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United's sponsorship of the Apr. 30 demonstration -- a six-figure swap of cash and discounted tickets for ad space and publicity -- represents a second coming out for the world's biggest airline. As far back as the mid-1990s, United was packaging vacations for gay travelers. It was an early advertiser in gay media. And it has been a prominent gay-events supporter, underwriting San Francisco's biggest annual AIDS fund-raiser, for instance, for the past four years. The outreach program is about more than politically correct posturing: The real motive is money. As United knows, gays are one of the most affluent and free-spending minorities in the nation. Market research shows that, as with members of other demographic subsets, gay men and women are loyal to companies that appeal specifically to them -- especially if advertisers back up their pitches with sympathetic personnel policies. "We support those who support us," notes Charles Zukow, a principal of Browne Zukow Associates, a marketing shop in San Francisco. RICHES IN DIVERSITY. But UAL Corp. has some lost ground to cover. It squandered much of its goodwill by picking a fight with San Francisco over an ordinance mandating benefits for same-sex partners of employees of city contractors. The airline's relations with the gay community probably hit their low point at a concert by the San Francisco Gay Men's Chorus a year ago. Addressing the audience, the troupe's director rebuked United for refusing to extend domestic partnership benefits to gay employees and symbolically handed back United's $15,000 sponsorship check. The chorus then signed up with American Airlines. Now, United is trying to make up with the gay and lesbian community. After 26 months in court -- and a boycott that sent business to archrival American -- the company caved in last year and is extending benefits to domestic partners of UAL employees and retirees worldwide. Open enrollment started in May. Next up: a niche-market ad campaign in June, including print ads tailored to gays and promotions with other gay events and groups. "The more United is visible in the gay community, the quicker the past will fade," predicts Joseph Oshinski, acting executive director of United with Pride, the airline's gay-employees group. The outreach program is about more than salving hurt feelings or politically correct posturing; the real motive is money.
BOTH SIDES OF THE FENCE. Yet despite the promise of niche marketing, there's an unanswered question for United: Will its gay-audience ads and tie-ins and more welcoming personnel policy help fill the airline's seats? Not necessarily. Though the airline has promised to stick with its new employee-benefits package no matter what, United and Pat Robertson's American Center for Law & Justice are still trying to get San Francisco's workplace ordinance tossed out in appeals court. If the law is overturned, United could be right back on the gay community's blacklist. By being so public in wooing gays, the carrier also risks a backlash from the religious right, though United has been able to brush off earlier objections from Christian fundamentalists without consequence. To sense the conflict United feels, consider the events of May 18. Bowing to heat from gay organizations, United declared it would no longer accept ads in its in-flight magazine for radio personality Dr. Laura Schlessinger, who has made disparaging remarks about gays. Meanwhile, at UAL's annual meeting, Chairman and CEO James E. Goodwin was scolded by shareholder Mac Gregory for giving benefits to homosexual couples and "insulting" married fliers. United faces one other problem: Many of the estimated 10 million to 16 million gay and lesbian adults in the U.S. already are spoken for by American Airlines, which was the first airline to court them in a coordinated way. "It's a wonderful compliment that another airline is trying to match what we're doing," sniffs Rick Cirillo, who heads a four-person staff at American assigned full-time to gay and lesbian marketing and sales. Noting that American parent AMR Corp. rolled out benefits to same-sex partners of employees a full month before United, Cirillo warns that his airline won't cede any advantage without a battle. "This is my baby," he declares. RAINBOW POWER. Still, United is smart to give American a run for its money. Gay men and women have more buying power than any other minority group except African Americans, according to a widely cited analysis by M.V. Lee Badgett, an economist at the University of Massachusetts at Amherst and acting executive director of the Institute for Gay & Lesbian Strategic Studies. And because they have fewer children, gays generally can afford to spend more on luxuries, such as leisure travel. Indeed, travel expenditure by gays is put at $17 billion a year, or nearly as much as United takes in annually in worldwide revenue. American Airlines attributes $193.5 million of its 1999 sales to the gay community alone, based on bookings by travel-agent members of the International Gay & Lesbian Travel Assn. While that represents only 1% of American's revenue last year, the sum is up almost tenfold from $20 million in 1994, when Cirillo formed American's so-called Rainbow Team. Moreover, while United was busy with damage control in San Francisco, other airlines were discovering the gay market. Stealing a selling point from both United and American, almost every major carrier now bars discrimination because of sexual orientation. Like United and American, Northwest Airlines, Virgin Atlantic, and US Airways also have announced plans to offer benefits to domestic partners of employees. US Airways is copying American further by putting together a marketing team catering specifically to gays. PEACE DIVIDENDS. Even Delta Air Lines -- considered one of the industry's most old-fashioned members, given its Southern heritage -- offers discounts to gay groups traveling to conventions. "The thing that's so exciting about gay events today is that they're seen as an opportunity for business," says Dianne Hardy Garcia, executive director of the Millennium March. "We're seen as the assets we are." Though beaten to the gay market by American, United is ranked as one of the leading spenders on marketing to gays and lesbians. United's effort began in 1998, when it pulled together 20 employees from across the company and formed a steering committee at its suburban Chicago headquarters to oversee sales to four minority groups: African Americans, Hispanics, Asians, and gays. Even before formalizing its niche-market efforts, United was giving tickets to organizers of San Francisco's biggest AIDS fund-raiser for their annual auction and was the first airline to advertise in The Advocate, a magazine with a gay focus. In another first, United sponsored a Webcast by President Clinton on PlanetOut.com in 1997. Today, as United distributes new benefit forms to employees, the company is hoping to reap peace dividends. Mario Baldessari, United's co-director of gay and lesbian marketing, won't say how much the airline is spending on gay promotions and alternative media. But by itself, PlanetOut.com is getting nearly $1 million this year in United advertising, says Megan Smith, chief executive of PlanetOut Corp. And her company is just one recipient. United plans to begin a new ad campaign in gay print media in June, and Baldessari says he is negotiating sponsorships with more than three dozen gay organizations. Among them: the San Francisco Gay Men's Chorus, which plans to announce in June that it will perform under United's corporate patronage again. Given their rocky history, that's really singing the airline's praises. By Michael Arndt in Chicago EDITED BY BETH BELTON |
