Susan Murphy-Milano...

I apologize, but I just don't get it. All the fuss over what gay and lesbians spend or where they vacation, etc, etc...Do they spend their hard earned dollars differently than heterosexual people? Don't they also go to a store and pull out their credit cards, checks books and money the same as everyone else?  Or is there a special technique for those in the marketing and retail world to make a distinction.  Is there a need to highlight the spending habits of a particular group who enjoys a relationship with the same sex? Why can't the numbers reflect the American Public's spending habits as it has done for so many years? Last time I checked at a department store nobody was paying much attention.

But now it seems breathtakingly obvious that companies wooing gay and lesbian customers should use gay-themed imagery and content. Yet even though it's been years since corporate America started running ads in gay publications and Web sites to target the nation's 15 million gay and lesbian consumers, many companies have taken surprisingly long to do something as simple as show two men holding hands or a lesbian couple with their son.

But no longer. More and more companies are developing ads with specific gay and lesbian themes -- at no small expense -- in a bid to capture a piece of a market with $640 billion in buying power.

"Typically, companies would come in, run their regular ads to get their feet wet, the same ads (they run) in other consumer books," said Todd Evans, CEO of Rivendell Media, a New Jersey company that represents gay media companies.

"As they get more comfortable with it, they realize they don't have backlash, and they go that next step to have specific creative (content). ... That's big news, because to make specific creative is a very expensive proposition."

Last year marked the first time that advertising with gay-specific content comprised more than half of all ads in the U.S. gay and lesbian press, according to an annual report by Rivendell and New York's Prime Access Inc. that reviews 151 individual gay and lesbian titles. Only three years before, gay-specific content comprised just 9.9 percent of all ads in gay and lesbian publications.

In national gay and lesbian magazines, such as the Advocate and Out, where national brands dominate, gay-specific ads were more common last year, accounting for 74.1 percent of all advertising -- up from 59.1 percent in 2004. The report said that's "a clear indication that the majority of national brands marketing to the gay and lesbian audience are creating unique advertising executions that appeal directly to these consumers' sensibilities and mind set."

"You can no longer have your product with a little rainbow flag next to it and expect to reach the gay and lesbian audience," said Jeff Soukup, chief operating officer at San Francisco's PlanetOut, which owns Web sites Gay.com and PlanetOut.com, as well as print publications the Advocate and Out. "You need to be very targeted. When Jaguar advertises, they don't just show a car. They show a gay or lesbian couple walking toward it hand in hand."

While they welcome inclusive images, gay and lesbian consumers are sophisticated enough to differentiate between window-dressing and companies that really walk the walk, said a variety of Chronicle readers informally polled by e-mail.

"As they say, put your money where your mouth is," wrote Don Savoie of San Francisco. "If companies really want to show their diversity, support for (gay and lesbian) events and domestic partnership benefits are strong ways to do it, especially if they are facing a tough backlash from groups who claim to be 'family-friendly' or 'traditional values.' I am inclined to support companies who show resolve and backbone."

Sponsoring events, such as this week's gay pride festivities, is one key way companies try to show that they're serious about the market.

"Companies who go into sponsorship are aware of the need to show support for the community and not appear to be pandering to us just to get a dollar," said Michael Wilke, founding executive director of the Commercial Closet Association, a nonprofit group that tracks images of gays and lesbians in advertising.

San Francisco's gay pride festivities have two dozen corporate sponsors, including Bud Light, Delta Airlines, Travelocity, Comcast, Wells Fargo, San Francisco Toyota, Bank of America, MasterCard, Diet Pepsi and Showtime, which pay about $10,000 for a parade entry and $8,000 for a booth. (The Chronicle and its online affiliate, SFGate.com, are principal sponsors.)

"We find that (corporate) partners who come to us (have) a very deep commitment" to (gay and lesbian) causes, said Lindsey Jones, executive director of the San Francisco Lesbian, Gay, Bisexual and Transgender Pride Celebration Committee, which produces the event. "As a community, we know what it's like to be marketed to. What tends to be important is corporate partners who stay with the movement. I think the loyalty increases."

Both the Gay Games and the Out World Games, despite taking place within a week of each other this summer, have attracted strong rosters of corporate support, Wilke said.

"The Gay Games has raised $2 million in sponsorship this year, which is the highest it's ever had," he said. "The last time it was in the United States, back in 1994 in New York City, the Gay Games raised $700,000 in corporate sponsors."

Robert Witeck, CEO of Witeck-Combs Communications, a Washington marketing and public relations firm that specializes in gay and lesbian consumers, said many corporations have matured in their approach to the market, targeting different segments, rather than treating it as one indistinguishable group.

"Not all gay people are the same," he said. "We're not homogeneous even though we have the word homosexual."

Gay and lesbian consumers with children represent one subgroup corporations recently have begun to acknowledge in their marketing. Another area of growing sophistication is the financial services field, where firms are targeting the audience for everything from retirement planning to mortgages.

"When you think of conservative, you think of the bankers of the world, but they're not (conservative) in terms of consumer outreach," Witeck said. "They're very keen to connect with people on the one thing everyone has in common: sensitivity about their money."

It's a fallacy that gays and lesbians make more money than straight people. In fact, their incomes mirror those of the population as a whole. But what does differentiate them as consumers is that they have more discretionary money since they're less likely to have children. As of the 2000 Census, one in five gay male couples and one in three lesbian couples had children.

Moreover, gay consumers regularly show up in studies as having more allegiance to companies that court them. "Loyalty stats of gays and lesbians are higher than loyalty stats for NASCAR fans," said PlanetOut's Soukup.

Companies that work to be gay-friendly have experienced some backlash, but it has come mostly in the form of bad publicity, rather than impact on the bottom line.

A conservative group called the American Family Association last year targeted Ford Motor Co. for a boycott because of its advertising in gay media and its internal policies recognizing same-sex couples. Ford drew criticism for initially meeting with the group, although it declined to change its policies under pressure. Most experts think the boycott had little or no impact. Ford's sales have been declining, but for reasons having little to do with the boycott.

"There has not been any evidence of success on the part of these conservative organizations to silence companies that are interested in the gay market," Wilke said. "Companies today recognize that they can't afford to lose any customers, so that means being sensitive to everyone but going after everyone they decide is relevant."

Jones of San Francisco Pride thinks companies that participate as sponsors get a double benefit.

"It is business with a heart and soul," she said. "You get your return on investment, but you also help to provide a space for people to come together and be their authentic selves. You've gotten your marketing bang for your buck but also you've made a difference in the community."

15 million - Gay, lesbian and bisexual adults in U.S. (6.8% of population)

$641 billion - Buying power of U.S. gays and lesbians in 2006

$42,700 - Per-capita buying power of U.S. gays and lesbians in 2006

$232 million - What U.S. companies spent on gay media and sponsorships in 2005

175 - Number of Fortune 500 brands that actively market to gay consumers