Watches have become very hot again the last few years.
Brands like Rolex, Omega or Breitling have been around for a long time. I’m not a watch guy, but apparently, these watches start at $500-$1,000 and go up for the fancier models 🤑
That’s a lot of money, which is what triggered the two founders behind MVMT. Since they couldn’t find stylish watches that wouldn’t break the bank, they would do it themselves.
So that’s what they set out to do with MVMT: sell stylish watches at a lower price point.
That turned out to be a good bet. In 5 years, they went from 0 to $80M in annual sales.
In this article, we’ll take a close look at the part Google Ads plays in generating that revenue.
The MVMT Business
Both of MVMT’s founders had prior ecommerce experience, and one of them had launched a successful crowdfunding campaign.
So that’s exactly how they launched MVMT: an Indiegogo campaign that raised $300,000 in 50 days.
That showed they were onto something, and it gave them the breathing room to start building their business. (A strategy we’ve seen for a couple of brands in our Google Ads Aces series.)
These are still impressive numbers, but it means they missed their 2017 revenue target. Which probably means growth has tapered off.
That’s mainly because of more competitors coming into the watch space.
(Sidenote: If you’re interested in this space, be sure to read this hilarious guide on how to start your own minimalist watch brand 😂)
The main reasons why the business had seen such growth was the focus on building a great brand, executing that perfectly on Facebook (organic and ads) and later branching out into other channels Instagram and YouTube, as we’ll see below.
This rapid growth attracted the attention of acquirers, which resulted in a sale of the company in October of 2018 for $200M.
That concludes the backstory, now let’s dig a little deeper into the numbers!
Mvmtwatches.com Traffic Analysis
During July ’19, the MVMT watches website got 1.17M visitors.
These visitors came from all over the world, with almost half for the USA:
The traffic sources are also a mixed bag:
- Search: 40%
- Direct traffic: 31%
- Social: 25%
- Referral: 2.5%
- Display: 2%
- Email: 1.5%
When it comes to social, Facebook still drives 52% of all social traffic while Instagram only clocks in at about 3%. They do have a big following on both platforms.
Interestingly YouTube drives 40% of the social traffic, which works out to about 117k visits /mo. Since the MVMT YouTube channel is pretty small, a lot of those clicks either come from paid ads or other channels promoting the brand to collect affiliate commissions.
Of the search traffic, 75% are organic visitors and 25% are paid visitors.
Which amounts to about 117,00 visitors.
MVMT Google Ads Campaigns Overview
Here is an overview of what MVMT spent on Google Ads during July 2019:
Google Search Ads
MVMT is advertising in a lot of different markets.
The US makes up about 40% of all paid ads with Australia and Canada both taking another 7%.
The rest is spread across a lot of different markets: Germany, Spain, United Kingdom, Netherlands, etc.
None of the ads are translated into the local language, which makes managing those foreign campaigns a lot easier, but also less effective.
Branded paid search
Top 10 branded keywords (sorted by traffic they bring to mvmtwatches.com)
|mvmt watches men||135,000||$0.27||6,345|
|mvmt watch review||22,200||$0.50||1,043|
|mvmt watches women||18,100||$0.34||850|
|mvmt watches review||8,100||$0.68||568|
|mvmt discount code||2,900||$3.64||136|
From this list, it’s clear that they started selling mens watches. “Mvmt watches men” gets 10x the searches vs women.
They only started selling women’s watches a couple of years in, so that’s definitely an area they can further grow in.
Next are the huge search volumes for reviews. There is a lot of BS in the watch industry. So it is interesting to see that MVMT is capturing so much of the traffic to expose them to their own reviews.
Interesting to see “mvmt sunglasses” in spot #9. This is a new product category that was only launched last year, but it is already well searched for.
The ad below shows up for a core brand search: “mvmt”:
Not a bad headline.
That “Official Website” works well, especially since there are a lot of other sites (like Amazon) that are selling MVMT watches.
“The MVMT is More Than Watches” and “No Longer Just a Watchmaker” allude to other products, but what these are isn’t clear from this ad.
But since this ad is appearing for their brand (and people already know them), it spikes the curiosity and gets a click. On a generic search, this probably wouldn’t work.
To celebrate their anniversary, they customized the ads, clearly indicating the sale and a 26% discount.
As the promotion came to an end, an extra line pushed the urgency a bit harder.
This is a pretty good tactic to squeeze everything out of your promotion. But it might come at the expense of more focused ads (that get a higher CTR).
Their ads also show how to do ad group level sitelinks well.
Here are the sitelinks for an ad that appeared for “mvmt”:
These promote the main product categories: men’s and women’s watches and sunglasses.
And highlight one of their best-selling watches: the Chrono.
A search for “mvmt watches” shows the following sitelinks:
These add an interesting feature to people thinking about a mvmt watch: “Interchangeable Straps” into the mix.
All of those top keywords use the homepage as the landing page.
This is ok for core brand searches, but if people are looking for things like “mvmt sunglasses”, it will be less efficient.
Sometimes that’s done because the category pages aren’t very conversion focused (or don’t tell the brand story). But in this case, I think those pages do the job well:
MVMT has probably tested this, but I think it’s something to reconsider.
Non-branded paid search
Top 10 unbranded keywords (sorted by traffic they bring to mvmtwatches.com)
|watches for women||90,500||$1.69||4,253|
|blue light glasses||90,500||$3.01||4,253|
|sunglasses for women||40,500||$1.61||1,903|
|black watches for men||14,800||$1.98||192|
|rose gold watches for women||9,900||$1.36||465|
MVMT is advertising on some very high traffic keywords.
Men’s and women’s watches seem like a good fit if they can make the numbers work. (Check the Scoreboard section to see if they can!)
But there are others in the list which are quite a stretch for them to get right.
Let’s start with “blue light glasses” at $3 per click.
Which lands here:
This landing page is ok, but as soon as you click through on a product, the “blue light” angles disappear completely.
Compare that with Warby Parker that has a special landing page for these clicks:
And it pops up again during the checkout:
MVMT has neither which makes it harder for them to effectively convert these searches.
The “gunnar glasses” are the only competitor in the list. They are mainly focused on gaming-specific blue light glasses, so it is interesting to see MVMT trying to compete for a different segment of the market.
Another super high volume keyword is “glasses” at $5.38 per click.
It’s clear they want to expand into another product category, glasses are a huge business after all. But it would be interesting to see how well they can leverage their brand to compete against the likes of Warby Parker.
MVMT Shopping Ads
During the research into MVMT’s Google Shopping Ads, I noticed a couple of interesting things.
A search for “watches” triggered the following ads:
Pay close attention to the name of the store (in green): MVMTwatches.com.
This is also the name of the Google Merchant Center account.
A search for “mens watches” showed the following ads:
Note the different store name in green: “MVMT”.
That means that they are delivering ads from two different Google Merchant Center accounts.
A different GMC account can be used if you’re selling in multiple countries, but in this case, both ads were targeting the US.
On the surface, that might not look like much, but it got my interest 🙂
I discovered that the “MVMT” account is MVMT running its own Shopping Ads.
The Shopping Ads that appear with the “MVMTwatches.com” account are run by a shopping aggregator called Connexity.
The way they work is as follows: MVMT uploads its product feed to Connexity’s platform, which distributes to comparison search engines like Google/Bing.
This is an approach some brands will use to expand their reach at a low overall cost. You can see that the product listing ad for “watches” only appears in the 9th spot, likely a bit cheaper than positions 1-5.
Besides Connexity, MVMT is also featured in the Shopping results through Amazon, where it sells, and other retailers running ads for MVMT watches:
Since all properties are essentially controlled by the company it would be interesting to see what kind of optimizations they do to maximize profit and limit ad spend.
This could potentially allow them to show in more ad slots than they could do on their own. Another example of that on a search for “sunglasses for men”:
One last interesting example of this double GMC account is this result:
The product in the pink box is identical to one where the arrow is pointing.
But one of them has a 29% lower price! This could be the remains of a promotion where the product feed hasn’t been updated to reflect that new price.
If MVMT is paying Connexity on a cost per sale (or affiliate) scheme, the results above could be pretty poor for them. Clicks would move to the “cheaper” ad and cost them more than if the same purchase happens through their own ad.
MVMT YouTube Ads
MVMT puts a lot of effort into their brand and movement right.
In this section, we’ll take a look at how they use YouTube Ads to accomplish this.
The brand only has 23k subscribers on its YouTube channel. But it’s top 10 most watched videos all have view counts of over 340k, which indicates they are running ads.
I’ll cover the different advertising formats that MVMT is using.
Skippable video ads
These are the most common ad format on YouTube. MVMT uses them in combination with its remarketing audiences:
These product-focused ads are shown to people that have visited the website. The ad links straight to the product page of the watch in the advertisements.
What’s remarkable is that these videos are more than 3 years old. The fact that they are still running a campaign with them, shows the power of developing strong creative.
Similar to the other campaigns types, the YouTube ads aren’t limited to the US. These remarketing ads also show in the UK, Australia, Germany, and Canada.
YouTube Display Ads
MVMT also uses another ad format on YouTube in their remarketing: Display ads.
These are static ads that show as recommended video in the top right when a video is playing:
This specific ad links to a video on the channel.
TrueView Shopping Ads
MVMT also runs TrueView Shopping campaigns to retarget website visitors. This ad format is a mix of YouTube video ads with Google Shopping results:
The way to set that up is to start a regular YouTube campaign and link it with a product feed.
Here how that looks in Google Ads:
Google Display Ads
Similar to the Google Shopping Ads, the MVMT Display Ads are being served via a couple of different networks.
In my own research, I mostly found ads being served via Criteo or straight via the Google Display Network.
Similarweb confirms this.
In this pie chart, Microsoft Atlas refers to the Facebook ads part run through that platform.
Types of display campaigns
They are running both dynamic and static remarketing campaigns.
An example of a dynamic banner ad served via Criteo:
And a regular static remarketing banner served via GDN:
💰The MVMT Scoreboard
The Scoreboard is the part where we pull together all the research and look at how much money MVMT is making (or losing) with their Google Ads campaigns.
MVMT Gross margin
To get a sense of their gross margins, we take a look at the main competitors of MVMT.
Here are the two big players in the watch industry:
- SWATCH: 44% (Q2 2019)
- Fossil Group: 50-57%
I think the gross margins of MVMT will be very similar. They sell a lot directly through the site (high margin sales), but have also expanded selling on Amazon (which takes a cut of revenue) and wholesale to other retailers (higher volume but lower margin).
So in what follows, I’m assuming a 45% net margin.
MVMT Average order value
Most of the watches on the site range from $95 to 150. So it’s likely that their average order value also is in that range.
Let’s say $100.
Besides the watches, there are also other products and interesting upsells like interchangeable straps. (Check this presentation to see the design and CRO process behind those upsells).
To start, we put in all the numbers from this research, and assume that all of the gross profit is spent on customer acquisition:
At a customer acquisition cost (CAC) of $45, MVMT makes $335,626.67 every month in revenue and $0 in profit.
A company without profit doesn’t get acquired for $100M, so let’s see what happens if we decrease that CAC.
Now I’ve lowered the CAC from $45 (on the left) all the way to $4.5 (on the right).
It’s a very competitive market, so to be safe I’m staying on the lower side.
In what follows I’m assuming MVMT has a customer acquisition cost of $27 (60% of gross profit). At that level, the company generates $560k in sales which results in $100k gross profit.
MVMT lifetime value
Lifetime value depends on the repurchase rate.
Their own research showed that their audience purchases a new watch every 2-5 years. And since top ecommerce companies usually generate more revenue from repeat customers compared to new customers, they need something to survive in between those purchases.
That’s the role of additional products like new straps and new categories of products like sunglasses or regular glasses.
Those increase the likelihood that someone will purchase again.
So here is the impact repeat purchases have on the profitability of the Google Ads campaigns:
The repeat purchase moves from 0% (only one sale per customer) on the left to 50% (half of all customer purchase again) on the right.
The actual dynamics of repeat purchases are more complex but this gives a pretty good idea of the profitability.
In the pink box, I’ve picked the scenario that seems to be most likely. $151k in ad spend turns into $671k in revenue, a ROAS of 4.4.
And that means MVMT generates $151k a month in gross profit.
That’s it for our teardown of the MVMT Google Ads campaigns!
What did you find most surprising in this analysis? Let us know in the comments!