Editor's note: Curt Fedder is managing director of Chicago-based LGBT Research Insights.

Marketing and advertising to lesbian, gay, bisexual and transgender (LGBT) consumers continues to rise. An extremely desirable niche target for marketing organizations, LGBT purchasing power is estimated to be in excess of $835 billion, according to a 2013 American Marketing Association report. It’s critical that marketing organizations communicate with LGBT consumers in a manner that acknowledges their unique characteristics but also reflects effective marketing strategy and communications so that brands can create affinity and loyalty among this powerful segment.

Our firm, a Chicago-based market research consultancy, recently completed a qualitative research study with the objective of developing suggestions on how to create effective marketing communications with LGBT consumers.

Twenty LGBT consumers were exposed to a variety of LGBT ads in a series of in-depth interviews conducted in Chicago in July 2014. Through discussion, several elements were identified as being particularly effective when trying to engage, motivate and communicate with LGBT consumers.

There’s genuine excitement about the presence of LGBT ads. LGBT participants admire the fact that national brands are taking note of the role LGBT consumers play. Comments to this effect included:

“We buy their products … we use their brands … they should notice us!”

 “I feel good when seeing myself in ads … I’m a bit older and this never happened when I was first coming out. But now I see myself in a lot of places and it just feels good.”

“With all the negative attention gays tend to get, it’s nice to see us shown in everyday situations, like real people with jobs and responsibilities.”

Some brands were recognized as being longtime advertisers, while others were “new to the party.” LGBT consumers identified several advertisers who were more entrenched in the LGBT community because they showed interest and support long before others did. For the newer advertisers, being a relatively recent entrant was seen as neither good nor bad. The majority of participants are glad to see companies recognizing the importance of the LGBT community.

But, participants suggest that advertisers must show genuine interest and not appear opportunistic in any way. To avoid any hint of this, advertisers should do something to “give back to the community by sponsoring or supporting LGBT events” (particularly charity events), youth groups or community centers. A great example of this is a Wells Fargo ad related to the Gay, Lesbian and Straight Education Network’s (GLSEN) anti-bullying project. It uses the GLSEN endorsement to add credibility to the brand’s recent presence in the LGBT community while supporting an important initiative.

Ads in which LGBT content doesn’t overwhelm the brand story are highly effective. While LGBT consumers are excited to see LGBT advertising, LGBT content can overshadow the brand message. When asked about the intent of LGBT ads many felt the brands were trying to show “support for the community.” Compared to testing general-market advertising, the advertising message seems to be secondary and sometimes lost. Most participants react to the ad first and not to the brand message. Advertisers need to balance LGBT content and the brand message.

Ads that demonstrate a strong link between LGBT interests and the brand promise are motivating. AT&T was cited for successfully demonstrating a strong connection between LGBT interests and the AT&T brand message based on a series of print ads. Each ad, while focusing on different product benefits of the AT&T experience, depicts activities of high interest to the LGBT consumer: enhanced music listening, photo-taking, LGBT families and social-networking on AT&T Live Proud.

The situations depicted and the interaction between the characters support the product benefit in way that is realistic and natural. As one respondent commented, referring to the photo-oriented ad, “It seems like something I would do with my boyfriend. We’re always taking selfies and posting them on Facebook.”

Ads that are obviously unique to the LGBT community are highly appealing. LGBT consumers dislike ads in which it’s obvious that advertisers have substituted actors or copy used in general-market ads to make the ads “LGBT-friendly.” A Lexus ad was cited in which there was no evidence of it being an LGBT ad other than a subtle visual mention of the Human Rights Campaign. This is not as effective as an ad designed specifically for LGBT consumers.

Similarly, LGBT consumers dislike when images of gay men and women have been switched out in the same ad. This is not as effective as an ad designed specifically for each gender. For example, Allstate ran ads on subway platforms depicting gay couples walking down the street holding hands. While these ads were well-liked for many reasons, respondents objected when they realized the same image and copy was used with both a male and female version.

Ads that use LGBT, colors, imagery and symbols in unique and clever ways are engaging. LGBT consumers expressed extremely favorable opinions about ads that integrated LGBT colors (the rainbow flag), images (such as Dorothy’s red shoes from The Wizard of Oz) and symbols (such as a pink triangles or alpha and omega gender signs). LGBT consumers have an emotional bond with these colors, images and symbols. They are an integral part of LGBT identity and frequently used at gay pride rallies, in LGBT literature and to identify LGBT-friendly people and places. Ads for Stoli, Absolut, Miami Pride, Esurance and Hotel Nikko were cited as examples.

Ads depicting genuine emotional connections between LGBT people are greatly appreciated and potentially create strong affinity between the advertiser and LGBT consumers. The portrayal of positive, interpersonal connections between LGBT people is admired because so often the media is filled with negative stereotypical images. For years, LGBT activists have been trying to persuade the general population that their everyday concerns are the same as those of LGBT people. That LGBT people are portrayed this way is a step forward for the community. Brands portraying genuine emotional connections between LGBT consumers have the potential to build strong brand relationships with them. As is common in advertising, transference occurs between the positive associations conveyed in the ads to the brand being advertised. This is evident in recent ads for Marriott, AT&T and Subaru.

Depicting “real, everyday” LGBT consumers in realistic settings is highly appealing. LGBT consumers object to ads that use idealized versions of LGBT consumers as often seen in travel ads. These models were described as “perfectly dressed” and “extremely upscale.” Another concern expressed by a few is that many of the actors in LGBT ads are too young. This is also an issue in general-market advertising which is often criticized for being too youth-oriented. As one respondent commented, “These young guys can’t afford luxury cruises or hotels and yet that’s who they show. Seriously? I don’t see me in these ads!”

LGBT consumers are sensitive to how sexuality is portrayed. Ads that skillfully portray sexuality in a way that’s consistent with the brand message are effective. LGBT consumers prefer ads that depict multifaceted LGBT people, with sexuality being one component of who they are. That said, LGBT people often appreciate the clever ways in which some advertisers use sexuality in a playful way, with a wink to the viewer. Certain brands have permission to be more overt, depending on their general-market brand message.

Ads identified as striking the right balance were travel industry ads for Miami and Las Vegas as well as ads for Absolut Vodka. The portrayal in these ads is acceptable because the “wink” supports the general-market brand story. For example, the general-market tag line “What happens in Vegas stays in Vegas” has a hedonistic appeal – the brand essence is all about having fun. Ads for Las Vegas tourism and Luxor Hotel are consistent with that message through the use of imagery and tongue-in-cheek humor. So too, the Miami tourism ad typifies the Miami brand message. But by contrast, the tone of these ads would be inconsistent with the brand stories for Marriott, Hilton or AT&T.

Ads endorsed by LGBT organizations appear to be more credible. A few ads shown to research participants included endorsements from LGBT organizations Human Rights Campaign, GLADD, GLSEN and The Trevor Project. Endorsements demonstrate a longer-term commitment to LGBT issues, suggesting the advertiser is truly committed to the LGBT community and not just trying to make money by selling its products. As one respondent suggested, “They care about the community and aren’t doing it to make money or because it’s the popular thing to do right now.”

Participants have strong emotional connections with these organizations. They are well-recognized names in the LGBT community. Participants assume that advertisers have been fully vetted by the sponsoring organization, even though it’s assumed the advertiser pays for use of the endorsement. One respondent commented, “HRC is a stellar organization and they wouldn’t lend their name to just anyone.” A few participants were surprised they didn’t see more of this type of endorsement.

Sponsorships demonstrate long-term commitment to the LGBT community. In addition to endorsements, sponsorships emerged as a way for marketing organizations to build rapport with LGBT consumers due to the sponsorship’s potential to positively impact in the community. Organizations seen as benefiting from sponsorships included LGBT youth centers, community centers, advocacy groups and charities. Examples included Whole Foods sponsoring the Center on Halsted (a Chicago-area LGBT center) and a BP station in one of Chicago’s gay neighborhoods prominently hanging both a LGBT and HRC flag on its site.

Brand to emulate

Subaru emerged as the brand to emulate when developing LGBT advertising. Two Subaru ads were included in the portfolio of LGBT ads. They were consistently applauded by participants as being exemplary ads for depicting “real, everyday” LGBT consumers in realistic situations. Participants noted the clever use of LGBT symbols. Subaru’s ads demonstrate a connection between LGBT concerns and Subaru’s brand values, focusing on enjoying life, a love of driving and driving safely. The brand is also identified as a long-term supporter of the LGBT community. In describing what’s appealing about these ads, one respondent commented, “In my eyes they can do no wrong!”