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.
"It has resulted in the best and fastest, most aerodynamic speedskating suit," Haley said. "It made sense to pick [speedskating] as a sport we could help."
The Under Armour team gathered data about speedskaters' movements, using a high-speed camera to film the athletes as they trained in a Utah facility. Under Armour then worked with Lockheed engineers, who created "computational fluid dynamic" models to analyze how air flows around skaters at various body positions. That information was used to create a half-dozen mannequins in various poses that were used in wind tunnels at Lockheed Martin and the University of Maryland to test out hundreds of fabrics.
No single fabric performed better than the others, so it went with "different textiles placed in different parts of the body," Haley said.
Under Armour also found that speedskaters tended to unzip their suits at the neck because they were uncomfortable, an adjustment that slowed them down. So designers ended up creating a stretch zipper that winds around the body in a way to bypass the throat. And under it all is the company's famous moisture-wicking technology.
Bobsled team members have competed in Under Armour uniforms using Coldgear compression fabric since 2009. U.S. skeleton team members are getting uniforms developed after two years of extensive wind tunnel tests.
For the Canadian snowboarders, Under Armour used its "Coldgear Infrared" fabric introduced to consumers in the fall, with an innre layer that recycles body heat without adding extra bulk.
While the company has begun to show off most of the new uniforms, the speedskating suits are being kept under wraps until later this month. The Jan. 15 unveiling will be Under Armour's final Olympic-related marketing push.
It will follow the final airing of the "Under Armour Makes You Better" campaign, which was launched in November to highlight the Olympic team sponsorships and feature new cold-weather apparel. Under Armour must stop the campaign early this month to comply with an International Olympic Committee rule that restricts sponsors without marketing rights from marketing athletes just before or during the games.
Under Armour's commercial, shown on air and online on ESPN and NFL, features members of the bobsled team, world champion downhill skier Lindsey Vonn, an Under Armour athlete, and others battling extreme conditions and frigid weather with the protection of Under Armour apparel.
Though the Olympic teams' special suits were customized and never meant to be mass-produced, some use elements found in consumer products. And some of the newer features could show up in apparel lines at some point, Haley said.
"We've never embarked on a project involving lead athletes without learning something of tremendous value we can bring to athletes everywhere," Haley said. "Everything we work on is going to make us better."
Reuters contributed to this article.Copyright © 2014, The Baltimore Sun