When you say to advertise the watch, is it something we'll see on the billboards, magazines, etc? Seems like that is what they are asking for. If that is the case, you'll want to charge higher than what you'd think since you're really selling them the right to use that photo in all of their advertising.
So to figure out your rate, of course to cover all your expenses. Where do they want to have the shoot? Will you need to have transportation, lodging, etc? How long will the actual shoot be (time)? What equipment will you be using? Things like that should help you figure out a rough guideline on how much to charge, to cover your already purchased equipment and to cover the needed expenses to do the job.
The harder part of this is assigning a hourly or day rate to your time. What is the shoot worth to you? Is it something you'd do for $20 or is it something worth a lot more? Keep in mind, they asked YOU, so it means they recognize your ability to take photos, use that to your advantage
I don't do this for underwater photography, but I've done this quite some times with my automotive photography. A little different but still a similar approach. The standard editorial car shoot for magazines range from $200-500 depending on the amount of pages, importance, etc. So since you'd be shooting for their commercial usage, it'd be quite higher. A photographer friend of mine who does a lot of photos for corporations such as Hyundai (basically commercial photography) has charged up to $10,000, just because he's agreeing that the photos he has taken can be used in ANY way by the company he's shooting for. He is selling his copyright of the photo. Normally, you're selling the USAGE of the photo but you still hold the copyright. By selling the copyright, he gives up his photo and allows the company to use it however they please. That's why he charged so much since he no longer owns that photo.
