Tuesday, August 13, 2013

Diamonds, Advertising, DeBeers and Sex

This morning I participated in a Google hangout organized by the Huffington Post, along with Mike Huemer and some other people. The topic was engagement rings, inspired by a recent blog post on the subject.

The author of the post repeated the standard story according to which diamonds became popular for engagement rings as a result of an advertising campaign by the N.W. Ayer advertising company on behalf of De Beers. Pretty clearly the author had not read the classic article on the subject, "Rings and Promises" by Margaret Brinig, which offers a more interesting explanation of why and when the giving of an expensive engagement ring became a common custom.

Her explanation starts with the fact that pre-marital sex is not a new invention. In the early 20th century, a common pattern was for engaged couples to have sex with the understanding that if the woman got pregnant they would get married; evidence from several late 19th century European cities suggests that about a third of brides were pregnant. One problem was the risk of that the man, having gotten the sex, would dump his fiancee instead of marrying her. One solution to that, in U.S. law, was the tort action for breach of promise to marry. In a society where marriage was the main career open to women and the fact that a woman was known not to be a virgin substantially reduced her marriage prospects, seduction could impose substantial costs and result in a substantial damage payment.

Starting in 1935 in Indiana, U.S. states started altering their laws to abolish the action for breach of promise. Women responded, by Brinig's account, by requiring a down payment from their fiancees in the form of an expensive ring—which forfeited if the fiancee terminated the engagement. Think of it as a performance bond.

Brinig looked at data on diamond imports and concluded that the demand for diamonds started to rise about 1935, four years before the Ayer marketing campaign that is usually given credit for creating the demand for engagement rings. The evidence also suggested that the custom began declining once premarital sex became widely accepted, largely eliminating the problem it was designed to solve. Since 1980, by her account, engagement rings have never amounted to as much as 20% of all diamond sales.

From which I conclude that the Ayer agency was indeed good at marketing—not necessarily at marketing diamonds, but at least at marketing itself, spreading a story that gave it credit for a stunning effect that began four years before its supposed cause.

22 Comments:

At 12:31 PM, August 13, 2013, Anonymous Dick White said...

I just read the article and the data is clear, yet my experience within my circle of acquaintance is that women routinely, indeed always, are presented with an engagement ring as part of the marriage proposal activity. Of course, that non-statistically significant group cannot yield any serious inference but I am curious of others' circle of acquaintance empirical observations. Might the stable 20% sales figure represent the introduction of new diamond products or changes in other existing diamond products?

 
At 12:41 PM, August 13, 2013, Blogger David Friedman said...

Interesting question.

I wonder what has happened to the value of the usual engagement ring relative to income. One possibility is that it remained as a symbolic statement of engagement while representing a decreasing actual value.

When I got engaged to Betty I gave her a tsavorite--a green garnet.

 
At 12:44 PM, August 13, 2013, Anonymous Patrick said...

Dick,

The statistic is that engagement rings represent 20% of the diamond market. This could be true even if giving diamond engagement rings were nearly universal. The other 80% would be for other jewelery, and possibly for industrial diamonds, depending on how the market is defined. As a rough picture, one might imagine that throughout their lives, men buy their wives an average of one engagement ring and 4 other equivalent diamonds (though obviously women can also buy them for themselves, and some diamonds are bought for men).

 
At 12:59 PM, August 13, 2013, Blogger Tibor Mach said...

This pattern of behaviour can be observed in other species as well. Dawkins in his Selfish Gene mentions this exact "diamond ring strategy". The idea is that from the "perspective of the gene" it pays off for the male to leave the female right after the offspring is concieved. It is because of sunken costs. The female has already invested more of her resources - the egg contains a lot more nutrition than the sperm (and especially in mammal who keep the fetus inside of them, the costs are even larger). She could leave as well and leave her mate with the eggs (let's say it is a bird) but the male then could let the eggs die at a much lower cost to himself (sperm, unlike eggs, is cheap in terms of nutrients) and try his luck somewhere else. One solution that some birds (and probably other animals as well...that is other than birds and humans) employ is to require the male to make an investment prior to being able to reproduce. For example, the male bird has to build her partner (and future offspring) a nest, or has to feed her for some time. Then leaving becomes more costly. If he leaves, his offspring is more likely to die, he can try it elsewhere, but has make the same investment each time. That does not pay off. Diamond rings can be seen as a human version of that.

What seems strange to me however, is the dowry. The bride comes with a bonus of a lot of money or something similar from her parents (not so often and much in quantity today, but pretty much a requirement for her to marry even at the beginning of the 20th century and in some societies even nowadays), which is the exact opposite of a diamond engagement ring from her man. Maybe that was just a price of the contract of marriage which was the true "diamond ring". And since it was much more difficult for anyone to divorce back then, it was much more of a cost for the man to agree to the terms of marriage and so it had to be "sweetened" by the dowry. Of course, the people involved don't probably even understand it in these terms (and the birds definitely don't). These are just some customs that arose, since they were useful in some sense.

 
At 3:04 PM, August 13, 2013, Blogger Julien Couvreur said...

Any chance the hangout discussion was recorded and would be shared online?

 
At 5:15 PM, August 13, 2013, Blogger John David Galt said...

I believe Bill Maher's theory that most diamond purchases are made to get special sexual favors.

This is probably the only thing he and I agree about.

 
At 5:31 PM, August 13, 2013, Blogger David Friedman said...

Julien:

I think the idea of the hangout was to be observable by others, so I assume it was recorded, but I don't know where you find it.

 
At 6:16 PM, August 13, 2013, Blogger BIll Sommerfeld said...

A satirical reference to "breach of promise of marriage" can be found in Gilbert & Sullivan's 1875 work, "Trial by Jury".

you can find the libretto here:

http://diamond.boisestate.edu/gas/trial/html/

In my reading it's consistent with Brinig's view of history - there's no mention whatsoever of any engagement ring, but merely a verbal promise...

 
At 7:26 PM, August 13, 2013, Blogger Tibor Mach said...

Also, the reputation of being the company "that started it all" might not necessarilly be good marketing. For example, I am sure that a lot of people on the left, with their hostility to private enterprice, would say something along the lines of "Look at that, they brainwash and manipulate people to buy their useless nonesense". If there are enough people like this who feel strongly enough about it, then it would actually be good PR to deny any "responsibility" for the rise of diamond ring sales.

 
At 6:13 AM, August 14, 2013, Anonymous Chris Goss said...

Here's the link:

http://live.huffingtonpost.com/r/segment/is-it-time-to-get-diamonds-out-of-engagements/5201174ffe34442e4000005e

 
At 11:40 AM, August 14, 2013, Blogger Milhouse said...

Tibor, it doesn't matter what "people on the left" think, all that matters is what potential clients think. Every publicist would be delighted to be thought of, and vilified as, one who can brainwash and manipulate people into buying useless nonsense. Even someone who disapproves of that sort of thing, will be impressed by it when he has something to sell, and that's all that matters.

For another example, consider the case of "subliminal advertising". It doesn't exist. That is to say, there has never been any evidence that it works. But it was invented by a clever cinema owner who convinced his clients that it would work, and got them to pay him to flash their ads on the screen for microseconds.

 
At 2:59 PM, August 14, 2013, Blogger Julien Couvreur said...

Thanks Chris for the link and David for the interview.

 
At 3:01 PM, August 14, 2013, Blogger Tibor Mach said...

Milhouse: Of course it doesn't matter what "people on the left" think. But if there is an substantial number of people who think that way, they may stop being clients and that is what I mentioned. Perhaps it is nitpicking.

Also, subliminal messages seem to be bogus to me as well, but that is not the point. The point is not if the company actually did or did not do something, the important thing (from the company marketing's perspective) is what people (possible clients) believe.

 
At 3:12 PM, August 14, 2013, Blogger Tibor Mach said...

Well, I've watched the video only to find out my comment about other species (birds in particular) was unnecessary, since David mentions exactly that in the video :)

 
At 4:09 PM, August 14, 2013, Blogger Milhouse said...

Tibor, why would thinking this stop people from becoming clients? On the contrary, it would make them even more eager to become clients of such magicians. They may thoroughly disapprove of it, but they'll still buy their services.

And that's the point about subliminal advertising. It's bogus, but if it were real it would certainly be unethical. You'd expect such a story to be made up about someone by his enemies, and for him to deny it. But that's not what happened. The story was invented by someone to tell about himself. He falsely bragged about doing something so unethical — because he wanted people to believe that he really could do that for them, that he really could brainwash people into buying their product. Surely the clients he was after did not approve of what he was claiming to do; but they paid him for it anyway, because they thought it worked.

 
At 4:31 PM, August 14, 2013, Blogger Nancy Lebovitz said...

I assume that even if people were trending towards expensive engagement gifts, it's still something of an achievement to convince them that one particular sort of thing is the appropriate gift.

 
At 10:51 PM, August 14, 2013, Blogger Jonathan said...

I never went in for a formal engagement or an engagement ring, I regard that kind of thing as old-fashioned. However, come to think of it, I did give my wife a new car before we got married. I had more spare cash in those days.

 
At 3:26 AM, August 15, 2013, Blogger Tibor Mach said...

Milhouse:

Well, this would work well for the clients of an advertising agency - if they believe you can do "magic", they will buy your services. But not clients of those clients. If people who actually buy diamonds from your company think you are really manipulating them (or other people), they may decide not to buy anything from you, since from their perspective your company is "evil". Take that student from the hangout video - he seems to be exactly that kind of a lost customer. He keeps talking about two things - high (in his words artificially high) prices and people doing it, since they are "brainswashed" (I don't know if he used that particular word, but I think he said something like that). So if he did not think that people are brainwashed into buying diamonds he might have bought one as well (maybe not, he had other reasons, but one can at least imagine someone whose only objection is exactly this).

 
At 3:12 PM, August 15, 2013, Blogger Power Child said...

@Milhouse:

This is definitely nitpicking, but you can't flash an ad on a movie theater screen for a microsecond, since the shortest amount of time you can show a single image in standard motion picture technology is 1/24th of a second (1/25th in PAL), or one frame. Occasionally there are special "high speed projection" screenings, in which the shortest time would be 1/48th of a second. (A microsecond is 1 millionth of a second. The human eye can't register an image that quickly, even subconsciously.)

@Nancy Lebovitz:

It could be that people naturally follow the herd, so all you need is a certain critical mass of people doing one thing. Getting to that critical mass may be an accomplishment in its own right, but our affinity for precious metals and stones--or shiny, sparkly things, more generally speaking--is nothing new either. In that case, the big achievement was more like a well-placed nudge.

 
At 8:21 PM, August 16, 2013, Blogger David Friedman said...

Nancy:

Think of it as language. Wearing a diamond solitaire on your ring finger means "I am engaged" just as "one ton" means 2000 lbs. In both cases there is substantial pressure for conformity in order that speaker and listener can understand each other.

 
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At 8:32 AM, August 26, 2013, Anonymous Roger M said...

One should be careful in the interpretation of the custom of a bride coming with a dowry. That custom, which did not really apply much to the vast number of people that didn't really have anything, was most common during a time when the idea of personal property had a much different meaning compared to today. Personal property as we understand it is a modern invention. Over most of recorded history, property in "advanced" societies belonged to the household, not to individuals. Even though the head of the household might control that property, and could be said to "own" that property, he if custom and in some cases by law controlled that property for the good of the household. In this system, leaving with a dowry is leaving with one's share of the household. It should also be noted that in some societies the dowry was forfeited back to bride (or the bride's control) in the case the marriage was dissolved for some (extraordinary) reason.

 

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