Category: Analysis

Diamonds are Bullshit

Diamonds are Bullshit

While it seems odd today, diamonds weren’t used in many engagement rings prior to our grandparents’ generation. Until then, when engagement rings even had precious stones, exotic gems like opals, rubies, sapphires, and turquoise were chosen more frequently. In a world without the “A Diamond is Forever” campaign that wouldn’t be surprising. After all, there isn’t really much difference between diamonds and other rocks coming out of the ground, except that they are a lot less noticeable than the gems we just mentioned.

So why are they the top choice now?

To answer that we first need to discuss De Beers, which was founded as a monopoly to raise the value of diamonds by creating artificial scarcity. Unfortunately for them, scarcity alone isn’t enough to make everything desirable and De Beers was faced with the question of how to raise demand for something with little inherent value.

After struggling through two decades of stalled sales, De Beers turned to the ad agency N.W. Ayer. But the way the agency saw it, raising demand meant completely eschewing the idea of inherent value and instead making diamonds mean something.

N.W. Ayer’s first step was to raise public perception of diamond’s by associating them with high society. They lent jewelry out to stars for awards ceremonies and other highly visible social events. They also pushed diamonds into movies and magazines. But they began to branch out from using diamonds solely as a mark of status and towards connoting love as well. For instance, they placed diamond rings in movies as symbols of unwavering devotion, and instructed the press to report on celebrity romances, the diamonds celebrities wore, and particularly on their diamond engagement rings.

By 1941 sales of diamonds had risen 55%, but N.W. Ayer wasn’t done. Actually, in their 1947 strategy plan they stated, “We seek to … strengthen the tradition of the diamond engagement ring — to make it a psychological necessity”. Incidentally, 1947 is also the year they created the slogan “A Diamond is Forever”, which is perhaps their most effective conveyance of the idea that diamonds are the symbol of love and commitment. Obviously, they were successful in creating that psychological necessity: diamond engagement rings became a part of our culture because we accepted the idea that giving someone a diamond proved you were in love. In fact, they were so successful that in their 1951 annual report N.W. Ayer said “jewelers now tell us ‘a girl is not engaged unless she has a diamond engagement ring.’”

Further campaigns continued to promote the association between diamonds and love, solidifying their brand positioning. For instance, some campaigns used diamonds as anniversary presents or encouraged people to hold on to the stones of family members as heirlooms, which had the side benefit of keeping supply down.

But it wasn’t always easy for De Beers.  They made diamonds objects of conspicuous consumption. Engagement rings in particular are meant to show that you are in a committed relationship and to ward off new suitors. But that also makes diamonds status symbols – bigger stones were bringing higher status (or proving great devotion). That is, until later in the cold war, when Soviet diamonds appeared on the market and threatened the delicate pricing De Beers created. It’s at this point that De Beers began to inform people that, actually, the the size of the diamond didn’t matter, after all. Instead much less noticeable things like color and cut were the important factors.

At this point we could sit back and roll our eyes. Their success in making diamonds represent love and commitment is certainly arbitrary, but it’s also kind of beautiful.

Unfortunately, there are also other pernicious factors at play. The price of diamonds isn’t just inflated because of manufactured scarcity or successful marketing. It’s also inflated because diamonds unnecessarily pass through the hands of several middlemen who take a cut of the profits even before entering a second monopoly. Often people will shop around for the best deal on an item, jewelry is no exception. The difference for jewelry is that the big chains (Kay, Jared, and many others), are actually owned by the same company, and strategically placed near each other to trick you into believing the prices for their monopoly supplied diamonds are fair. They aren’t.

De Beers campaign was so successful that 80 years later the diamond ring is still an unquestioned rite of passage. It’s legacy is undeniable.¹ And that’s also why De Beers shouldn’t fear the new technology enabling diamonds to be mass produced – those diamonds weren’t formed over thousands of years, those diamonds haven’t stood the test of time, those diamonds aren’t forever. What De Beers should fear isn’t a new twist on the problem of Soviet diamonds, what they should fear is an erosion of what diamonds stand for.  

1. In fact, I find it hard to imagine turning your loved ones into jewelry could have happened without it, though perhaps that would have been for the best.

Budweiser’s Buds for Buds campaign

Adweek put out a list of the best Facebook Marketing Campaigns of the past year. The Ice Bucket Challenge was the obvious winner and several others did really well, including Always’ Like A Girl campaign.

They also lauded the success of Budweiser’s Buds for Buds campaign.

Certainly, offering free beer is going to increase sales in the short-term¹, and that was Adweek’s measure of success for the original campaign. For Budweiser, thrown into uncertain conditions by the booming craft beer industry, any increase, even at the expense of margins, might be very satisfying. They certainly did some things well. In particular, the campaign did a good job of lowering the cost of the good without lowering the perceived value of it, which is a key struggle for brands that use sales. I also tend to believe it brought in alternate consumers rather than cutting the price for those who would have bought Bud anyway.  

However, the ad included in Adweek’s list is actually for the follow-up campaign promoting the success of their Buds for Buds campaign. While the initial campaign ad may have been a success the promotion of that campaign (which was a much bigger project) could have done a lot better. Let’s take a look at that ad. Unfortunately you’ll have to view it here and come back.

Doesn’t the over-dramatic writing makes it seem ungenuine? There are certainly a few points where it could be improved. The thing to focus on is that most consumers understand there is a bias in advertising and view ads critically. Thus, making overly dramatic claims in turn gets consumers overly critical.  Let’s zero in on the first paragraph. Take a look at what it says:

“Budweiser’s been a part of American life for almost 150 years.
For generations handing a friend a Bud has said more than words ever could.
But you can’t always be there for the moments in life that matter,
And as much as social media has helped us stay in touch with each other’s lives,
The truth remains, a like is still not as powerful as a high-five, a heart isn’t a hug, and nothing’s as meaningful as handing someone an iced cold beer.”

It’s not terrible, but do you really want to overstate your case as much as “handing a friend a Bud has said more than words ever could”? Put that together with “Nothing’s as meaningful as handing someone an iced cold beer” and, especially as a beer on the lower end of the spectrum, you might be getting laughed at. Nostalgia’s not a bad start for Budweiser, combine that with a lower price point and you might be able to start moving product. Here’s something less clumsily direct that could play out better:

 

“Budweiser’s been a part of American life for almost 150 years.
We were there when Ruth hit 713 and when Aaron hit 755.
We were there when Armstrong ‘hit’ the moon.
We’re still here.

Handing a friend a Bud still says “Thank you”, “congratulations”, or “well done”
Unfortunately, you can’t always be there for the moments in life that matter,
And as much as social media has helped us stay in touch
The truth remains, a like is still not as powerful as a high-five, a heart isn’t a hug, and nothing’s better than grabbing a beer with a friend.

Which is why we created Buds for Buds
So friends could share beers, no matter the distance, as easily as they share anything else online.
And they have, with thousands of Budweiser’s travelling millions of miles through facebook, text, and email.
For birthdays, promotions, bachelor parties, and for… people who just thought it was cool

We brought the age old tradition of buying a friend a beer into the digital world
Proving that buying a Bud for a bud is as relevant today as it was in 1876.
Something’s will never change.

Budweiser:
Be there. Even when you can’t be.”

 

 

  1. In terms of product moved if not necessarily revenues. Though you’d certainly hope that increases as well.

Samsung Galaxy S3

“The Next Big Thing is Already Here”

I’m going to disclose upfront that Samsung’s Galaxy S III commercial is one of my all time favorites. I remember the first time I saw it. When it was over, I was standing saying to an empty room, “That was f***ing amazing”. No other ad has ever struck me in the way the Galaxy S III’s did. The thing is, the ad didn’t just generate a lot of buzz, or attack Apple, or promote the S III. In a minute in a half, it did all of that and so effectively that it contributed to record sales.

We could break the commercial down a few different ways, but I think it’s most important to look at what Samsung was doing with positioning. I’ll always believe that part of the reason the iPhone took off, at the expense of Blackberry, was that the Blackberry became seen as a product that kept people working while they were away from the office. The iPhone, on the other hand, offered people a chance to play while at work. Even as top dog in 2012, Apple was benefiting from the rebellious brand image it cultivated in the 80s. It was still seen as young, hip, and counter-culturish. In fact, at the time Apple’s commercials against Microsoft still promoted this idea.

But, of course, the iPhone was undoubtedly the category leader, and Apple’s omnipresence was becoming a liability to its rebel brand image. This point is exactly what Samsung wanted to attack, while simultaneously marking their technology as outdated.

To do that, Samsung shows long waiting lines at several locations painting the iPhone (appropriately) as mainstream. Sandisk tried to knock Apple off years before by exploiting the “iHerd” mentality. Samsung builds on that. In their commercial, the iPhone users are uninformed and their ranks are being filled by parents and grandparents. The iPhone fans are also talking about really insignificant changes as the big draw for the new release (which was credible, because the 5 didn’t offer a big leap from the 4S).

It takes 30 seconds before we even see the S III and even longer before they begin to talk about its advantages, but it’s done in a way that serves to pique our interest and sets up a comparison of the products. It becomes the S III that is creating buzz and is buzzworthy.  As I said, the ad is credible: it doesn’t attack the look of the iPhone, which has always been an advantage, for instance, but instead attacks its size, its market, and its technology. Then it wraps up with a summation that stresses all of these things “The Next Big Thing is Already Here”.

But the reason I love the ad is that Samsung doesn’t tell us all of this. It shows us. This is important because when people already have information they tend to hold on to it in the face of contradictions (you can look into cognitive dissonance or at Ries and Trout’s Positioning: The Battle for Mind for background on this bias). Rather than outright contradicting our brains, which would be met with cognitive resistance, the commercial forces us to compare the products and attempts to reframe how we think about them. It wants to be seen as cooler than the iPhone and technically superior. You’ll notice that it doesn’t compare its design or layout with the iPhone (which it would probably lose on), and it didn’t discuss its lower price point either because of the general belief that a higher price equates to cooler and technologically superior items. Instead of being a selling point, mentioning that could actually erode the S III’s position as the hip alternative to the iPhone.

Generally, it is unfortunately hard to track ads sales successes from outside of the product’s company. However, this ad was successful enough both the S III and S 4 set sales’ records after this campaign was launched.

If you want to read more case examples on successful competitor repositioning: Here’s an analysis of Tylenol’s brilliant campaign.