"It's sort of like our little secret," says Tim Bennett, marketing-services manager at Subaru of America Inc., a unit of Fuji Heavy Industries Ltd. of Japan. "It's clever and not offensive, and if you're in the know, you chuckle."

Using coded messages, more mainstream companies in the US are targeting gay consumers. For one thing, it's hip to reach out to a market on its own wavelength. For another, encrypted ads allow advertisers tospeak to gay people in public places or through mainstream publications with less risk of backlash since the symbols or slogans are lost on many heterosexuals.In one Volkswagen spot, for example, two guys driving around in a VW pick up an old chair off the street. The chair symbolises the interest of many gay men in home decor, gay marketing expert say. When the driver wipes away a speck of dirt on the dashboard, they add, that's a reference to the obsessively neat stereotype. Volkswagen AG says it didn't intend for the men to be perceived as gay, but its ad agency, Arnold Communications, has said the men's sexual orientation was a "mystery."

In some cases ambiguous imagery and roundabout language show that companies remain skittish about overt appeals to gay consumers. While some coded ads are filtering into the mainstream media, the initial testing ground is often gay magazines, such as the Advocate and Out. They are drawing blue-chip advertisers such as International Business Machines Corp., AmericanExpress Co., Allstate Corp., Starbucks Corp., Waterford Wedgwood PLC and Levi Strauss & Co. Ad revenue for US gay publications jumped 20 per cent last year to $120.4 million, according to Mulryan/Nash, a New York gay-advertising firm.

"Marketing in the new millennium will be all about talking to specific consumer segments, including gays and lesbians," says Angelo Vassallo, a regional marketing director at Seagram Co., which began running ads with a gay theme for Chivas Regal scotch this year.

"It's no longer enough just to be in a gay publication," adds Andrew Isen, president of WinMark Concepts, a gay-marketing consultancy in Washington. "Now, gay consumers want to see ads that reflect their lives and culture." Recently, Isen spent four hours to "de-heterosexualise" a livingroom set used in an ad for Life Fitness exercise equipment. In the final shot, it was decorated with art books, candles, a framed photo of a muscular man, and a coverlet and clock in the rainbow colours of the gay community. The adshows a brawny man watching television and jogging on a treadmill, while another fellow sprawls on the couch reading Out magazine.

Marketing consultants say gay symbols resonate with gay consumers. There are pink triangles in ads for Coors Light and Borders bookstores, AIDS ribbons on men's underpants in a Benetton ad, a Rainbow Visa credit-card and a rainbow-coloured glass of Miller Lite beer.

Sly sexual references also play well to some gay consumers. Many gay men will get the double-entendre in a Bud Light beer ad showing a man carrying a six-pack and the words, "Nice package," printed over his jeans.Within gay publications, the ads form sort of an inside joke, marketing specialists say, and a bond between readers and advertisers. Naya Inc., for example, has played the insider role by using, but not identifying, New York drag queen Lady Bunny in its bottled-water ads. Most straight people would probably assume he was a she.

A Johnnie Walker Red Label Scotch ad touched a hot button with a picture ofthree attractive men and the line, "For the last time. It's not a lifestyle, it's a life." Most heterosexuals wouldn't understand the ad, but it tapped into the resentment many gay men and lesbians have for labels like "alternative lifestyle."

"An ad is successful when it hits people where they live," says Joan Garry, executive director of the Gay and Lesbian Alliance Against Defamation. Puns on gay-related words abound in advertising: "It's time your crystal came out of the closet as well" (Waterford); and "Come out, come out, wherever you are" (Kenneth Cole).

Some advertisers try to play it safe by using what marketing experts call "gay vague" ads, which leave a reader guessing: Is he or isn't he? A Chase Manhattan ad in gay magazines features two handsome young men shaking hands and promotes bank services for "unique individuals." some marketing specialists point to recent ads for Parliament Lights, a Philip Morris brand of cigarettes. In the version for mainstream magazines, a man and woman are shownin an exotic resort setting. For gay magazines, it might seem logical to switch to a same-sex couple. But instead, Philip Morris simply added a second man to the picture and kept the woman.

Philip Morris is afraid of the kind of backlash from conservative groups that AT&T, American Airlines, Anheuser-Busch and others have experienced with their gay marketing," says Paul Kowal, a marketing consultant in Boston.Philip Morris Cos. and Chase Manhattan Corp. wouldn't discuss their ads-or the topic at all. Anheuser-Busch Cos. would only issue a short statement about trying to reach "a diverse group of consumers."

Fashion company Dolce & Gabbana, which is running an ad with two young men cuddling and one kissing the other on a couch, says it isn't focusing on the gay market at all. Rather, says fashion director Justo Artigas, the ad is part of a campaign showing many types of couples.

Some companies are finding that straightforward ads using actual gay people are more successful than coded and ambiguous ones.Levi Strauss's Dockers brand received kudos from consumers and gay-advocacy groups for a 12-page insert in Out magazine saluting gay individuals.

IBM won raves from some gay people with one fairly direct but carefully scripted ad showing a male couple in Irvine, California, who run a photo-processing business. Over each of the men, the headline reads, "We're not your typical mom and pop operation" referring to a kind of small business that is typically family operated. The text adds, "We're not even your ordinary pop and pop operation."

E-mail messages streamed in to the computer company. IBM's ad "signaled a new beginning when real gay consumers that own a business and share their lives together could be the centrepiece of such a wonderful campaign," a gay man in Los Angeles wrote. "Our research found that the gay audience feels advertisers often talk down to them," says Maureen McGuire, vice-president of world-wide integrated marketing communications at IBM. "They want companies to communicate witha sense of fashion and not be heavy handed." (The Asian Wall Street Journal)