The De Beers Group today announced it will invest more than $140 million in marketing this year - its biggest spend since 2008, when the Group was spending an estimated $100 million annually. The increased investment will be focused on generating further consumer demand for diamond jewellery in the leading markets globally, with the greatest spend targeted in the US, China and India, the company states. They add that while the majority of the investment will support De Beers’ proprietary brands, Forevermark and De Beers Diamond Jewellers, the company will increase its spend on partnership marketing, including with the Diamond Producers Association and India’s Gem and Jewellery Export Promotion Council.
Stephen Lussier, De Beers Group’s Executive Vice President of Marketing and CEO of Forevermark, said: “Total consumer expenditure on diamond jewellery 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." He goes on to say that, “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.”
$200 million high
According to a 2016 report by DPI, "By the end of the 20th Century, De Beers’ annual consumer marketing budget hovered about the $200 million per annum. This included advertising in all international markets and public relations. In the industry it was referred to as generic product promotion, but effectively it was luxury branding, where the brand was a generic product. De Beers realized at the time that its share of the rough diamond market, which still stood above 80 percent, would be reduced dramatically, as other producers set up independent distribution systems. It thus announced that it would be phasing out its generic marketing program, and concentrating instead on selling its own goods. Then everything changed."
As DFI explains, a late 1990s study by Bain & Company concluded that it was no longer viable or in the mining company's interest to physically control other producers' supply of rough diamonds. Bain suggested that De Beers focus on marketing its own diamonds and become the “Supplier of Choice” for the downstream markets. "Then, in 2008, De Beers launched Forevermark, a range of high-quality diamonds inscribed with a microscopic logo and individual catalog number. It was a fully-fledged branding program that provided the company with not only with direct control over the final product, but also a share of the revenue derived from the sale of these stones all the way to the consumer. De Beers, consequently, remained in the diamond promotion business, but its new budget, which was is said to be $100 million a year, concentrated predominantly on Forevermark, and was only about half of where it stood 15 years earlier when it still indulged in generic promotion."
While at least partly shifting the responsibility for maintaining the 'diamond brand' from De Beers’ shoulders to the shoulders of its clients did result in an an increase of branded diamonds and jewelry, the investment in marketing and promotion never returned the levels that existed at the turn of the 21st Century. DPI concludes, "What remained after De Beers’ decision to relinquish its generic advertising budget was a well-developed brand – the diamond – but no structure budget to sustain and enhance its existence." Now De Beers, together with the coalition of diamond miners - the Diamond Producers Association - appears to be stepping up its game again.