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Branching Out

Branching Out

October 8, 2007
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" There was a time when the gay online adult market wasn't nearly as competitive as it is now. "

In early 2007, Packaged Facts, a division of MarketResearch.com, and the Washington-based marketing / public relations firm Witeck-Combs Communications announced the results of a joint report on the buying power of what Witeck-Combs CEO Bob Witeck broadly defined as "America's diverse gay, lesbian, bisexual and transgender population."

According to the report, those communities had a collective buying power of more than $660 billion in the U.S. in 2006 (up from $610 billion for 2005), and Witeck-Combs predicted that the number would increase to more than $835 billion by 2011. For adult-oriented webmasters who are selling or hoping to sell content to gay men, those figures are encouraging. Clearly the gay market (which is separate from the lesbian and transgender markets) is an attractive one, and some adult webmasters who started out specializing in heterosexual-oriented erotica have successfully launched gay adult sites.

Gay Market Research
But wanting to tap into that gay buying power and actually doing so are two different things. While the gay market can be quite lucrative it also can be quite challenging — and adult webmasters who decide to expand into the gay market need to do their research and do it thoroughly.

"Someone who is entering the gay market for the first time is competing with people who already have a lot of experience in the gay market and know the gay market really well," said Harlan Yaffe, president of the gay-oriented Miami-based affiliate program PrideBucks. "There are plenty of quality gay sites out there and someone who is just now starting to explore the gay market has an awful lot of homework to do in order to be able to market what is current and fresh and not something that gay surfers have seen a million times before."

Yaffe compares an experienced adult webmaster who is just now entering the gay market to an experienced restaurateur who is opening a different type of restaurant than the one that put him/her on the map: The expansion can be done successfully, he advised, but only if one realizes that he/she is now selling to a new and different group of customers.

"Just because you have a successful Italian restaurant doesn't mean that you can just open a Chinese eatery without doing a lot of research and a lot of homework from A to Z," Yaffe said. "It's not enough just to concentrate your content on showing the male body; it's which male bodies and who you are trying to sell those bodies to. You can't go into the gay market on the cheap without doing your homework and assume that the same business model that worked for your straight sites will also work for your gay sites."

There was a time when the gay online adult market wasn't nearly as competitive as it is now. Back in the 1990s, gay websites — and the adult Internet in general, for that matter — were the Wild Wild West, and consumers of gay erotica were thrilled to be able to access explicit gay adult content so easily by merely turning on a home computer, getting online and having their credit card numbers handy. Overall, gay Internet surfers were less experienced with the web during the Bill Clinton years, but as Yaffe puts it, "Those days are long gone. You just can't throw up sites anymore and expect people to come. You fight for traffic and you are competing with a segment of the market that isn't growing by leaps and bounds like it was 10 years ago when they were thousands of new people getting on the Internet for the first time. Surfers are seasoned now. They know what is out there, and they know quality when they see it. Content that is old, non-exclusive and generic is not going to make money."

Yaffe added, however, that there is still plenty of money to be made in the gay online adult market if a company has a smart business model — and a company does not have to be focusing on gay content exclusively in order to have profitable gay adult sites, he said. Adult webmasters who only offered straight sites in the past could, in fact, increase their profits by adding gay sites, Yaffe said, but they have to be smart about it.

Quality Over Quantity
According to Yaffe, one mistake that some straight webmasters make when they decide to enter the gay adult market is assuming that they need to immediately add as many new gay sites as possible; starting out with a handful of high-quality gay sites is far preferable to starting out with 25 or 30 mediocre ones. But Yaffe said that unfortunately, some adult webmasters who are inexperienced in the gay market make the mistake of emphasizing quantity over quality.

"It is much smarter and much more profitable to have fewer sites, all of them with a high quality and with carefully chosen content," Yaffe said. "That is what is going to make you money in the gay market, not having volume for volume's sake."

The Los Angeles-based LatinCash is an example of an online adult company that has been reaching both heterosexual and gay audiences since the 1990s. LatinCash's specialty is Latino erotica, and that includes both straight and gay websites (one of their well-known gay sites, LatinBoys.com, debuted on the Internet in 1996). Gary Dginger, program manager for LatinCash, pointed to WEGCash, SilverCash and TopBucks as three examples of adult Internet companies that started out with non-gay content but have successfully expanded into the gay market. And Morgan Sommer, co-founder and advertising director for Cybersocket, a major player in the gay Internet field, considers TopBucks' expansion into gay erotica exemplary.

"I've seen a lot of companies start gay websites and make what I consider mistakes," Sommer said, "and I've seen other companies do it really, really well — companies that are not gay-specific companies but launched great gay websites. TopBucks' websites are consistently in our top 10 as affiliates. Originally, TopBucks did not have gay sites. They did not start out as a gay company, but they built great gay websites. Commercially, I would rank them among the best."

TopBucks has demonstrated that it is quite possible for a company to be a leader in both straight and gay Internet erotica. TopBucks never abandoned the heterosexual audience—the company still has an abundance of popular straight adult sites — but it has also acquired a strong gay following with a roster of thematic, carefully designed sites focusing on subjects ranging from interracial gay sex (GayInterracialXXX.com) to gay Asian men (GayAsianXXX.com) to gays in the military (GayMilitaryXXX.com). Sommer said that in TopBucks' case, quantity (the company now has around 27 gay sites) did not come at the expense of quality.

For adult webmasters who know their stuff, Sommer said, the gay market can be financially rewarding because the gay community generally has a pro-erotica outlook. "Gay men are more likely to part with money and buy porn because there is less perceived stigma to buying porn in the gay community — and generally they aren't going to have to worry about hiding it from a wife or a girlfriend or whatever," Sommer said. "Gay men tend to be pretty open about porn and are a porn-positive consumer group. The issue is: do you know how to get access to those consumers? Do you know how to get access to the actual consumers of the product?"

Learning Curve
Adult companies that have successfully branched out into the gay market did so by learning as much as possible about gay consumers and gay culture, Sommer said, adding that companies that don't understand gay audiences are more likely to put out sites that gay audiences find awkward and unappealing.

"One of the biggest mistakes I see is naming," Sommer said. "Companies will pick names that don't really relate to gay culture but are what people think that gay culture might be. There is no understanding of the culture or the audience; so one way or another, get acquainted with the audience and figure out what is actually considered attractive or interesting to the audience. Don't base sites on what you think gay people want to see — find out what gay people are actually looking at."

Yaffe noted that an adult company doesn't have to consist of only gay employees in order to reach gay consumers, but he does stress that "the straight companies that cross over to the gay market successfully are the ones that bring gay people into the creative and marketing process. They hire people who are much more tuned in and much more likely to choose content that is going to be of interest to gay men. You can't just take one of your straight sites, replace pictures of nude women with pictures of nude men and think you've got something; that is a big mistake.

"It's very obvious and transparent — not just to webmasters but to surfers in general — when a company has jumped on the gay bandwagon thinking that they are going to make some bucks the easy way. Perhaps they may have heard that gay sites convert better and think that they can just throw up some gay sites and have an instant empire without investing the time in researching the gay market and finding quality content. But a gay site isn't going to be viable if you don't research the market and understand what goes into quality content."

Sommer pointed out that even in amateur gay adult content, quality is important — and a company that is starting to explore amateur gay porn must understand that amateur doesn't have to mean sloppy or thoughtless.

A frequent mistake that LatinCash's Dginger has seen with adult companies that unsuccessfully tried to cross over to the gay market is "mislabeling." Dginger explained: "Labeling things incorrectly usually is a mistake made by new companies that get into the gay market. You want to make sure you label your category of sites the way they are. If you have older men on a site, it would be called mature daddies; if you have hairy men on a site, it would be called bears."

Mislabeling is not a problem with LatinCash's gay sites, Dginger said, because those sites deliver exactly what they promise: gay Latino men. The success that LatinCash's gay sites have enjoyed in the gay market, he said, demonstrates that adult companies don't have to offer gay sites exclusively in order to reach gay customers. Dginger echoed Yaffe and Sommer's assertions that there is no reason why companies that are known for straight adult sites cannot expand into the gay market as long as they make sure they do it well.

"I believe that if you think you can produce a great-selling gay site — even though you are not gay — go for it," Dginger said. "Give it a shot and do what you do best. You can make it happen as long as you provide the right content and make your members happy so they keep coming back. You don't need to be gay to get paid, you just need to keep your gay customers happy."


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