Diamond Industry Gets Its Groove Back As Advertising Spending RisesAugust 31, 17
After years of efforts to bring the industry together to create much-needed generic diamond marketing campaigns, trade organizations and companies have recently shown that they are willing to do so. This week, De Beers announced it will invest more than $140 million in marketing this year – its biggest annual spend since 2008.
That was the year when the miner decided, after years of spending an estimated $200 million annually on such efforts, that it would no longer unilaterally finance the industry's generic marketing campaigns. As its share of the global rough market fell due to increasing interest by governmental bodies in investigating anti-competition and monopoly issues, the miner decided there was no reason for it to continue to single-handedly foot the bill.
That led to the initial efforts by the larger mining firms to come together to create a body that would take over from De Beers. However, they foundered and the companies were unable to reach agreement on how to take the idea forward. It wasn't until May 2015 that the Diamond Producers Association (DPA) was established by seven leading diamond mining firms.
Setting out with a budget of $6 million, the DPA recently boosted that figure considerably as it understood that without a significant budget it would not succeed in having an impact. As a result, its annual budget was boosted to $57 million.
Then, this week, De Beers announced its increased investment in promotional work focused on generating further consumer demand for diamond jewelry in the leading markets globally. The majority of the money will be used to target the three leading markets: the US, China and India.
Setting the background to the decision, Stephen Lussier, De Beers Group’s Executive Vice President of Marketing and CEO of Forevermark, said: “Total consumer expenditure on diamond jewelry for the last five years collectively has been the highest on record – and the outlook is positive. However, we cannot take future growth for granted. “Increasing our spend from a strong position will help support continued demand in both mature and developing markets, particularly among millennials, who are already the largest group of diamond consumers despite this generation not having yet reached its maximum earning potential.”
De Beers makes no bones about the fact that most of the investment will support its own brands, Forevermark and De Beers Diamond Jewellers stores, however it will also increase its spend on partnership marketing, including with the Diamond Producers Association and the Gem and Jewellery Export Promotion Council of India.
It would have been helpful to know how much of the $140 million will be going to marketing efforts other than on Forevermark and De Beers Diamond Jewellers. Nonetheless, as World Federation of Diamond Bourses President Ernie Blom said in a statement, all advertising is good for the wider diamond trade since it has a positive ripple effect.