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Is Luxury Watch Marketing Failing?

Is Luxury Watch Marketing Failing? Featured Articles

It is a hot late-Summer day in the Lower East Side of people-busy Manhattan, and strolling down the street, I notice the side of a brick building painted with a 12-foot tall advertisement for a luxury watch company. It would actually be easy to miss noticing it above the corner market below, situated at the ground floor of the aging residential structure, and the ad – like so many of its kin – simply has the name of a brand and the picture of a watch, with an arguably tantalizing, yet ambiguous, slogan.

Around the planet, in Hong Kong, watch ads litter the streets, buses, and billboards. It is difficult to travel more than a few steps in any commercial area and remove yourself from a line-of-sight view with a poster or sign marketing a watch maker – often with a regional or international celebrity wearing the product. In a dark, dirty, and ill-smelling alley behind the main thoroughfare, the walls are lined with evenly spaced posters for some of the world’s top luxury watch makers.

Is Luxury Watch Marketing Failing? Featured Articles

Somewhere between New York and China, a couple sits in the lobby of a five star hotel until their room that was supposed to be available hours earlier is ready. In front of them on a table is a series of artfully fanned out “lifestyle magazines,” each populated with at least 10 ads for watches, most of which feature a brand name floating around a gloriously photographed and meticulously edited timepiece image, with little to no supporting text. These magazines exist exclusively to find their way into places where people, who are suspected to have large disposable incomes, wait.

Dozens of times each year, large and small watch companies sponsor popular people and widely-attended events (or so they believe), in the hopes of reaching the eyes and hearts of fans and followers. The accumulation of these marketing efforts, and others like them, probably add up into the billions of dollars each year.

Is Luxury Watch Marketing Failing? Featured Articles

Formula 1 is a popular global event and hence countless watch brands have participated in it. Our James Stacey earlier this year discussed the topic in: “Why Sponsor A Formula 1 Team?” article here

Some watch companies spend as much as 60% of their revenue on marketing. Most all of them dedicate significant portions of their income to marketing efforts designed to make people aware of their products and to help position their brand as an equal, or as more excellent than their competitors. Market statistics (at least in the United States and Asia) indicate a very strong correlation between the amount of ad dollars spent in a region and high-end watch brand’s success in that region. Taken together, the resulting message is that watch brands both understand marketing is important, and strive heavily to fund it.

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But is watch marketing – specifically, that area of marketing related to the more expensive high-end brands – working? Sure, some of it works wonderfully, but the real question is whether or not the industry as a whole is using the most efficient and effective tactics available in order to assist consumers to both discover, and help select the watches they want to learn about and eventually purchase?

The purpose of this article is to ask questions about an industry I work within, and to illustrate various experiences, quotes, and discussions that I’ve observed or participated in over the last several years. As an outsider coming into the watch industry around 2007, I immediately noticed some odd things, compared to other industries. Eventually, I began to better understand many of the peculiarities about the watch and luxury industry, but I’ve never been able to shake that feeling of “it could be done a lot better.”

Is Luxury Watch Marketing Failing? Featured Articles

Luxury watches are often highly complicated items – it is this high level of complexity and refinement that is difficult to be transmitted through short, impulsive messages

Outside of when people or companies ask for my advice or consultation, I’ve stopped offering specific feedback to watch brands on their marketing practices. That is because I have inadvertently insulted many people who were working in that area for a lot longer than myself, and because I came across as cocky or that I knew more than other people. Such complications no doubt get in the way of anyone’s idealism, but it has also given me an opportunity to step back and observe the marketing efforts of the watch industry in a more detached, mature, and open-minded manner, without feeling it necessary to always comment. On that note, I’ll proceed with certain questions and observations about the effects of current watch industry marketing that I’ve noticed come up over the years.

There is an important challenge in regard to marketing watches that most (at least many) other advertised products do not have. Watches – unlike, say, beer – do not automatically have a demanding consumer base. People generally want beer, and while demand fluctuates, beer companies don’t really need to tell consumers “here is why you want to drink beer.” Instead, beer companies have the difficult goal of telling people “why you should drink our beer.” With watches, the challenge is great. Not only do watch companies have to tell people why they should buy a particular watch, but also why they should buy a watch at all.

Jean-Claude Biver, the former CEO and now Chairman of Hublot, famously quipped that no one needs a wrist watch. He was referring to the fact that the antecedent reason for owning a timepiece no longer exists. People no longer strictly require a watch to know the time, and in most instances, someone’s timepiece isn’t even the most accurate means of telling the time on their person – even if it is the most convenient. This might sound obvious, but just a generation or two ago, owning a wrist watch was as crucial as having a toothbrush and shoes.

Is Luxury Watch Marketing Failing? Featured Articles

An ad from a time when watches were indeed indispensable. Watch vs Accutron: Advertisement For Railroad Approved Accutron Timepieces, Noted For Their Superior Accuracy

Facing the dilemma of potential obsolescence, first in the face of inexpensive equivalent competition (quartz watches) in the 1980s, mechanical watch companies decided to go “high-end.” In the late 90s and early 2000s, high-end watch companies faced yet another foe: the ubiquity of the mobile phone (which indicates the time). This prompted them to go even higher-end. Pretty much, the only way to compete in a market of effective cheap stuff is to distinguish your product as being classier, better made, more exclusive, and “the type of thing rich and famous people with good taste own.” These aren’t bad tactics, in theory, but actually achieving it is complicated and less than straight-forward.

Is Luxury Watch Marketing Failing? Featured Articles

In the face of marketing complexity, the watch industry has a secret weapon. One of the biggest assets of the watch industry is the existence of serious watch collectors. Few industries have such a developed, well-funded, outspoken, and sophisticated base of consumers who are passionate about their products. Watch collectors are an extremely valuable asset, not only because they represent people who do not need to be convinced to buy watches, but because they are able to offer meaningful feedback that can help brands monitor their own marketing initiatives, product development, and outward-facing personalities. Watch collectors may be anything from finicky to verbose, but they are a group that any watch brand can rely on to be knowledgeable and responsive – as well as likely buyers.

One of the problems I see in contemporary watch marketing is that watch companies often tend to ignore watch collectors when they are developing new marketing campaigns. Of course, that isn’t a universal truth, but too often collectors are put in a position where they view a message by a brand they are emotionally connected to, which clearly doesn’t speak to them. Watch brands do engage regularly with their top collectors in a very meaningful manner, but it isn’t enough to keep most companies alive. While watch companies no doubt need the revenue stream of a wider audience than highly niche-educated collectors, they might be wise to consider those collectors akin to shareholders when making decisions that affect the image of a brand.

Is Luxury Watch Marketing Failing? Featured Articles

The CEO of Audemars Piguet, Mr. Francois Bennahmias,  recently exclaimed to me that, in his opinion, the most powerful tool any serious watch brand has was the “manufacture visit.” I’ve been on many of these factory tours to Switzerland and can attest to the fact that they are extremely powerful ways of having someone connect with the brand. Not only does someone get to experience the location and methods behind how a watch is made, but they also get to experience the people and culture, as well as often the history, behind how a brand’s watch are made. The trick, of course, is in being able to communicate the key elements of such a personal visit with the public at large.

If taken literally, the advice from Mr. Bennahmias would be that watch brands should take careful note of all those little stories, details, and qualities which help people emotionally connect to their products and brands, and then cleverly dispense them via a series of marketing campaigns designed to create a close relationship with a customer. This rarely happens.  What does end up happening is sort of ultra-consolidation, where all the allure of a company, its products, and history are distilled into a few simple messages or images. They frequently fail to properly communicate with people who are eager to understand a brand and develop a relationship with them.

Is Luxury Watch Marketing Failing? Featured Articles

A rather generic looking fashion-watch advertisement – the same “message” and layout is often translated into luxury watch ads

Modern luxury watch brands, in a large way, are influenced by the luxury fashion industry. What has been communicated to me is that the watch companies, in an attempt to become more “luxury” on a mainstream basis, have turned to lessons from companies selling expensive clothing, jewelry, and other accessories. These non-mechanical items have focused on visual imagery, style, and lifestyle as a means of positioning their brands and products. The question is whether or not watches are more like clothing, or perhaps something else, better suited to a mechanical device that in part is being sold on a degree of lasting value.

Clothing, whether it is luxury or not, is inherently ephemeral in the majority of its marketing practices. Fashion is about styles, trends, and what is popular for a limited period of time, until something new comes [next season]. I suppose you could apply this to watches, but I’ve never heard of any watch consumer who accepts the idea that their luxury watch should be something that is meant to be worn for a single season only. Granted, watch companies would love the idea if people purchased several new watches per year to go with the latest fashion trends, but such a desire would not comport with the demographic of most high-end watch buyers that tend to be men (who, while perhaps highly fashionable, tend to be more consistent in their style over time).

Is Luxury Watch Marketing Failing? Featured Articles

Not just watch brands are loud about their heritage

While watch brands may have “fashion on their minds” when contemplating marketing decisions, they also like to preach the value of heritage and timelessness. These qualities, in many instances, are mutually exclusive from the idea that something is meant to be worn on a temporary basis only. Luxury watches also differ from fashion because different mentalities are at work when appreciating the desirability of the items. The guy who is interested in watch movements and car engines, isn’t likely to be the same demographic that watches runway shows and is interested in the style section of the newspaper or websites.

What clothing and watches do have in common is that they both have a massive communicative element to them. Watches and clothing are primary ways people send signals about their taste, social and economic status, as well as their lifestyles. Fashion, unlike a timepiece, is nevertheless necessary in the majority of social instances. Watches are optional luxuries, while clothing is something that people are going to wear either way.

That goes back to the previous argument about demand creation versus demand satisfaction. The fashion world is mostly in the business of demand satisfaction, while the watch industry, like that of other “connoisseur” pursuits, must strive to create demand, and only then seek to satisfy it. It is a very important distinction, and one that, in my opinion, the watch industry needs to focus on a lot more. While in certain cultures, watch demand is much higher than others (say, in parts of Asia), it is a wise decision for watch brands to focus on three very important message types in their marketing activities. The messages are: 1) why people should want a high-end watch, 2) why people should want something from your brand, and 3) what are the various elements of appeal in your individual product lines. Ideally, these messages are spread out over time and communicated separately, in order to make the biggest impact.

It isn’t news to most major watch brands that the traditional display advertising tactics they have used to market their watches aren’t as highly effective as they would like. One of the major reasons behind that is how marketing campaigns are produced in addition to the existence of “new media.” Some message campaigns are designed in-house, while others are the product of relationships with outside marketing and creative agencies – who, understandably, aren’t as knowledgeable about brands as the brands themselves. Timepieces are incredibly difficult to fully appreciate, and mastery can take many years.

Is Luxury Watch Marketing Failing? Featured Articles

Online advertising is complicated for most types of companies, which means the typically slow-to-adopt-novel-concepts Swiss watch industry is at an even greater disadvantage when it comes to the newest area of marketing for the luxury watch industry. Online advertising success requires a range of elements in place such as having a conversion goal (basically a planned path consumers will take from initially seeing an advertisement to eventual purchase), as well as having sheer mastery over the message an advertiser wishes to make. Arguably, most watch brands of high esteem have neither of these elements in place.

A tactic employed by some watch companies wishing to sidestep their own shortcomings (that they are most always cognizant of) is to simply work with voices they feel understand internet media better than them. This includes hiring some members of the online watch media as well those who they feel are proficient in the area of social media to discuss their brand or products in a sponsored fashion (whether it is explicitly stated or not). This tactic is becoming more popular in other industries as well, but experts frequently advise against it. While it can yield short-term gain, the long-term outlook is less rosy. In addition to brands leaving their reputation and image in the hands of other people, the larger danger is in the consumer response.

Consumer trust is a huge issue in high-end watches. Trust and integrity are two of the most important qualities consumers look for in the watch brands that they wish to invest their own money in. Consumer awareness of a brand paying a member of the media to communicate or feature their products can highly degrade consumer trust. This is a larger issue, but the bottom line is that brands should focus on authentic relationship building and more transparent business relationships with media in order to preserve the incredibly valuable commodity that is consumer trust.

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  • Borys Bozzor Pawliw

    Very interesting article: and that word ‘douchbaggery’ goes into my dictionary of common phrases…

    In all honesty, very, very few watches on this blog serve their primary purposes cost effectively, There are cheaper ways to tell the time more accurately than at least 95% of the watches portrayed here. But that’s not the point. This blog is to guys what a high end fashion blog is to successful women. here we see our Prada, Escada, Givenchy, Hermes…it’s about style and status. And I worship the Swiss mechanical watch industry for convincing so many that there is value in a very expensive mechanical watch that costs way more to buy and maintain than a quartz equivalent, that will almost certainly be less accurate and less reliable. But if it makes the guy we don’t like envious…damn, I feel like a bitchy schoolgirl…

    But now, we have economic headwinds: and every man and his dog has jumped onto the luxury watch bandwagon during the pre GFC days and also the post GFC days as the Asian boom continued with all this free cash., But now, there are real economic headwinds and suddenly, there is likely more product than demand. Sure, collectors are a different breed, but true consumers are the bread and butter…and right now, especially in Asia, they are suddenly being more cautious.

  • Great article. I don’t really have anything useful to ad, I’m not an advertising genius, and adverts /of any kind) rarely work on me at all. I love watches, and always have, so I work in the opposite way: instead of ad bringing me in, I go out and seek the information.

  • ScubaPro

    No. Luxury Watch Marketing is not failing. Next question.

  • Twinbarrel

    It should not be complicated or difficult for watch brands to connect with its collector targets. Every collector is actively present within every watch blog, watch magazine and likely available data from the brand itself, AD’s and other watch retailers selling vintage and new. Instagram has indeed collectors exposing themselves as such. I believe most of us here are collectors (aspiring, budding, modest or hoarding – lol ) and are on one or more lists that could be targeted for ‘direct’ marketing. Some brands do it very well. One example: Vacheron has a very exclusive member club that invites you to become a member. You could submit your watch details (vintage or new) but you don’t need to. If you do, you move up to a next tier of exclusivity and as such you would feel more associated with the brand itself, much like a tour through its brand house of manufacture. There are other brands doing a similar thing. Some with success and most others trying but fail in making it user friendly or not offering benefits, ie. forum-like communication with other members, not showing additional interesting info we don’t already have or often nothing at all so it seems just a submission of personal data. The latter puts me off. If their marketing department follows through (some do) then one can expect personalized mail, e-mail and should also be sent promo-products further enhancing the brand connection. These promo-products (key-chains, pens, golf hats, T-shirts etc…) can normally only be had when going to a trade show or other brand gathering. I’m guessing 99% of these products are given to people who don’t even really care for the brand specific or about timepieces whatsoever but like the giveaway of an upscale brand (any brand). The members of these brand clubs are most often too busy attending these events but would proudly wear or carry your brand giveaway and, aside from feeling appreciated would also verbally promote your brand when someone would comment on a brands keychain, hat and t-shirt etc…
    This is clever because collectors often collect various brands before they feel a connection to one brand exclusively.
    It doesn’t stop there. It takes a lot of marketing to get someone to come into a boutique or AD for specific piece or selection. Earlier this year I walked out of a boutique (won’t say which) and left completely dis-enamoured about this brand because the staff did not seem to care about me or had a bad day. I know this is silly because it is one person working for a huge brand but it’s how the experience popped the balloon and purchased from another brand boutique. This happens in the car industry also.
    So that’s my take for brands to targeting collectors.
    For Non-collectors, I agree, it is very difficult and you have to be everywhere or you’ll be forgotten. 60% of a brands profit is probably what keeps your brand in business.

  • Howard Roark

    Great editorial. Market(s) contextualized terse astute observations..

  • Fraser Petrick

    The watch culture is a dog’s breakfast of thresholds, muddled up with emotions.
    My $85 Momentum Atlas Series is solid, well built, legible and accurate. It should be the only watch I would ever “need”. But then “want” rears its ugly head. Now begins head-butting with thresholds. How much refinement do you need and how much do you want – and then how prepared are you to pay for it? If you’re shallow and prestige in watches is important to you, how much do you need, how much do you want, and how much are you willing to pay for it? Some people respond to marketing; others resist it; others think they are resisting it…no matter; the whole phenomenon of watch ownership is a muddle of emotion, character, self-image, self-esteem. And then there’s the whole “crow factor”, as in (from The Secret of NIMH): “ooo, sparklies.”.
    Mea Culpa: I may have a sensible Momentum Atlas Series, but I still “want” a Richard Mille…”ooo, sparklies!”.Marketers can still chip away at my protestant armour. With the help of Powerball I will undoubtedly crumble.

  • brlumaja

    Rolex does not advertise it’s watches what they do is advertise lifestyle. The best advertisement is placing that watch on the wrist of a celebrity or on the wrists of people doing something associated with wealth such as playing golf. People do not buy these watches for their movements or design but for the “WOW” look what I have on my wrist factor. I love when people on a Rolex forum say otherwise but the thread right under it is 200 pages long of showing wrist shots next to expensive car emblems.

    If I am wrong show me a high end watch ad that explains it’s performance which by the way is what every ad should do. Without this we keep getting more and more complicated movements that are still the same + or – seconds as 50 years ago. What is the difference if it is in house if it doesn’t make the product perform better.

  • mark maftei

    SuperStrapper Ha ha ha. There is a great weekend radio show on CBC in Canada called “The Power of Persuasion” where a former top ad exec goes behind the scenes to tell the stories of past ad campaigns both successful and failed. One of the themes he keeps coming back to is how ad companies test response to ads before they release them. In building focus groups they all agree that the best and most reliable (i.e. honest and unbiased) responses come from those people who claim that ‘ads don’t work on me’, or “I don’t pay attention to ads”. Whether you know or it not, or admit or not, ads work on everybody who hears or sees them. In fact, most of the most successful ad campaigns of all time work precisely by reaching a vast audience almost subconsciously. The proof? I guarantee that anybody reading this right now can immediately think of at least one ad jingle or magazine image from over a decade ago – regardless of the product. 

    Not to turn this quick post into another essay, but I think the issue (not necessarily a failing) that luxury brands face is targeting the media sweet spots where invested ad dollars can reach the highest proportion of potential customers. Patek Philippe may not recoup much if they advertise in some music industry publication, but Audemars Piguet might….A lot of the annoying ‘douchy’ ads we see in our day to day lives in general media publications are specifically there to reach the annoying douche demographic! Let’s face it, a lot of people who buy a Rolex (just for example, nothing against the brand at all) think they are some sophisticated connoisseur, but Rolex sells over a million watches per year, and I guarantee that MOST of those buyers are annoying douches, not suave and classy understated appreciators of brand history and craftsmanship. The trick is making the douches FEEL like sophisticates, which may have the unintended effect of making real sophisticates feel betrayed 🙂

    Great article.

  • Art?ras Adomaitis

    Mechanical timepieces have survived competition of quarts movements and with some loses will survive “smart” revolution also. Thing is that luxury watch it’s more accessory, status and achievement symbol than time indicating device, and its high price is partly validated though the complexity of movement, heritage etc. Smart watch simply cannot do so because even in golden case it will look unreasonably expensive and not very exceptional. So in my opinion luxury watch marketing task is to keep this image of status accessory alive as long as possible.

  • Ha ha ha
    I’m Canadian too. I remember all kinds of commercial 10 years and older, but I’ve never drank Molson, eaten at Harvey’s, or gotten service at Mr Transmission.
    Remembering an ad does nothing if the person doesn’t actually buy the product or service, so that’s not them ‘working’.

  • wstephens1

    Great article but high end watch companies are missing the boat. We currently live in a world where the rich are getting richer and the poor getting poorer. You mentioned earlier that some manufacturers have unsubstantiated price increases. Tag heuer for example . Good watch not worth the price. Rolex has the best idea with Tudor. Make your product available for more people. Who in turn will stay with your brand. Everyone likes quality.

  • Shawnnny

    High end watches, are all about emotion and a personal connection with something that is pleasing to the eye, with exclusivity thrown in there for the really highend stuff. As long as people have the money for them, people will buy them. Watches also provide a connection to the past, a time when life was much more simple and when we weren’t being drowned in technology. And, technology is pleasing to the eye.

  • WillyChu

    “60% of revenue spent on marketing”
    What if, instead, only 10% were spent on marketing and the prices then were CUT IN HALF?!
    How many more of us would but a Rolex Submariner Date for $4,275 instead of $8,550? An IWC Portuguese Chronograph Classic for $6,500 instead of $13,000? Heck, even a rose gold A. Lange Saxonia Annual Calendar for $24,200 instead of $48,400?
    Is there anyone who doesn’t think sales would sky-rocket?!
    I would love to see that experiment!
    P.S. Or is it the perverse case that much of the inherent “value” of a timepiece is how overpriced it is, thus seeding the idea that Brand X must be the real deal because it is so expensive? If Tudor came out with a watch that was an exact copy of the Submariner at half the price, would people complain it was overpriced for a Tudor brand watch?

  • Michael Pucci

    Marketing for watch companies will become even more challenging. We must think of the future buyers and the future watch collectors. However seems this next generation is all about disposable luxury. According to Forbes the new Young Rich ( Millennials)  aren’t driven by money or traditional status symbols. Gone are aspirations to acquire the must-have brand-name purse and thousand-dollar bespoke suit. They don’t seek to drive a BMW since that is the car they had when they were 16-years-old. They don’t see money as a way to show off. They don’t flaunt it or need to impress others,” And they aren’t saving their money for a rainy day. “They grew up watching their parents or older brothers and sisters struggling. They saw that playing by the rules doesn’t really work, so they want to have fun while growing up and they will forever look at luxury in a different way.

    Look what is happening with Louis Vuitton , Prada & Gucci. Prada reported a 21 percent drop in first-half profit as sales grew at the slowest pace in three year. They are having huge problems and must introduce lower priced items that is more accessible thereby alienating their high end consumer. 

    Problem with the “current watch” industry is they are marketing followers not leaders. Sure there are the great designers and the great corporate leaders – but where is the industry “marketing genius”? The Icon who could make the paradigm shift like Thompke did in the 80’s?  Remember Ernst Thompke ? The only true Swiss marketing leader who was a real marketing genius!  
    Thompke brought the Swiss watch industry back to its rightful place after a couple decades of loosing its share to the Japanese quartz revolution.  He created the Swiss watch paradox; low price = high image by giving luxury a new price position. 

    SWISS + WATCH = SWATCH – That was REAL marketing! He understood the mind of a consumer whether they had in their pocket $35 or $35,000 he created the illusion where they both felt the same exhilaration when purchasing a Swatch. The industry needs a new marketing paradigm shift not a marketing strategy.

  • bahoomba2014

    Not all watch marketing fails – it’s both encouraging and disgusting that a home shopping network, ShopHQ (formerly ShopNBC), has built a seemingly large segment of watch fans by utilizing over-the-top sale pitches and more gimmicks (“free” plastic watch boxes, numbered “exclusivity”, etc) to hawk their affordable watch brands. What’s troubling is that most of the brands – and one in particula –  are horribly made, garishly designed (and usually comically oversized) watches, and it’s been well-documented that one brand in question has some of the worst customer service imaginable.

    Yet, this type of direct marketing – which informs consumers of new products in a direct way, using plain language – is exactly what the watch industry needs. Its luxury ads usually tend to scream out, “if you’re not wearing this, you’re not part of the ‘in crowd,'” and in a post-recession society (particularly in the U.S.), coveting and spending for spending’s sake are so 1990. Instead, the better watch brands could use direct-to-consumer and over-the-top video marketing to show the QUALITY of their products, the care used in producing them, and the both tactile and inherent benefits of owning and using a fine watch.

    Imagine this: A fine Swiss brand using a TV shopping platform, and, instead of acting like a bunch of carnival barkers a la ShopNBC, presents good products, shows how and where and by who they are made, and offers their new customers an opportunity to get into a serious  relationship with the time-honored and enjoyable craft of watchmaking.

    Imagine the possibilities.

  • PilesOfWatches

    Though watches are important items to wear on your wrist, even today, they represent an inherent psychological need beyond the obvious adherence to schedule.
    As a friend said recently, “know one gets out of this life alive”. Time comes for us all. A mechanical watch is a living thing. It requires care and attention, or it will die. A metaphor; perhaps.
    Much like the short lived battery in the Apple Watch strapped to the wrist of the everyday Millenial, the all important power reserve represents a beating heart that gives the wearer the power of ‘life’.
    We will always be attracted to time telling wrist art, that requires our care in an attempt to transfer the weight of our own subconscious question.
    In short: Will it Fail? No. Will it change with each generations perception of self? Absolutely.

  • bahoomba2014 

    I know this is not the answer but we are experimenting with short 1-2 minute fun short stories about new watches- we can also create  serious stories ones for TV . 

    We are making the “watch” the hero and not the actors.

    Just some food for thought.

    Take a look just finished  this: 
    http://youtu.be/u-q7qgAj4-k

  • Shawnnny

    I’m sorry, I meant to say that technology is NOT pleasing to the eye. Damn iPad!

  • SuperStrapper I agree. I’ve seen far too many feminine product ads and I certainly won’t be buying of those products either. (refer to spoof ad I did in the comments section of this Bremont post: https://www.ablogtowatch.com/chivas-12-made-for-gentlemen-by-bremont-limited-edition-watches-gift-tin/ )

  • spiceballs

    SuperStrapper  Also agree.  I can still recite an ad on “Robinson’s Lemon Barley Water (and Vaseline Hair Tonic) that came out 30+ years back but I have never drunk (or used) the stuff!

  • iamcalledryan

    Thought provoking and the answer, as you allude to, has no right or wrong answer – because it will fluctuate wildly. Some brands are winning, others loosing. Brands have a lot of goodwill to fill the gap between cost and price, and marketing it right helps them get it there. You didn’t talk much about the likes of SIHH, BaselWorld etc which I think are the ideal opportunities to market to collectors – are they doing it well enough there? Ari to decide!

  • iamcalledryan

    yes the Rolex/Tudor point is a good one. Nothing else similar in the watch world that I know of. Although Rolex is so big it is more comparable to the likes of Richemont, Swatch, and LVMH, which ARE kind of doing just that.

  • From what I read, in the past 5 years watch sales are up and watch ad spending is up. So is advertising failing? Not that you can tell so long as they keep passing the cost on to the watch buyers and they keep buying. If the question becomes, is it effective (as in cost effective, reaching the potential customer, etc.) then it’s harder to say. 
    It would be interesting for a brand like Rolex to stop all advertising for year worldwide and then see what effect it has on sales. Not that they would lower prices of course! But long term, they would never stop spending to be in the public eye, so wasteful as it may be, high priced watch ads and passed on costs will continue to reign. 
    That does not mean that advertising can’t be more effective or tuned, but it surely won’t go away. And so long as a brand sells and cover ad costs with high watch costs, I don’t know that they are overly concerned. 
    But personally, I do worry about all of this was I’m about to advertise next year in a British polo magazine. I feel like I’m rolling the dice when it comes to a future return on investment. Time will tell.

  • MichaelPucci

    MarkCarson Watch sales  /  imports may be up – but how are the sales being made is the first question? There seems to be a lot of product in the market – and not on the wrists of consumers. The watch industry has a way of creating an illusion if it wants to –  but soon the wells will dry up. 

    I agree the costs are going up to the end users- but whats going out the back door is the second question. When the smart watches arrive there will be a boondoggle that will have to be dealt with for a couple years.

  • iamcalledryan SIHH and BaselWorld are not for end customers. While BaselWorld is open to the public, they don’t get inside the Hall 1 booths to see watches hands on. Only”buyers” (retailers & distributions) who will order watches for the year and members of the press with appointments get past the front desk. The public is confined to looking at watches through glass displays on the outside of the booths. So individual collectors are not well received at BaselWorld by the big brands. In Hall 2 where the small brands are, that changes quite a bit. SIHH is an invitation only show so they are even less inclined to talk to individual collectors unless they are already know to a brand who may invite them.
    Are these watch shows a lost opportunity for direct contact with collectors? Probably so. But since watches are basically not sold at the show, the big boys are just there to fill their order books and get some press coverage. I’m not saying this is right or wrong or good or bad. Just an observation is all. Cheers.

  • 5803822

    I imagine ROLEX could answer the question as regards the effectiveness or otherwise of advertising, with the most number of retail outlets available to them it is almost certain they have questionares for their retailers to complete regarding the reason(s) each and every buyer is completing a purchase of one of their products eg gift, upgrade, replacement, with reference to any form of advertising which may have affected their choice – but of course, being ROLEX there is no possibility of an answer. 
    One thing I’m almost certain about is that less than 1% if ABTW readers have been affected by an advert – as watch lovers, advertising is water off a ducks back.

  • outremer

    The best marketing tool is quality and the biggest problem with the watch industry is twofold: constantly rising prices and failing quality control because of the high production numbers..

  • SantiagoT

    Great article Ariel, muchas gracias.

    I think watch advertising is the same as car advertising: it’s all about aspiration, and doing better is in our nature. If I like the Speedmaster (and “liking” is the first relation we have with products, “knowing” comes after and most times is not as important) I will do what I can to buy it, and in the meantime I will read whatever comes across about it which will reinforce my original desire. And when I can I will spend those hard earned Euros to buy the watch, even if in reality what I must have bought is, say, a new sofa. 
    So if we look at how good Richmont Group is faring we can say that at least they are doing it right. JeanRichard has Nick Walenda as “friend” of the company. Is that ambassador beneficial for the company? I’m sure the effect is not as clear as AP having Lionel Messi (even if can hardly speak his own language). 

    One more thing: “watch companies would love the idea if people purchased several new watches per year” This is what Swatch did and that’s what probably Apple is aming at. Or at least 2 per person -one sporty, one dressy.

  • SantiagoT

    Boy are these some disjointed thoughts or what.

  • Jonathan Ocab

    There was a South Park episode earlier this season focused on ‘Freemium’ games. But in it, they made a reference to alcohol company advertising campaigns. This was the cutaway from the actual ep (mildly NSFW):
    https://www.youtube.com/watch?v=kuGQ7eAXlfY

  • Ayreonaut

    What would happen if they aired the Patek Philippe Grandmaster Chime 10 minute video on prime time TV?

  • Lukino

    SuperStrapper maybe you are just unaware of what kind of marketing you are target or mere vessel… like this one http://www.express.co.uk/news/weird/544409/Grumpy-Cat-worth-more-than-Hollywood-stars

  • Leestar1122

    WillyChu To be perfectly honest, i would gladly participate in that experiment too.

  • wstephens1

    Nothing, the average person has no idea what Patek Philippe is. The people who can afford it are busy making money and are already aware of it.

  • Leestar1122

    Ariel,

    I do apologize that i do frequent your youtube videos but not your blog itself as i tend to be one of those Hodinkee reading watch lovers (maybe partly because i’m an east coaster myself), but lots of compliments on this piece.

    As someone who has been in the Online/Digital Marketing field for many years, i always tend to get those hit myself on the head moments when i see an illustrious brand follow a strategy similar to their traditional methodology. Example, you might find an ad for Breitling, Cartier and even Omega on New York Times print papers, so naturally to most brands it would make sense being online as well However, with today’s capabilities and technologies why not go after a high target end user (which can be done) versus being on a website with only a shred of hope that someone would look at your ad for a split second.

    At this point im inclined to believe that most swiss luxury watch brands are rather stubborn and don’t truly believe in taking huge leaps forward in some of their marketing practices, therefore leading them to continuously spend resources on honing their marketing on a traditional sense. But completely missing out on a large boat going and sailing entirely different direction.

    And yes i do agree that most brands need to focus more on their collectors. Not necessarily bribing them with cool gifts and parties, but standing back and listening to the collectors, and helping them unite more with the power of the brand.

    Thanks for this awesome piece Ariel.

    Truly enjoyed every last detail.

  • wstephens1

    Your correct as a 16yr old watching James Bond. I saw the Rolex on his wrist and was bitten with the watch bug. I have owned a few high end watches but was never satisfied until I purchased my Rolex GMT2? Since then a few others have been purchased but my GMT2 is my favorite.

  • MichaelPucci MarkCarson Just remember…a LOT of watches in retailers’ “Certified Pre-Owned” sections are NEW.

  • 5803822

    A lot of nebulous views expressed here, so a total waste of space  – surely the best person to try to get a few definitive facts is our host “AA” – i.e check with the marketing dept of a/some big player(s) – see if you can get something meaningful – they can obviously remain anonymous

  • Leestar1122 Thanks for the really nice comment. Happy to hear all that and that you connected with the article so well. Your comments are always welcome 🙂

  • LSY

    Hi Arial the answer to your dilemma is simple, truth is in this day majority of people who buy expensive watches just want a piece of jewellery hanging off their wrist as a status symbol, they care not for the workmanship or innovation or the impressive history behind, their only concern is whether their money spent is justified by the recognition (or envy) the watch is able to garner. As such I personally think watchmakers are moving in the right direction  in their marketing strategy, if purely from a business perspective. Their purpose is simply to flaunt the brand and create recognition, as this is guaranteed to win them new clients, not with their craftsmanship, but with their showmanship. After all, it is a competitive industry, survival is key. 
    P. S.  think not the world from the perspective of a watch lover and critic, for the world is often a lot less complicated.

  • Perhaps the Swiss watch industry is right and knows their customers better than assumed here.  I’m no marketer, but let me be the Swiss devil’s advocate as a counterpoint to this article and its comments.

    Mechanical watches are expensive, period.  Even the cheapest ones cost in the hundreds of dollars.  Therefore, the target consumer of the industry is middle class and up.  For those watchmakers whose products cost in the thousands of dollars, I’d wager that the target socioeconomic demographics is upper middle-class and up.

    The absolute majority of young adults are not found among the upper middle-class.  Their consumption upper limit is high-end cell phones, whose prices top where fine watches’ start.  Even then, such phones are seldom acquired outright, but financed, directly or indirectly through term service contracts, for almost as long as a car could be: a couple of years.

    Even affluent adults with children at home are unlikely to vie for timepieces costing thousands, as most are probably more concerned about saving for the children’s colleges with whatever is left from raising a family with reasonable comfort.

    Which probably leaves mostly middle-aged or older, affluent men as the typical consumer of fine watches.  From my perspective, though the younger are comfortable with and likely to even prefer electronic media, many are still stuck in the old media: they still read newspapers and magazines on inked printed on fallen tree pulp.

    This might explain why the Swiss horological industry still favors the old media for its advertisement budget.  They shouldn’t be dismissed as clueless for being risk-avert, a mark of the Swiss.  After all, their posters are particularly prominent in the international wings of airports, but sight unseen in bus stations.  Not to say that it shouldn’t try to lure its future customers in electronic media, but perhaps they’ve tried and the expected resulting sales did not justify the cost.  As expensive as fine watches are and as generous as the profit margins may be, many Swiss watchmakers struggle to make a decent profit.  While many European families became giants of industry, no Swiss watchmaking family could be compared in wealth and influence to the likes of the Peugeot or the von Siemens families.

    Again, I’m using my instincts here.  I’m probably wrong in the particulars of the watch industry, which I’d welcome being properly informed about.  But I don’t think that I’m too off the mark in my take here.

  • emenezes I agree except to say that there are some Swiss watch industry people who are worth either side of a billion USD and more than enough with over $100,000,000 USD.So some of them are earning a profit despite the cost of advertising. Cheers.

  • contrejour

    ” The term “douchebaggery” has been used by myself and others to describe many of the ways third-party incentivized social media voices portray themselves online. ”
    —- 
    I know what you mean 😉
    There’s Lux and then there’s faux lux. True lux isn’t advertised at all. It’s the carriage trade, occurring in the private salons of the artisan and paraded in private showings.
    You’ve confused true Lux ( AKA De-Lux) with Faux Lux. Faux lux is the entire gradient of products from so-called limited editions to garden variety ‘fashion’ pieces posing as luxury. 
    It’s now clear that in-house manufacture is in jeopardy. Incoming Zenith chairman’s remark earlier in 2014 about how customers are not nearly as interested in the movements as they are in the styling aesthetics is telling
    I don’t believe marketing  has anything to do with it. however.
    The customer demographic has shifted.
    Many faux lux customers have stopped spending their play money as their collections are straining their ability to store them all  and a general air of disenchantment with the sheer number of available products every year is causing watch buyer burnout.
    Further. The low end fashion brands have exploded – proving that outside the aficionados, that make up a minority,90% of watch sales are now below the $400 pricepoint! In otherwords, Michael Kors, (Fossil/Movado Groups)  etc are winning on cheap watches alone!
    This has been the result of extraordinary improvements in aesthetics design and fabrication.
    At 1Meter all watches look the same quality.
    Think about that.
    The Carriage trade in true lux watches, however- continues unabated.

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