I don't think there has to be merely one single solitary reason for the popularity of diamonds. Whenever you see profound effects (in this case, a massive number of people people grossly overpaying for a useless rock), it's worth considering the possibility that you have several strong forces all pushing in the same direction. In this case, yes, advertising doesn't hurt. But there are plenty of other factors that may be contributing:
Social Proof, Envy - You're 28. Many of your good friends are married or engaged by now. All of them got diamonds. Your mother got a diamond. Your sister got a diamond. All of your celebrity idols got diamonds. Surely, it's a normal thing. There's nothing wrong with you wanting one, too, right?
Doubt, Insecurity - You're dating the man of your dreams. You love him and want to spend the rest of your life with him. Marriage is a big step, and you want to know he's committed. Sure, diamonds are useless and overdone, but it's expected of him to get you one. And a big one, too, if he can. You know it. He knows it. So if he doesn't, surely it's a subtle way of him saying, "You aren't worth it."
Fear of Loss - You've been looking forward to this your entire life. By the time you were old enough to consider the possibility that diamond-giving is a dumb and arguably immoral tradition, you'd already spend 15 or 20 or 25 years wanting one. You'd already accepted that you would get one. The fear of loss is a powerful force, even when you're "losing" something you don't have yet.
Inconsistency Avoidance - Refusing to accept a diamond would undoubtedly and repeatedly put you in the position to explain yourself. In a way, it's a silent judgment of all those who do accept diamonds. You've never denounced them in the past. In fact, you were right there with all your friends joking about how big of a rock you'd get some day. So denouncing them today will seem inconsistent, and you don't want to be inconsistent. Nobody does. (If you doubt this this a major psychological factor capable of influencing behavior, read Cialdini's "Influence".)
Etc.
Advertising spend in and of itself isn't a reason people buy things. Nobody ever said, "I want a Coke because Coca-Cola spent $3B on marketing this year." Instead, people want things for primarily carnal and psychological reasons. Because it's hot outside and you know Coke is cold. Because you're craving stimulation and you know carbonation tickles your mouth. Because you know your friends with their big expensive rings will think less of your relationship if you don't get one, too.
Good marketers understand human psychology and play to its weaknesses.