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New rules will help Under Armour tell its story during Rio Games

Under Armour goes for gold, aims to share its story through Summer Olympics in Rio.

The gymnasts stretch, sweat, flip and walk on their hands in a darkened gym.

"Team USA Women's Gymnastics is strong enough to carry the weight of a nation," reads a caption to the gritty ad promoting Under Armour, the team's outfitter during the Olympics that begin Friday in Rio de Janeiro.

You wouldn't have seen such an ad during the 2012 Olympics. Because Under Armour was not a sponsor of the games, it could not feature its Olympians — including swimmer Michael Phelps — around the time of the competition. Nor could its sponsored athletes extol the Baltimore athletic brand on social media during the games.

But this year, expect Under Armour to show the spot and another featuring Phelps during the Olympics because the International Olympic Committee changed its rules last year to give nonsponsors more leeway to capitalize on their athletes at the games, which present an almost unmatched global marketing opportunity.

Under Armour still won't be permitted to use the word "Olympics," the interlocking ring logo or a variety of other references such as the words "gold," "victory" and "Rio" in ads or even on social media, but it can showcase its athlete ambassadors.

"The Olympics provide a unique platform for our brand to engage with a global audience," said Peter Murray, Under Armour's vice president of global brand and sports marketing.

Under Armour has its largest Olympics roster ever — 225 athletes, including Phelps, the most decorated Olympian of all time; Kelley O'Hara of the U.S. women's soccer team; and Britain's Andy Murray, the Wimbledon tennis champion. Marquee Under Armour endorsers Stephen Curry (basketball) and Jordan Spieth (golf) are skipping the games.

Teams outfitted by Under Armour include USA Gymnastics, USA Boxing, Canada rugby, Switzerland beach volleyball, Netherlands beach volleyball, New Zealand kayak and canoe, and Hungary kayak and canoe.

Since soccer's World Cup may be the only larger athletes' stage, the Olympics represent a critical venue for a company counting on international growth to help narrow the gap with much bigger rival Nike, which provides uniforms and products for the games and is permitted to sell products emblazoned with "Team USA."

Under Armour's international sales represented 15 percent of total sales in the most recent quarter, but global sales soared 68 percent compared to the same period a year ago. The brand opened 60 new international Under Armour stores this year.

"Under Armour is at a point where moving into the international realm is key," said Auburn Bell, an adjunct professor of marketing at Loyola University Maryland. "If not the No. 1 driver of growth, it's certainly up there in the top three in terms of continuing on with a goal to catch Nike and expand their presence globally. They have to do it."

Under the more flexible rules, Under Armour said it submitted a waiver to the U.S. Olympic Committee and International Olympic Committee well before the games to use its athletes in brand marketing. The U.S. committee required nonsponsors to begin airing their commercials by late March, which explains why Under Armour unveiled new ads with Phelps and the gymnastics team earlier this year.

In Rio, Under Armour said, it will establish a hospitality venue near Copacabana Beach for its athletes, their families and VIPs. It has partnered with a local fitness group on fitness stations to host workouts for the public.

Under Armour's brand won't have the same promotional opportunities as top Olympic partners such as Visa, Coca Cola, Samsung and McDonald's to cloak itself in the iconic symbols of the summer games.

Instead, the company — still a relative newcomer to the international stage — will rely on its familiar storytelling approach depicting its athletes, their hard work and their achievements to promote the brand and its gear.

The rules change "allows them to gain the visibility without having to pay the price that official sponsors must pay," said Howe Burch, president of Baltimore advertising and marketing agency TBC Inc. "Typically, brands like Coke, Visa, Master Card pay enormous rights fees to have the official right to use the Olympic marks in their advertising. This gives Under Armour an opportunity to leverage that visibility of the event without paying the price that others are going to pay."

A key lure of the Olympics is their attraction to a women's audience. Gymnastics is especially popular.

"Women watch the Olympics in a much higher percentage of the total than any other sport," said Matt Powell, global sports industry analyst for The NPD Group in New York. "This is a great showcase for Under Armour."

Sales of women's training gear have been growing for Under Armour, which is likely to benefit from its sponsorship of the immensely popular gymnastics team.

Viewers of the Olympics also are likely to get a heavy dose of Phelps, who — win or lose — is likely to produce memorable moments.

Phelps, 30, is gearing up for his fifth Olympics and one more chance at glory. He's a star of Under Armour's "Rule Yourself" ad campaign.

Under Armour launched ads in the campaign in February; they feature members of the women's gymnastics team and Phelps. The brand first unveiled the campaign in 2015.

This year's ads continue the theme of training as the focal point of an athlete's everyday life with the tag line "It's what you do in the dark that puts you in the light."

A 90-second Phelps ad shows the swimmer's behind-the-scenes training for the Olympics and is set to "The Last Goodbye."

But it never mentions the Olympics, making it eligible for use during the games. These are likely the last games for Phelps, who retired once already after the London Olympics in 2012.

Phelps will "lead our Olympic roster in Rio," Murray said. He said the theme of the "Rule Yourself" ads "will continue throughout all of our digital, social and on-site activations in Rio, highlighting the brand commitment to training and the athletes' drive to be the best."

Under Armour's strategy of using athletes' stories to inspire consumers to buy more products can be effective in the Olympics, said Powell.

"To have a personality approach is probably just the right play for the Olympics," Powell said. "It's really about the athletes."

Powell said "being the official sponsor is somewhat suspect in terms of what it can really do for you. During the London games, Adidas was an official sponsor and there was a survey and more people thought Nike was the sponsor."

Companies have paid $100 million to $200 million to become top Olympic sponsors for varying lengths of time, according to the Los Angeles Times.

In Rio, Under Armour may be able to forge a link to the games that some sponsors lack.

"The difference is their product is being worn in the games," Burch said. "The connection for brands like Visa, Coke and McDonald's is a little more diluted than it is for Under Armour that has a logical connection, like Phelps training in products prior to competition."

Also, the rule changes mean Under Armour's athletes can freely mention their sponsor in social media tweets and posts.

Such marketing and its value has grown exponentially since the last Olympics.

"The opportunity that social media presents in conjunction with mainstream television … just is going to help magnify the presence of the Under Armour brand," Bell said.

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