The rise of social media has become a go-to source for the advertising industry with companies spending billions of dollars annually to have their products and brands plastered everywhere consumers look. With 200 billion dollars being spent on advertising in the United States in 2016 alone (Statista, 2017), it’s rare to see a company that spends little to no money be successful. Daniel Wellington, or DW, is a watch company that brands itself as minimalistic and elegant, selling expensive-looking watches for a very low price. DW founder Filip Tysander refuses to pay for advertising, instead following a business model that relies strictly on popular social media influencers to promote his product. A relatively new company founded in 2011, DW has made a name for itself right up there with top competitor Rolex, who spends $56.38 million a year on advertising (Europa Star, 2016), among others. By using social media, celebrity endorsement, and word-of-mouth marketing, Daniel Wellington has showed the influence social media has in order to create a globally-recognizable brand.

While other watch companies spend millions each year on commercial and print advertising, DW relies solely on social media. Social media is the key driver in the apparel and fashion industry, so the DW business model relies on such platforms to gain exposure and increase sales. Instagram is the most popular platform for the fashion industry because the pictures and videos used on the app appeal directly to consumers’ limbic brain. In exchange for pictures and mentions on their own personal social media pages, DW gives top social media influencers, bloggers, and celebrities a free watch. For example, DW gave Kendall Jenner a free watch, and in return, she posted a photo of her wearing it on Instagram. DW, whose watches range from $149 to $299 (Investopedia, 2015), had instant exposure to Jenner’s 77.7 million followers (Instagram, 2017). Jenner is one of the most widely-known celebrities on social media, and her promotion of the watch and brand, along with other prominent influencers, propelled DW as one of the top watch brands in the world. After investing only $24,000, DW reached $70 million in sales in 2014 (Business Insider, 2015). The following year, the company’s revenue reached $170 billion with an estimated projection of $220 in 2017 (Next Shark, 2016).

Daniel Wellington has taken the watch business—and the advertising industry as a whole—by storm. Although watch brands have recently followed DW’s lead by increasing their social media presence, their reliance strictly on social media has changed the game. They don’t have ads in magazines, commercials on television, or billboards in big cities. Instead, they use direct engagement with a variety of social media platforms as well as encourage user-generated content to gain exposure. “If you go back to 2013 I had no idea the company had the potential to grow to its current size, but today it’s part of my everyday life,” said Tysander (Business Insider, 2016). Social media has become part of our every day life, and Tysander capitalized on that notion. By using celebrities and media influencers to showcase their watches, Daniel Wellington was able to create a successful global brand through the power of social media.

Author: Victoria Andreakos (University of Vermont) – senior at the University of Vermont majoring in Business Administration and minoring in Economics.

Advisor: Rob Williams, Ph.D. (University of Vermont); Professor of Media/Communications.

References:

Byttner, Karl-Johan. “This 31-year-old Who Couldn’t Afford a Rolex Has Built a $180 Million Watch Empire in Less than 5 Years.” Business Insider. Business Insider, 14 June 2016. Web. 03 Apr. 2017. 

eMarketer. (n.d.). Media advertising spending in the United States from 2011 to 2018 (in billion U.S. dollars). In Statista – The Statistics Portal. Retrieved April 3, 2017.

General, Ryan. “How a Man Who Couldn’t Afford a Rolex Built a Cheap Watch Empire Worth $180 Million.” NextShark. Nextshark, 20 June 2016. Web. 03 Apr. 2017. 

Kantar Media. “Who Are the Biggest Spenders in the Watch World?” Europa Star. Europa Star, 16 July 2015. Web. 03 Apr. 2017.

Parker, Tim. “Watchmaker Daniel Wellington’s Business Model.” Investopedia. Investopedia, LLC., 28 Sept. 2015. Web. 03 Apr. 2017.