Diamond Marketing: Part 1
There’s a semi-amusing trend on Tik Tok in which a group of friends stand in a circle and each gets a chance to act out the phrase “just give me my money.”
They say it with some theatrical flair, and everyone enthusiastically cheers after each performance. That is, until the one who’s not in on the joke jumps in and their rendition is met with silence – an awkward moment which somehow (often) goes viral.
The routine has inspired hundreds of thousands of videos on Tik Tok, with celebrity actors, sport stars and musicians getting roped in. (Spoiler alert, it doesn’t get much funnier after the first mindless scroll).
But the trend seems to have reached the diamond industry, with far deeper consequences at stake as the Natural Diamond Council (NDC) has made an urgent appeal to fund its category-marketing efforts.
So far, the NDC’s plea to “Just Give Me My Money,” has not been met with the awkward silence that it has in the past. This time, everyone seems to agree that the industry needs to invest in marketing to boost demand.
“It has taken a bit of a crisis for people to understand that consumer demand is what drives the prosperity of the industry,” David Kellie, CEO of the NDC, says in an interview. “I don’t like to see any of the hardship that the industry is going through, but out of that has come an understanding that we have to drive consumer demand.”
The plea comes as the natural diamond market has endured a second consecutive year of sluggish sales due to competition from lab-grown diamonds, a slowdown in China and the higher cost of living that has reduced discretionary spending in the US. The industry has fallen to below its pre-Covid levels on most measures.
Restoring budget
The NDC has more significantly been hit by the geopolitical crisis. Russian miner Alrosa pulled its funding in early 2022 when it withdrew its membership over the war in Ukraine. Back then, the NDC’s annual budget amounted to around $100 million, of which Alrosa and De Beers together covered about 90% of the total.
The NDC’s budget for 2024 was a mere $35 million.
Kellie’s first target is to secure that initial budget of $100 million, which he believes will enable the organization to demonstrate that it can make an impact.
Then, what happens if we double the money? Can we double the prosperity, he challenges.
“First, there must be this critical mass that we believe can influence the market and that can turn around our fortunes,” he responds. “Then we can show to people that if we invest more, we will create more.”
Three-pronged approach
With the appropriate budget at his disposal, Kellie foresees three areas to its proposed better-funded campaigns. In fact, Kellie objects to the “somewhat archaic” idea of campaigns, as they imply one-off seasonal marketing blitzes.
“The industry loves campaigns, but the reality is that it’s actually about what you’re putting into content every day of the year,” he asserts. “That’s at least 300 campaigns plus one must consider that what works on TikTok doesn’t work on YouTube but may work on Instagram. It’s all very nuanced.”
The first tactic would be to run sponsored content on different social media platforms. It’s one thing to build a loyal following on these channels, but the NDC, on behalf of the industry, is speaking to a very, very broad population that has the potential to buy an actual diamond, Kellie explains.
“One has to appear in the feeds of those who are enthusiastic about diamonds and jewelry and those who haven't even thought about it,” he continues. “It costs money to make sure that your content, your advertising, shows up if you want to reach hundreds of millions of people who are not specifically looking for your content, but you want them to understand more about diamonds.”
While the social media landscape is much more fragmented than before in terms of the many different channels that are available, it costs money to run such content on each platform, and it’s something one must do every day, he adds.
The second aspect is to show up where consumers are searching for things, such as google. You have to pay to make sure you appear when someone searches for your product, Kellie stresses.
Finally, the NDC plans to run educational programs to train sales professionals among the tens of thousands of retailers that sell diamonds around the world. “Those are the people who are ultimately responsible for the client relationship, and we want them to be properly informed about the values of natural diamonds,” Kellie declares.
Such educational programs would be through digital channels that retailers would gain access to, he adds.
Turning to the trade
Raising the budget from $35 million to $100 million and more seems a massive task.
While the NDC’s predecessor, The Diamond Producers Association (DPA), was set up by seven or eight mining companies to promote demand for natural diamonds, the NDC currently has just five members fitting the bill. Those include De Beers, Rio Tinto, Petra Diamonds, RZM Murowa Diamonds, and Botswana’s rough trader Okavango Diamond Company (ODC).
Mid-tier producers including Lucara Diamond Corporation, Gem Diamonds, and Burgandy Diamond Mines are notable absentees.
Kellie has turned to the trade to play its part.
In a significant moment that marked the climax of the Dubai Diamond Conference on November 11, the trade bodies from various diamond centers pledged to help boost the NDC’s budget.
Among those on stage with Kellie were Martin Leake, special advisor for precious stones to the Dubai Diamond Exchange, Karen Rentmeesters, CEO of the Antwerp World Diamond Centre (AWDC), Sabyasachi Ray, managing director of India’s Gem & Jewellery Export Promotion Council (GJEPC), and Mmetla Masire, CEO of ODC. The panel discussion was moderated by Felicitas Morhart, professor of luxury marketing at the University of Lausanne.
India’s lead
India’s industry already contributes to diamond promotional activities. It earmarks 0.02% of the value of rough imports declared at customs for that purpose, noted Ray.
In 2016, the GJEPC signed a memorandum of understanding (MOU) with the DPA to collaborate to strengthen the industry. As a result, most of the money collected from the rough imports has gone to the DPA or subsequently to the NDC when the organization rebranded in 2020.
Over the years, the GJEPC has contributed over $15 million to the industry’s generic marketing efforts, Ray reported. While it hoped other centers would follow its example, none did.
That seems set to change as the trade bodies agreed in Dubai to explore ways to implement mechanisms through which everyone can contribute.
Rentmeesters urged that such a system should be simple, straightforward, easily understood, and implementable across all hubs and producing countries. Leake agreed, while acknowledging that a lot needs to be considered to get the process underway.
“When we look at the supply chain, we have to look at the different chokepoints and understand how we can all work together to have a fair and equitable mechanism to make contributions to the global market,” Leake said. “It’s still early stages and every center is different.”
The issue came up again at the recent Facets2024 conference in Antwerp, with the intention to keep the conversation going and show unity around the topic.
Value for money
For his part, Kellie saw the discussion in Dubai as a breakthrough. Not only should everyone in the industry contribute since they all stand to benefit from such activities, but it would also enable a broader representation on the NDC board, giving the trade a say in the programs that the NDC runs. That’s something Kellie encourages.
Most importantly, he stresses the industry cannot afford to take its eye off the ball again.
“When you think about the reduction in supply over the last ten years at the same time as we’ve had booming middle-class prosperity around the world, and yet the industry is in the position we’re in,” Kellie notes. “We have completely screwed this up, and it's because we haven't focused on demand.”
He urges the industry to think about the brand of natural diamonds and the values it represents. By doing so, one recognizes that to create and maintain a brand is ridiculously expensive, “but it’s good value for money when you consider the potential benefits and what is at stake,” Kellie concludes.
Having made the pledges, it’s now up to members of the trade, and others across the diamond distribution chain, to play their part. The industry needs to invest in category marketing and the NDC is the logical recipient, considering that is its very mandate.
And as the NDC can rightfully demand to “Just Give Me My Money,” the industry will hold it accountable. The hope is that doing so will enable diamonds to have their viral moment again.
Image credits:
Top: Rough and polished diamonds used in NDC campaign. (Credit: NDC).
Middle: David Kellie, CEO of the NDC. (Credit: NDC).
Bottom: Felicitas Morhart, , professor of luxury marketing at the University of Lausanne; David Kellie, CEO of the NDC; Mohammed Karam, head of business development for precious metals and stones at the Dubai Multi Commodities Centre (DMCC); Martin Leake, , special advisor for precious stones to the Dubai Diamond Exchange; Sabyasachi Ray, managing director of the GJEPC; Karen Rentmeesters, CEO of the AWDC; and Mmetla Masira, CEO of ODC. (Credit: Avi Krawitz).