At The End of the Rainbow: Corporate LGBTQ Marketing

Pride month offers corporations and brands an opportunity to repackage their image to suggest a rainbow of inclusivity. In 2020, as in previous years, hundreds of brands from Toms to ASOS draped their products with the pride flag and catchy slogans in a display of solidarity with the LGBTQ community. 

Recent years have seen the rise in for-profit Pride campaigns, from clothing companies like H&M and Macy’s to tech giants like Apple and Microsoft. As social and legal inclusion for openly LGBTQ persons in the U.S. slowly but surely improves, brands have started to openly market toward the once-niche community. Drawn in by promises of LGBTQ consumers’ massive purchasing power — estimated to be $3.7 trillion by Entrepreneur —  companies are now heavily marketing to the queer community, in hopes of capturing the now-infamous “rainbow dollar.”

In response to this year’s events, brands attempted to balance their messaging of unity and solidarity between two social justice causes: Black Lives Matter and Pride. However, messages of solidarity in the age of social media have given rise to a new wave of performative activism. Protestors rightfully called out the hypocrisy of the San Francisco 49er’s Black Lives Matter post, especially after the team shunned Colin Kaepernick due to the same visible support for the movement years earlier. Corporate sincerity has often included reactionary words without actionable follow-ups, a way for companies to acknowledge current events without jeopardizing profits or social media aesthetics. 

The actions of companies during Pride month should be regarded with the same skepticism. “Rainbow washing” is the act of outwardly supporting the LGBTQ community while upholding discriminatory practices, supporting homophobic and transphobic executives, and raking up LGBTQ communities without giving back to the very groups they are taking from. While bringing positive changes to the media and advertisement of LGBTQ narratives, corporations’ intentions are thrown into question, and rightfully so.

Rainbow Washing

Community Marketing and Insights, an LGBTQ marketing research firm, regularly reinforces aspects of affluence to their clients primarily through a focus on luxury spending. For over 25 years, CMI has scoped the purchasing power and consumption habits of LGBTQ consumers for major U.S. institutions, including Freddie Mac and Wells Fargo. They do this primarily by sampling a panel of LGBTQ community members they have built from Pride events and organizational partnerships. CMI’s front page boasts the “immense purchasing power” of the LGBTQ community which, by their metrics, is approaching $1 trillion.  CMI’s massive sum of total purchasing power, however, belies the economic day-to-day realities of LGBTQ households, who are in-fact less wealthy on average than het/cis peers.

In “Money, Myths, and Change”, Lee Badgett interrogates and ultimately debunks myths surrounding the LGBTQ community’s finances. Badgett explains that CMI and other marketing firms have over-emphasized the experience of urban, gay, white men in creating assumptions about the LGBTQ community as a whole. 

Badgett notes four key myths that have been perpetuated by marketers as a result:

  1. The myth of affluence: LGBTQ people occupy positions of power and influence that allow them greater access to wealth,
  2. The DINK (double income no kids) myth: Without pressures of childbearing, LGBTQ couples have more disposable income,
  3. The myth of protective invisibility: By hiding their sexuality, LGBTQ people can avoid social stigma, and
  4. The myth of conspicuous consumption: LGBTQ people are consumption-oriented, and thus perfect marketing targets for luxury goods.

Badgett also observes that marketing firms, like CMI, build their samples of LGBTQ people from events and from magazines, resulting in cherry-picking respondents with higher purchasing power: those that have the ability to participate in Pride events, and those with magazine subscriptions have higher disposable income than those who do not. And so, basing estimates of the LGBTQ community’s wealth on this distorted sample creates a false picture of the actual wealth of LGBTQ people. Whereas marketers repeatedly state that LGBTQ communities are more wealthy than their cis/het peers, they are in fact subject to a significant Wealth Gap.

To reach LGBTQ consumers, marketers emphasize the power of being “LGBTQ friendly.” In their 2019 Consumer Products Survey, CMI posed statements like “I’ll pay a little more for a product from an LGBTQ-friendly company vs. their competitor” (79% agreed) and “Today, most consumer brands are LGBTQ-friendly” (62% agreed). 

The determinants of “LGBTQ-friendly”, though, are ambiguous. Are consumers concerned with the internal policies and treatment of LGBTQ workers by corporations? Or are they simply concerned about community representation in a corporation’s marketing? What appears to be LGBTQ-friendly to one consumer could read as insufficient by another. 

It’s vital to remember that the “LGBTQ community” has never been and will never be homogenous. It is an umbrella for people of vastly different communities. LGBTQ people come from all different kinds of sexualities, genders, gender identities, races, ethnicities, classes, and backgrounds. And each individual’s experience and relationship to their identity as an LGBTQ person is different. 

But instead of looking at the entire community umbrella, brands generalize LGBTQ people’s habits, creating an “ideal” LGBTQ customer that would be willing to buy their product and market to them. And, as is clear with the sharp rise in brands including Pride on their June marketing agendas, their strategy is effective. Often relying on stereotypes and the debunked myths, corporations can utilize the most common denominators of the community (the Pride flag, rainbow colors) without honoring the rich distinctions that the LGBTQ community comprises.

Increased visibility has been helpful for LGBTQ people, but there is a dark underbelly to the glittery billboards and rainbow-plastered ads: Rainbow washing has negative repercussions for LGBTQ finances and health, the benefits to the community are negligible and the metrics are ineffective, and rainbow washing does not directly tackle the ongoing rampant discrimination still faced by LGBTQ people today. 

Rainbow washing has negative repercussions for LGBTQ finances and health, the benefits to the community are negligible and the metrics are ineffective, and rainbow washing does not directly tackle the ongoing rampant discrimination still faced by LGBTQ people today. 

Oliver McNeil

Alongside this increasing visibility and normalization of queer identity is a decline in wealth and discrimination gaps for LGBTQ people. While fights for social justice have been rewarding to some in the LGBTQ community, these discriminatory gaps are still prevalent. Companies are able to shroud these gaps in inclusive campaigns that don’t allow the gaps to be visible, making them more difficult to address. According to Badgett, LGBTQ workers systematically earn less than their straight peers. They are also less likely to own financial assets or homes. A report from the Williams Institute in 2019 found that 1-in-5 LGBTQ people lived in poverty compared to 1-in-10 of their cis/het peers. There is also a vast underreporting of discrimination due to the underrepresentation of sexuality and gender identity in survey data and national databases such as the US Census.

Taste the Rainbow (and Toxins)

The glamorization of substances like cigarettes and alcohol, and even the creation of new brands to target the gay market, creates a false sense of security for the LGBTQ community and circulates a message of “acceptance” by the very corporations that profit from substance abuse. The first brands to begin to capture the “gay dollar” were alcohol and cigarette companies. In 1979, Absolut ran the first vodka ad catering to the gay community in The Advocate, a gay magazine. Cigarette companies followed suit; in 2000, a document originating from the cigarette giant behind Camel and Newport brands showed an initiative to target young gay men in San Francisco. 

The campaigns that followed outlined the wonders of “the freedom to inhale” and “love wins” as tobacco dependence and alcoholism soared in the LGBTQ community. Both tobacco use and alcohol consumption are seen as “normal” parts of LGBTQ life while leading to fatal side effects for the lives of many. Nearly 45% of LGB people ages 18 to 28 reported binge drinking within the past month, and 20% of LGB people smoke compared to 15% of their straight peers. The marketing of toxic products, i.e. products with difficult-to-perceive risks to the consumer, to the community, coupled with the minority stress experienced living as an LGBTQ person, puts individuals at higher risk of cancer and other health complications. 

The marketing of toxic products, i.e. products with difficult-to-perceive risks to the consumer, to the community, coupled with the minority stress experienced living as an LGBTQ person, puts individuals at higher risk of cancer and other health complications. 

Oliver McNeil

In addition, the beneficial effects of purported inclusivity remain unrealized. LGBTQ people continue to feel the sting of social and economic exclusion and isolation: LGBTQ people are 2 to 3 times more likely to attempt suicide, twice as likely to be homeless, and are nearly three times as likely to experience depression and anxiety than their straight counterparts. They are also less likely to have health insurance, which compounds all of these problems into a community-wide obstacle.

Follow the Money

Despite the promises of inclusivity and commitment to the LGBTQ equality movement, the actions of corporations do not reflect that commitment to progress. Instead of supporting LGBTQ communities unequivocally, corporations strategically position themselves to appear LGBTQ-friendly in June, even though their actions during the remaining 11 may be opposed to the ideals of social justice.

Corporations have used a Pride month profile photo or campaign to cover for the behind-the-scenes realities of their international workforce. Primark, a UK-based clothing company, confirmed that their 2019 Pride collection was manufactured in China, Turkey, and Myanmar, all of which have either passively ignored calls for LGBTQ inclusion or actively suppressed the voices doing so. 

Even when corporations espouse a commitment to equality and have workplace policies in place to protect against mistreatment, their philanthropic priorities frequently do not match their stated commitment.

Oliver McNeil

Even when corporations espouse a commitment to equality and have workplace policies in place to protect against mistreatment, their philanthropic priorities frequently do not match their stated commitment. In 2019, Reboot looked at 122 companies that visibly supported the LGBTQ community during Pride Month. They found that only 64% of these companies donated to LGBTQ organizations. The remaining 36% of organizations are prime examples of rainbow-washing by marketers: i.e., those companies that don’t circulate money back to the community that they reap profits from. 

The Human Rights Campaign released their 2020 Corporate Equality Index (CEI), that supposedly measures “corporate social responsibility” and the extent of workplace non-discrimination policies. But, many corporations who score perfectly on the Corporate Equality Index continue to deprive LGBTQ consumers of equal access to their products and also continue to donate heavily to anti-equality groups and candidates. 

Gilead Sciences, a perfect scorer, has failed to adequately provide life-saving HIV preventative medication to the most at-risk communities, continuing to tag their prophylactic drugs Truvada and Descovy with a monthly price tag of $2000. AT&T scored a perfect 100 in 2019 and 2020 despite donating over $1 million to GOP state and national PACs in 2019 and continuing with tens of thousands of dollars in donations to Republican candidates in 2020. The Blackstone Group, a private investment company, also scored 100 for the second year in a row, despite donating over $10 million to the Republican Senate Leadership Fund in 2020 alone. 

These examples underscore the inefficacy of the CEI and current measures of corporate responsibility and enable companies to get undeserved credit for allyship when their actions harm LGBTQ people domestically and abroad. 

At the End of the Rainbow

As LGBTQ communities are welcomed into the marketplace, marketers have tried to lure LGBTQ customers without alienating mainstream consumers. The Hallmark Channel realized this the hard way last December, after facing backlash for the removal of same-sex marriage commercials from their syndication. The quest to appeal to the LGBTQ community, though, isn’t as easy as throwing around slogans or commercials; it must be backed up with tangible action to appease a community that has for so long faced intolerance. LGBTQ people deserve brands that are genuine and honest in their messaging; not just those that tweak their marketing for thirty days and don’t change their company practices for the better during the remaining 335.

Campaigns for the dollars of LGBTQ people may rake in money, but the additional margins on Pride merchandise aren’t always given back to the community, and it shouldn’t take the continued promise of brand-loyalty of LGBTQ customers to entice brands to donate to pro-equality causes. 

If brands acknowledge and address the moral hazard they face with Pride marketing, then the actions taken in the name of Pride will ring as more genuine, and the community can justify supporting a corporation that puts their money, time, and effort where their ad campaigns are. 

The grim state of rainbow washing certainly does not promise that the future will remain as cloudy. If these past few months have taught us anything, the voice of the people is the strongest instrument when fighting for change. 

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