How De Beers Convinced People to Buy and Covet Worthless Diamonds
Executive Summary
- The story of how De Beers created a new market for its diamonds is one of the great stories of mind control.
- We cover how De Beers performed this mind control trick.
Introduction
De Beers created the engagement ring business (that is for non-elites) out of thin air. How they did it is an essential lesson for companies creating demand — more than meeting demand.
The Strategy is Hatched
De Beers hired Philadelphia ad agency N.W. Ayer in 1938. De Beers chose N.W. Ayer because of their ideas on conducting extensive research on social attitudes about diamonds, and then strategically changing them to appeal to a wider audience.
So, how do they get more people to buy big diamonds in a bad economy? They needed to figure out a way to link diamonds with something emotional. And because diamonds weren’t worth much inherently, they also had to keep people from ever reselling them. What was emotional, socially valuable, and eternal? Love and marriage. Bingo.
Eventually, Ayer would convince young men that diamonds are the ultimate gift of love, and young women that they’re an essential part of romantic relationships. – Hubspot
Creating a Faux Set of Standards
De Beers also created a set of standards for diamonds that it told its potential customers were important to consider before making a purchase.
Every one of De Beers’ advertisements featured an educational tip called, “How to Buy a Diamond.” The instructions said: “Ask about color, clarity and cutting — for these determine a diamond’s quality, contribute to its beauty and value. Choose a fine stone, and you’ll always be proud of it, no matter what its size.” – Hubspot
De Beers Connects Diamond Ring Purchases to Long-Lasting Relationships
The ads said things like, “Isn’t two months’ salary a small price to pay for something that lasts forever?” – Hubspot
This is curious because giving resources (in the form of a diamond) does not control the length of a relationship. Secondly, the diamond engagement ring that is supposed to do this is worth far less than what was paid.
Connecting Sex to Giving Diamonds
De Beers has a series of very widely watched commercials produced in the early 1990s. Virtually anyone alive in the US at that time recalls these commercials.
Purchase #1: The Engagement Ring?
This is one of the most famous television advertisements produced for De Beers. However, notice the explicit quid pro quo of the ring for sex. The ring is given, and then a kiss occurs. Most feminists, who will bring up the fake wage gap, still desire diamond rings, which means they always demand financial resources.
Many women will present this type of commercial in a “romantic context.” However, the fact is that the same theme could be applied to a commercial that is filmed in a strip club. Same music, same shadow backdrop, same music — but in this case, a woman is stripping, and then dollar bills are given to the woman, after which she provides a lapdance.
It is the same quid pro quo — except for one difference. The strip club is a smaller amount of financial resources in return for a shorter-term sexual or sexual type offering.
A major part of the engagement ring experience is that women enjoy shoving the ring into the faces of their friends and family, who will “give the proper respect and deference” to wasteful purchase, and therefore, the status of the woman wearing the ring.
Beyonce’s wedding ring was estimated to cost $5 million and is almost as wide as her finger. It does not look like a wedding ring.
Purchase #2: The 10th Anniversary Band?
Looking for repeat business, De Beers decided married men should now purchase an anniversary band.
Once again, the reception of the band is greeted with a kiss. What if men don’t buy the band? Does that mean they would not marry their wives all over again?
These advertisements seem to be constructed by someone who has never been in a relationship. There is very little passion left in relationships after ten years.
Purchase #3: The 25 Year Anniversary Necklace?
Twenty-five years have passed; now, its time to give De Beers more money. This is the 25th-anniversary necklace.
All of this is an attempt to normalize, giving a series of high-margin items to women from men. However, at this point, the two have community property, meaning both individuals are paying for it. Neither the various anniversary ring/necklace ever seemed to take off as the diamond engagement ring.
The diamond engagement ring was an absolute hit, with it being infrequent for people in the US and most developed countries to get married without one.
Is De Beers Just Interested in Supporting Romance?
Curiously, De Beers is an international expert on romantic relationships. Some questions naturally follow.
- Where did De Beers acquire this expertise?
- Was there a serious shortcoming to previous romantic relationships in human history diminished or missing that special something because they were not buying diamonds from De Beers?
- Was there anything related to De Beers’ profits to become the world’s self-appointed experts on romantic relationships?
Creating More of a Demand…for Greed?
This video should be used to teach how superficial people can be.
These women are thinking about how to make even more money to buy useless trinkets and small shiny objects. Much of the way in which those already making good incomes will find more income to buy these trinkets will nearly always have something to do with lying, labor exploitation, or some fraud.
How Diamonds Have Resisted the Rise of Synthetic Diamonds
Technology has evolved to the point where gemologists cannot tell the difference between real and synthetic diamonds. Yet, this has not led to a collapse of the diamond market. This is another question as to how a useless item can have a perfect, inexpensive replacement. Any person can walk around with any carat diamond, impressing everyone they see. Ten karats, 20 carats, the sky is the limit with synthetic diamonds.
Don’t Look At How the Diamonds Are Mined
While De Beers has been very focused on creating demand for high-margin diamonds, they have put close to no effort into improving the working conditions of diamonds mined in Africa.
Blood diamonds are a big part of the diamond trade. What would make for an interesting video is to intercut images of blood diamonds in the De Beers commercials above.
It has been embarrassed by disclosures that to prop up prices, it bought millions of dollars of diamonds from rebels in Angola. – New York Times
It is curious how De Beers could have been and could be so interested in helping people solidify their romantic bonds while turning a blind eye to slavery conditions. One might say that this is disgusting.
There are several diamond mines shown in this video. Imagine the environmental damage from these mines not meeting any real human demand.
Diamonds are enormously ecologically damaging to mine — especially considering that the vast majority (some of which are used for industrial purposes) have no reason outside of a faux demand to be mined.
Conclusion
This story is negative in many dimensions. De Beers essentially placed a tax on romantic relationships. It made people spend money on unimportant things, except for women, to show off to their friends.
The positive side of the story, if there is one, is that demand can be stimulated for something that people originally did not know they wanted. There might be something to studying this story for companies that provide something of utility, but prospective consumers are unaware of this utility.
However, in many cases, the example of De Beers will be used to train other marketers who intend to sell products or services of limited utility to consumers. De Beers will be used to show how consumers can be created through deception.
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References
*https://www.aei.org/carpe-diem/on-the-economics-of-diamonds-the-biggest-marketing-scam-in-history-orchestrated-by-the-most-successful-cartel-ever/
*https://www.nytimes.com/2000/07/13/business/de-beers-halts-its-hoarding-of-diamonds.html
This is an amusing quote on the “diamonds are forever” marketing jingle.
Think about the advertising slogan “Diamonds are forever.” Well, wouldn’t a rock or a penny or a piece of steel be forever, too? I have sharks’ teeth that are 50 million years old, so I think sharks’ teeth are probably forever, too. And wouldn’t a ruby or an emerald or a bar of gold be forever too? And why pay a lot of money for something that will last for a million years when you’ll only be able to use it for maybe 50 years? Seems irrational.
https://blog.hubspot.com/marketing/diamond-de-beers-marketing-campaign
This quote is very interesting that De Beers no longer has a monopoly on the diamond trade.
Since the turn of the century, De Beers has effectively lost its monopoly of the world diamond trade, although they still bring in billions of dollars every year. But by marketing an idea rather than a product, they built a strong foundation for the $72 billion-per-year diamond industry and dominated it for a good 80 years — and that’s a story worth learning more about.
This video also covers this topic.