- and delivering the prosperous gay market
to advertisers -- is the name of the game.
Two major players are vying to become the Internet's gay brand name: Gay.com
Network and PlanetOut.
By the hyperbolic standards of today's Internet stocks, the new Gay.com Network is
fairly small potatoes. It was formed in March when two privately held companies joined
forces. Although they haven't disclosed the value of the merger deal, you can bet it
doesn't come close to the $645 million that bookseller Amazon.com recently paid for
three online companies.
Small, yes, but Gay.com nonetheless estimates that close to 1.25 million visitors hit the
site each month. And using a different standard, PlanetOut -- which is partly owned by
America Online's investment arm -- receives about 500,000 monthly visitors, according
to chief executive Megan J. Smith, noting that lesbians make up 36 percent of her
service's registered membership.
On many gay sites, "women are an afterthought," Smith said. "We've always tried to
have parity." PlanetOut has attracted advertisers including Alamo Rent a Car Inc.,
Starbucks Corp., E-Trade Group Inc., US West Inc., Virgin Records and Amazon.com
Inc.
Andrew Cramer, who founded the company called Online Partners that merged with
Gay.com in March, said his immediate goal for the combined company was simple: to
make money by bringing advertisers and the emerging gay market together. In general,
he said, "advertisers have no idea of the market, except that they're affluent and
influential." Cramer also brought in a large gay and lesbian community on America
Online.
Both Gay.com and PlanetOut say they can help marketers solve what PlanetOut calls
the "Closet Paradox:" reaching gays who might still be in the closet and might never go
to a bar or rally -- or even subscribe to a gay publication -- but who might look for
information or conversation from the privacy that a modem affords.
The prospect of creating a one-stop shop for advertisers wanting to reach a defined
audience could be an important model for electronic commerce, said Donna Hoffman,
a professor of business at Vanderbilt University who studies marketing on the World
Wide Web. With "community" becoming one of the most overworked buzzwords in
Internet commerce, Hoffman said a site that offers something like a real community --
people who share common interests -- could actually be more valuable to advertisers
than the bloated yet ephemeral "communities" currently built around free Web pages
and a slew of online services.
"I'd say this should be a very closely watched experiment," Hoffman said. "There could
be a lesson for other e-business models."
Both sites offer a dizzying array of services and contacts. Gay.com features news and
information from Gay.com's own newsroom, along with news feeds from more than 60
gay and lesbian publications such as the 32-year-old standard of gay journalism, the
Advocate. The site offers local news and tips for eight cities, including San Francisco,
London and Dallas-Fort Worth.
Both sites provide gay-themed features on finance, travel, arts and entertainment,
health and nutrition, shopping and more.
What neither site offers is sex. On the original Gay.net site, Cramer experimented with
offering erotica -- but ultimately decided "that's not the business we're going to be in.
We're in the business of community, news" and other services.
Like many other Web sites nowadays, both major sites boast extensive live chat areas
where people can socialize, hold forth, argue or trade jokes. On Gay.com, the range of
round-the-clock conversation is spectacular, taking place in 50 countries and seven
languages. Hundreds of volunteer discussion monitors keep things rolling and enforce
the online rules of conduct.
Gil, a 49-year-old in Birmingham, Ala., said in an online interview that the site "fills a
need." As a gay man who only recently came out, he's not interested in meeting people
in bars -- "I don't get out much" -- and finds the online world a more congenial place to
get to know people. He has dated some of the people he met on Gay.com, but said
he's mostly looking for conversation and companionship.
Cramer, too, knows the value of meeting people online. Soon after his original service
launched, the workaholic began receiving regular notes from a member in Boston, Al
Farmer, criticizing the site and making technical suggestions about how to improve it.
Over time, the conversation became more civil, and then more intimate; Cramer and
Farmer now live together in San Francisco and have gone through a ceremony
formalizing their relationship.
Will the online community draw advertisers? Gay.com cites a survey by Simmons
Research that suggests more than 80 percent of gay consumers would be more likely
to purchase a product advertised on a gay site than one that was not. Another survey
suggests that more than 70 percent of the Gay.com audience had already purchased
products or services online.
Gay.com is already a hit with some advertisers: pharmaceutical giant SmithKline
Beecham bought ads to promote its online education site about Hepatitis A,
(boymeetsboy.com). The site promotes the company's vaccine, Havrix. "They've been
a terrific partner," said SmithKline's Frank Dzvonik, product manager for Havrix.
"They've exceeded expectations in driving traffic to our site."
Online Partners polls its members and sometimes uses that information to help
advertisers reach them. But Cramer said the companies know that privacy is important
to their members, and don't supply information that can be used to identify them to
advertisers. Advertisers on PlanetOut include Procter & Gamble Co., International
Business Machines Corp., Microsoft Corp. and Virgin Records.
Once he brought together the online community, Cramer, 50, felt a need to do more
with it than sell ads -- he said he's hoping the site can become a center for gay and
lesbian activism as well. "The feeling of crisis over AIDS has subsided somewhat, but
it's going to allow people to refocus on many, many other priorities," he said. "Think of
the Matthew Shepard murder . . . we have not, in this country, come to an end of
violence or hate crimes."
The first big test of the power of the virtual community to act in the real world will come
next April with the Millennium March on Washington (www.mmow.com), a follow-up to
the 1993 gay march on the nation's capital. PlanetOut has said it will be a major
sponsor of the event, working to boost attendance and provide a live "Webcast" for
those who can't make the trip.
"This is going to happen with or without the Internet," Cramer admitted, but added,
"with the Internet, it could go over the top."
© Copyright 1999 The Washington Post Company
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