Overview: Is a diamond less of a commitment if it was grown in a lab? A recent NAD decision explores lab-grown diamond labeling. A diamond may be forever, but you also forever need to substantiate your advertising claims, if you want to withstand regulatory scrutiny.
Natural Versus Lab Grown Diamonds
Is the value of a diamond based on its composition, its market value, or how it is created? Advertising claims from Agape Diamonds drew scrutiny from the National Diamond Council, which brought a complaint before the NAD. The Federal Trade Commission has guidance on the marketing of synthetic gems to protect the trade of authentic gems, and the NAD used this guidance in deciding this case. But first, how is the value of a diamond determined, and how are gems marketed?
Marketing Bright Shiny Things
Lab-grown diamonds are chemically and structurally identical to natural diamonds. However, the FTC Jewelry Guide states that synthetic gems must be clearly labeled as synthetic to protect consumers. Natural diamonds and the natural diamond market should therefore operate separately from the synthetic market, theoretically. However, the markets show signs of overlap; sales of loose lab-grown diamonds have more than doubled from 2020 to 2022, from an average of 8.3% of the diamond market to 17.3%. As a result, advertisers and competitors may continue to scrutinize the marketing of lab-grown diamonds.
Brilliant Example of Claim Substantiation
Agape marketed its lab-grown diamonds and gems as “conflict-free,” but without the labels “synthetic” or “lab-grown.” The National Diamond Council therefore brought Agape in front of the NAD, which used the guidance from the FTC Jewelry Guide and ultimately recommended that Agape amend its website, social media, and marketing efforts to comply with that Guide. While the practices involved in the mining of natural diamonds are controversial, due to reports of child labor violations and lack of international monitoring, and the use of “conflict-free” in diamond marketing campaigns is mainstream, synthetic diamond marketers must still clearly market their gems as synthetic or lab-grown.
All advertisers need to substantiate their claims to withstand regulatory scrutiny, but it may be especially important for those marketing on a sensitive or controversial topic. If you’re interested in conducting consumer perception research to substantiate a potential advertising claim, contact the experienced consumer survey experts at MMR Strategy Group.