Diamond makers, De beers, Rio look to strengthen advertising to pitch gems to the young

“A Diamond is Forever,“ voted the best slogan of the 20th century by Advertising Age, helped De Beers convince people for almost 70 years that it's worth parting with two months' salary for a gem. Yet the end of its monopoly a decade ago blunted its role as the industry's marketing edge.

Challenged by Michael Kors handbags, iPads and vintage Bordeaux, gem producers including De Beers, Rio Tinto Group and Russia's OAO Alrosa last month formed the Diamond Producers Association to ensure a new generation views the jewels as the ultimate luxury and expression of romance. At stake is the future of the $80 billion diamond market as other luxury goods, especially in the US, show faster growth.

“Millennials are no less interested in love than the generation before, but we need to make sure they continue to see diamonds as the expression of that,“ said Stephen Lussier, head of marketing at De Beers.“We don't want to look back five years from now and say we have a problem.“

Demand for diamonds in the US, the biggest market, is under pressure as consumers' appetite for other products is growing faster. From 2004 to 2013, the luxury electronics sector registered annual growth of almost 14 per cent, while fine wines and champagnes increased 11 per cent. Demand for luxury jewelry rose just 1.9 per cent, trailing high-end beauty products, tobacco and watches over that period.

TARGETING MILLENNIALS

The association will target its three-year $18 million budget at advertising to a younger demographic known as millennials or generation Y, said Lussier, who expects the funds to “significantly“ increase as more industry players contribute. Once the association is established, it will hunt for an agency to front the campaign, he said.

Producers such as De Beers, Rio and Dominion Diamond Corp. have fought for market share by branding their own stones, rather than promoting the established cultural imperative for diamonds built up over three generations. For De Beers the vehicle was “Forevermark,“ and the company will relaunch the “A diamond is forever“ tagline to promote its jewels this Christmas, Lussier said.

Still, when De Beers cut its marketing budget by half to about $100 million a year through the 2000s, that left a void that has threatened to undermine the appeal of diamonds.