My post about De Beers cutting its U.S. marketing, and JWT’s diamond account losing 11 employees, has gotten some interesting reactions.
Most emailers see it as a pretty serious blow to the American market. With the U.S. jewelry market not likely to grow much over the next year, they think De Beers now wants to spend its money in growing economies, like India and China, with greater upside potential. And, of course, De Beers can introduce the Forevermark in China and India. It can’t (so far) do that here.
Still the American market is important enough that cutbacks always seemed unthinkable. It’s almost as if we are seeing the beginning of the end of the era when America unquestionably ruled the diamond market.
Keep in mind, even with this reduction, De Beers is still spending lots of money in the U.S. But it will now spend that money where it is most cost-effective – in targeting men (as opposed to women), in fourth quarter advertising (as opposed to year-round), and in public relations (the Diamond Information Center didn’t lose anyone in the cutbacks.) Which isn’t to say that advertising to females, or year-round, is wrong – it’s just that, in lean times, JWT has to be more selective. (Strangely, though, the DTC plans to keep advertising its female-targeted right hand ring.) And things like trade outreach (the DPS) seem to be relics of the past.
The big question is what will happen to the “beacons,” the DTC-introduced products (right hand ring, Journey) that have driven the market. DTC spokeswoman Lynette Gould told me:
Beacon products will be supported differently in 2008; they feature in advertising but not as the primary message. We believe the Beacon stories are well entrenched particularly with the female audience, but that in tough economic times, the man needs a more direct ‘call to action’ message to counter any inertia which could well be the barrier to actual purchase.
Well, some “beacons” certainly are well known. But “Journey” is not even a two-year-old campaign. And, suffice it to say, introducing new “beacons” doesn’t seem to be on the drawing board.
All of which brings me to the Forevermark, where most of my correspondents seem to think De Beers plans to throw its marketing weight. Certainly past public statements indicate that. Here is what DTC managing director Varda Shine said just last week:
The Forevermark will become a universal brand … the definitive point of reference in the industry and in the minds of consumers.
Now I’ve had reservations about the Forevermark. So far it’s had some success in China and Hong Kong, but those are very brand-receptive areas. Will middle class Americans pay a premium for diamonds with a microscopic etching they can’t see? What value does the Forevermark add, that, say, a lab report doesn’t? These are questions that haven’t been answered. Before the Forevermark is slated to be a “universal brand,” shouldn’t it be tested in a bigger section of the universe?
The Forevermark has potential, but the “beacons” and generic advertising have a proven record in the U.S., and the Forevermark does not. I am reminded of the book “Good to Great,” whose author, Jim Collins, spoke at the AGS Conclave last year. He said companies that go from “good to great” implement change through “an organic evolutionary process.”
But companies that change for the worse (on what he calls the “doom loop”):
Implement big programs, radical change efforts, dramatic revolutions, chronic restructuring – always looking for a miracle movement or new savior.
No one can blame De Beers for looking at the big picture. But sometimes I think things might be better for all concerned if it simply slowed down.