Under Armour designed and is outfitting the USA Bobsled and… (Under Armour )
When the winter Olympics gets underway next month in Sochi, Russia, Under Armour's logo will be seen by millions of viewers around the globe as the Baltimore-based brand sponsors two U.S. teams and another from Canada.
The Olympic sponsorships — the greatest exposure yet for Under Armour at any winter games — could pay off not only in brand awareness, but in stronger sales and profits, company officials say. They hope wins by sponsored athletes or even just the exposure will reinforce the company's mantra of "making all athletes better" in consumers' minds.
"It's great and critical exposure for the brand," said Matt Mirchin, its executive vice president of marketing, who said the rapid growth of apparel and footwear sales is allowing for more spending on marketing. "We have more money to spend to grow outside North America, and the Olympics provides a great platform."
The sports apparel maker will supply uniforms and training outfits to the U.S. speedskating, U.S. bobsled and skeleton, and Canada snowboard teams. The snowboard and speedskate athletes are first-time sponsorships, and Under Armour hopes to make a splash by debuting an aerodynamic speedskating skin developed in partnership with defense and aerospace giant Lockheed Martin.
Under Armour doesn't disclose the value of its sponsorship agreements, but the costs are part of the 11 percent of revenue — about $198 million annually — spent on marketing.
It's difficult to isolate any sales boost that might come from the games alone, Mirchin said, so the company instead attributes some of its growth to the combined exposure of athletes and apparel that comes from Olympic sponsorships, the NFL, college football and other sports.
"Our job is to make sure the brand is used by athletes at all levels … and that consumers see that and understand that Under Armour used by quality athletes helps make them better and can make [athletes at all levels] better."
The Olympic games are among the highest-profile international sporting events for corporate sponsorships, with global sponsors such as Coca-Cola, Dow Chemical, Visa and McDonald's paying about $100 million each for marketing rights over a four-year cycle. Increasingly, though, as the games have become a backdrop to political protests, there's a risk of consumer backlash against some of the big brands.
Russia already has seen controversy, including protests over legislation prohibiting dissemination of information on homosexuality to minors. Gay rights activists have demonstrated against Coca-Cola, while groups such as Human Rights Watch have urged sponsors to speak out about labor abuse and discrimination.
Peter Walshe, a global account director of marketing company Millward Brown, calls Sochi a potential "danger games."
"With these major world events, companies are looking for a halo effect for the brand," he said. "Sochi is big and high profile, but such events are becoming platforms for social and political protest."
Security also became a concern for this winter's games after a pair of bombings in Russia 400 miles from the host city.
Under Armour's Mirchin said the company remains focused on supplying the teams.
"We run the brand and do what we think is right for the business and try to make the best possible decisions," he said.
Most fans watching the Olympics don't make connections between the brands supporting the athletes and controversies that appear unrelated, said Matt Saler, director of sports marketing for Baltimore marketing firm IMRE. The multiple sponsorships in the coming games can only help Under Armour, he said.
"It's another savvy move for Under Armour," Saler said. "They continue to make shrewd moves that get them global attention. They are strategic about the teams and events they align their brand with. It's a smart move that's going to grow their global presence.
"Aligning with the winter Olympics gives them an opportunity to showcase their brand on a global stage, and reach consumers they've been trying to engage with," not just serious sports fans but the general audience the event attracts, Saler said. "There's not a bigger event in the world than the Olympics."
Years of design work for the Under Armour teams will culminate when the athletes put the uniforms to the test from Feb. 7 through Feb. 23.
For the U.S. speedskaters, Under Armour aimed to create the most aerodynamic speedskating suit possible, company officials said, beginning in October 2011 when Under Armour became a national team partner. Under the four-year agreement, Under Armour supplies all the team's suits for training and competitions.
Company founder Kevin Plank came up with the idea of tapping into Lockheed Martin's engineering expertise to create a suit that could outperform all others, said Kevin Haley, Under Armour's senior vice president of innovation.