Remember, in June, when I told you jewelry industry friends about my young industry friend who shared a last-minute cigarette outside with Philippe Mellier, De Beers Group CEO, just before the Jewelers for Children Gala in Las Vegas? She didn’t know to whom she was speaking, and he only told her he “worked for De Beers.”
She proceeded to read him the riot act about how De Beers’ lack of generic advertising had tanked diamond sales in the U.S.! She only realized who he was LATER—when he got up to accept his award as the dinner’s honoree…
Mellier seems to have gotten the message, whether from his smoking buddy or otherwise. It’s no secret that De Beers’ abandonment of generic advertising has left a huge hole in our industry. While it has tried to fill it with a variety of schemes—from Supplier of Choice to the Forevermark—none have equaled its past campaigns in reach or effectiveness.
Given how much the market needs an adrenaline boost, De Beers’ plan for a category-driving campaign this holiday—which will come on top of its planned advertising for Forevermark—is both unexpected and welcome. (De Beers’ last true category-driving campaign seems to have been 2008’s “Fewer, better things,” launched following the financial crisis.)
As even its architects admit, this hastily assembled effort is not strictly generic; current mock-ups include a small but noticeable “Happy holidays from Forevermark.” It’s an odd hybrid, which De Beers executives have struggled to classify. Sales head Paul Rowley dubbed it “sort of generic.” Spokesperson David Johnson stressed it was “not category marketing in the traditional sense.” I call it generic with an asterisk.
Generally, though, the new campaign harks back to the old days. Its template is the “Seize the Day” call-to-action campaigns De Beers ran every holiday. Its longtime ad agency, JWT, which crafted the original ads, is doing this one. Even the PR patter is the same. This week, Forevermark vice president of marketing Colby Shergalis told me: “We are going to be surrounding consumers this season.” In 2003, a JWT spokesperson said much the same: “We want to surround the male consumer.”
Of course, De Beers really could surround the customer back then, when it spent $200 million annually on diamond promotion. Today, Rowley says the combined annual budget of the two campaigns (Forevermark and the category-driving) will equal around half that: $100 million.
Alert readers will note that De Beers executives—including its CEO and CFO—have previously said that the company spends $100 million annually marketing on the Forevermark. That number, it turns out, also contains an asterisk. “The overall Forevemark business unit costs are marketing costs as that is the focus of that business unit and what it does,” says Johnson. “But not all of that money goes on pure, consumer-facing marketing activities. The $100 million we are talking about [now] represents our total, full-year 2015 spend on all of our various pure, consumer-facing marketing/promotional activities.”
Despite all these provisos, this campaign is clearly a positive development, if one we shouldn’t expect to continue. As De Beers executives have said many times, now that the company sells only about 40 percent of the world’s rough, it shouldn’t shoulder the advertising burden for the entire industry. It has a point.
If the new campaign proves successful, Rowley suggests the newly formed Diamond Producers Association (DPA) might pick it up. But there have been many mixed signals of what DPA will do, given its limited budget—although, just today, Alrosa president Andrey Zharkov called for it to become involved in generic promotion. In any case, we can’t expect it to match De Beers’ past $200 million ad spend.
Which raises the biggest problem: Money. Past attempts at generic marketing have fallen apart when participants grasp the costs: To reach American consumers effectively, you must pony up tens of millions. Regardless, the fact that De Beers is doing category advertising, some 15 years after it shed the mantle of industry guardian, shows that a need for it remains. Indian dealer Hemant Shah recently gave a talk where he suggested that every company contribute 1 percent of sales to a general fund. That’s a solid idea. The DPA looks promising, but we can’t keep expecting only producers to promote the product.
Eventually, the current crisis will end, but dropping demand for diamonds looks like a longer-term problem. Hopefully, this tough period will spark some smart collective action and fresh thinking from our trade. As Rowley told me, it’s not just consumers who need to “seize the day.”