Hallmark Channel Controversy Highlights Growing Economic Importance Of LGBTQ Audience

BY ADAM GROSSMAN

The holiday season is typically the most wonderful time of the year for the Hallmark Channel (at least when it comes to its ratings). This year, however, the company is facing fallout from its controversial decision to stop airing ads from wedding-planning company Zola that include a lesbian couple kissing at a wedding ceremony. In response to the criticism, the Hallmark Channel reversed its decision and will “reinstate” the ads.

Regardless of one’s stance on same-sex marriage or lesbian, gay, transgender, bisexual, or queer (LGBTQ) issues, Hallmark’s decision was arguably even worse from an economic perspective than it was from a public relations (PR) perspective. More specifically, LGBTQ is often both a lucrative and underserved demographic that many companies are increasing looking to target.    

In The Sports Strategist: Developing Leaders For A High-Performance Industry, my co-authors and I explore this topic in the “Infusing Ethics into Decision-Making” chapter of our book. At the time, the buying power of the LGBTQ community was estimated to be $790 billion. More recent research has shown that that figure has increased to closer to $1 trillion. This is particularly important when it comes to sports and partnerships. More specifically, my co-authors and I highlighted research that “finds that adult gay and lesbians were more likely to attend pro sports events, play sports, go online for sports news and videos, and play fantasy sports” than the “average adult” in the analysis.

We used B6A’s Audience Inference Platform (AIP) to further delve into the LGBTQ sports audience. AIP using natural language processing (NLP) to analyze what the followers of a certain account on Twitter say to determine their demographic and psychographic profiles using a statistically rigorous approach B6A developed. This builds on research that demonstrated a strong and statistically significant correlation between a company’s corporate website and Twitter audiences.

We analyzed the audience of Outsports as a representative sample of the sports LGBTQ audience for this post. The SB Nation site describes itself in this way: “LGBTQ athletes, fans and allies: we have the latest sports news impacting our community, plus the coming out and being out stories you won't see anywhere.” The results of our demographic analysis are in the table below.

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The AIP results demonstrate another reason why LGBTQ audience is potentially so valuable to companies. More specifically, it is a high income, highly educated audience that has significant buying power. It is also an audience that marketing executives have thought be “ignoring” in the past. Companies such as Zola and influencers such as Ellen DeGeneres show that is starting to change.

The sports LGBTQ audience is also interested in topics that would be attractive to both existing and new sports sponsorship partners. For psychographic analysis, AIP analyses conversation to determine which topics and terms more frequently appear in a specific audience’s conversation as compared to conversation in the general population. The following topics emerged in order of importance for the Outsports audience:

  1. Technology

  2. Politics

  3. Men’s Health

  4. Food & Beverage

Technology and Food & Beverage companies have long be sports partnership staples. However, AIP shows that there are new opportunities for these companies to target the LGBTQ audience using sports sponsorship. Not only are LGBTQ audiences more likely to be sports fans but they are more likely to be interested in the products these companies sell and fit the demographic profile of their target customer base.

In addition, sports properties can take advantage of the AIP analysis to target new advertising and sponsorship as well. From both a political perspective, both Democrats and Republicans are looking to potentially engage the LGBTQ voters during the 2020 election even though this audience typically votes for Democrats because of their interest in politics. In The Sports Strategist, we should how sports organizations have partnered with political entities and also how government organizations have used sports as a way to highlight specific initiatives in the past.

Men’s health and grooming is also an increasing growing category for sports sponsorship. For example, men’s health company Roman recently signed a multi-year agreement to become an official partner of Major League Baseball (MLB) in 2019. Last week, men’s grooming and hygiene company multiple “brand integrations” at the UFC 245 event. Sports properties look to target more of these companies by showing how a partnership can help them more likely engage with an audience that will drive revenue growth.

A frequent question we receive from partners, properties, and agencies is what opportunities are my company missing to increase revenue growth through sponsorship. Our AIP analysis and industry research demonstrates that LGTBQ partnerships are a clear answer to this question.