When it comes to planning for marketing budgets, companies would be wise to consider setting aside a significant portion for the LGBT market.
A recent market analysis released by Witeck-Combs Communications and Packaged Facts indicates that the total buying power of the LGBT adult population in America is estimated to be $743 billion for 2010.
Up from $732 billion in 2009, the LGBT buying power for 2010 suggests that the LGBT market is growing—something that companies should keep in mind when looking at how to market their products to the American people.
"We have always said the LGBT marketplace is a vital business opportunity for companies that understand the importance of diversifying their marketing dollars," said Justin Nelson, president and founder of the National Gay & Lesbian Chamber of Commerce® (NGLCC). "I'm pleased to see the growth in buying power even as we come off one of the worst economic periods in recent history. I think it truly shows the economic clout of the LGBT community."
Despite the substantial estimate of LGBT buying power, Bob Witeck, CEO of Witeck-Combs Communications, noted that it does not necessarily mean that same-sex households are wealthier than others. In fact, research shows quite the opposite.
"Buying power is not the same as affluence or wealth," Witeck said. "No one should infer that same-sex households are more affluent than others—this is little more than a stereotype considering the economic evidence available. We have seen research from academic researchers that strongly suggests gay men may earn slightly less than their heterosexual counterparts."
According to a press release from Witeck-Combs Communications, the analysis follows standard methods of projecting purchasing power of other consumer groups, such as Hispanics and African Americans.
But because the analysis only covers self-identified LGBT adults aged 18 and older, the numbers projected for LGBT buying power may be even more significant, as market studies of ethnic minorities include consumers of all ages. This analysis estimated that between 15 and 16 million adult Americans—6 to 7 percent of the total U.S. population—identified themselves as lesbian, gay, bisexual or transgender.
In the analysis, "buying power" is being used as "another term for ‘disposable personal income,' which is the total after-tax income available to an individual to spend on personal consumption, personal interest payments or savings," according to Don Montuori of Packaged Fact. He added that economists believe this equals about 86 percent of income today.
For more information about the analysis, download the press release here.
