Digital Agencies Are Still Amped for Apple Watch Despite Recent Scrutiny

During Tuesday's quarterly earnings report, Apple did not reveal how many smartwatches it has sold since the gadget's wide release in nine countries on April 24. The dearth of particulars has led to a lot of back-of-the-napkin math and speculation, with analysts estimating anywhere between 2 million and 4 million units have shipped. Even though fantastic iPhone sales helped Apple beat Wall Street analysts' revenue expectations—$49.6 billion for the quarter—a lot of the post-earnings narrative centered on whether the Apple Watch is a success or a disappointment so far. Without hard numbers, worries are reasonable enough—it's not like the device has reached every wrist you see. Given the newfound scrutiny, we asked marketers at advertising agencies—arguably the most excited group about Apple Watch two months ago—how they feel about the device now. "We don't let what's coming off of Wall Street change our thinking in terms of what we should do with media," said Michael Koziol, managing director at Huge. "The interest level is still very high. People are figuring out how the device fits into their business." Jeff Malmad, managing director, Mindshare's head of mobile and Life+ (the agency's wearables division), said his agency is "more excited than ever." "We're using the watch with multiple clients and have had success in terms of downloads and engagement," he said. "Apple never came out and said we have an ad product for this–it's up to us to create a new way for brands to interact in this environment." Indeed, what often intrigues marketers about wearables is the blank slate that new platforms offer. It's fun for them to ask: What kind of experiences can we create on consumers' wrists? "There's a lot to digest," Koziol explained. "[Apple Watch] is up close and personal. This isn't something someone carries in their purse.... You don't want to do anything premature that's damaging to a brand. But the opportunities are immense." At the same time, it's fairly clear that waves of brands won't bang down their agencies' doors until Apple Watch achieves more scale. "Most of our clients are taking a wait-and-see approach, and nothing has really changed around [the new sales speculation]," said Andrew Carlson, experience design practice lead at DigitasLBi. "The Apple Watch remains a high-potential device with niche or extension applications related to messaging and payments, and we will continue to explore it as part of a solution in those cases." Natalie Kim, director of strategy at Firstborn, agreed. "Our clients' level of enthusiasm has remained the same—curious, but proceeding with caution," she said. "We've moved out of the excitement-around-something-new phase into the dig-into-the-practicalities phase." The scalability phase is probably two years away, if you believe Piper Jaffray analyst Gene Munster. He is among the more optimistic Apple Watch number-crunchers on the Street, predicting that it will sell 14 million units next year and 40 million in 2017. Steven Louie, creative director at Flightpath, didn't need to read Munster's projections to stay positive about the wearable. What Louie learned during Apple's earnings Tuesday was just fine. "Given that Apple Watch is a version 1.0 product with no available native apps yet," he said, "we tend to take the news regarding Apple Watch sales as positive."

Performance Marketing

Digital Agencies Are Still Amped for Apple Watch Despite Recent Scrutiny

Wall Street worries about scale; marketers stay patient

Christopher Heine

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Christopher Heine