New UK laws will require companies to understand and meet the needs of Britain’s 3 million gay and lesbian customers who now account for more than £70 billion pounds in earnings each year, according to research.
A study between Australia and the US revealed today that UK companies risk falling behind overseas counterparts in marketing to lesbian and gay consumers.
Australian and US companies spend around four times as much as British business, and reap far more benefits as a result of more effective gay marketing expertise, according to Out Now Consulting, a company which investigates gay consumer behaviour.
Research results from the US reveal that in 2005, more than USD$212 million was spent by corporate America advertising to gay consumers, a figure that dwarfs British expenditure.
The group’s managing director, Ian Johnson, said “British business, even on a relative population basis, is spending at less than a quarter of that rate, and is currently missing out on significant profits as a result.
“While corporate Britain is still just dipping its toes in the water, US and Australian brands have already got their gear off, jumped right in and have come out safely on the other side – complete with their share of the market and increased profits,” Mr Johnson said .
“With very few exceptions UK brands are missing out on significant profits due to being poorly served by their existing marketing agencies, as they fail to keep pace with this global market trend,” he added.
New laws also mean that from October 2006 UK companies must ensure they do not discriminate against people on the basis of sexual orientation in the provision of goods and services, as well as in their advertising.
According to Whitehall, gays and lesbians make up around six percent of the total UK population and Mr Johnson says brands must utilise better targeted gay marketing to reap increased profit opportunities in a gay market now valued annually at more than £70 billion earnings.
Australian research findings show the large brand loyalty potentially on offer to UK brands, with three out of four Australian gay consumers favouring brands that they see targeting them effectively.
Mr Johnson cautioned though that a lot of what companies see as ‘targeting’ gay customers is often wasted money. “Effective campaigns that hit the mark can significantly benefit the brand. The key word though is ‘effective’,” he added.
“British brands risk falling far behind the US which has seen leading brands across all sectors including finance, travel and automotive actively develop gay marketing strategies to increase their brand’s market share,” Mr Johnson said.
“This combined with the new UK laws, means that British business must now learn about creating and selling relevant products to the gay consumer.”
These issues will be discussed at the Pink Pound Conference next month, organiser, Jean Collingwood, said: “One thing everyone agrees is that stereotypes, insults and badly executed marketing has had its day and needs to improve in the UK. British business clearly must learn how to understand this group of UK customers effectively.”