Under Armour Stumbles in Olympic Sponsorship
The 2014 Sochi Olympics were expected to be a triumphant moment for the U.S. speedskating team - and the squad's sponsor, Under Armour.
It's been anything but that.
After a strong showing on the World Cup circuit, the team headed to the Games in skinsuits that Under Armour developed and called the fastest speedskating suits in the world.
Not only has no U.S. skater won any medals yet with seven speedskating events to go, but the sportswear company that made their high-tech Mach 39 suits is being blamed in part for the downfall.
While no one is saying the suits are definitely the cause for the disappointing performance, the team ditched them midway through the Olympics and went back to an older Under Armour one.
The debacle has put Under Armour in a position no advertiser wants to be in: on the defense.
The Baltimore-based company, which also is sponsoring the U.S. bobsled and skeleton teams as well as the Canadian snowboard team, said in a statement that it is dedicated to providing "state-of-the art technology."
The issue underscores the risks advertisers take when sponsoring huge events. Olympic sponsors often spend millions of dollars to have their logos plastered everywhere, including on the bodies of some of the most athletic bodies in the world. They hope to capture the huge audience; about 20 to 25 million viewers tune in to NBC's U.S. broadcasts each night, for instance.
Because of the growth of social media and other technology, sometimes the publicity can pay off: Even though Nike was not an official sponsor, for instance, the company's neon-yellow Volt shoes became the talk of the 2012 Olympics after about 400 Nike athletes sported the brightly colored footwear. But bad publicity can spread quickly, too.
Under Armour, which worked with Lockheed Martin to develop the speedskating suits to have less resistance than other suits, already is becoming the center of a lot of debate over the disappointing speedskating team's performance.
The brand was the most buzzed about Olympic sponsor online on Tuesday, according to Kontera, which monitors how much brands are mentioned in online conversations. In fact, the amount of social chatter about the brand increased 300 percent from Feb. 9 through last Wednesday, before the news broke, compared with after the speedskating problems on Thursday through Sunday. Many of the conversations over social media sites like Twitter revolve around whether Under Armour's suits are to blame for the speedskating team's woes.
Paul Swangard, managing director at Warsaw Sports Marketing Center at the University of Oregon, said Under Armour could have long-lasting headaches if the debacle puts questions of product quality into consumers' minds.
But some experts say Under Armour might be boosted by the added public relations, or PR. Robert Passikoff, president of Brand Keys Inc., a New York customer research firm, said that Under Armour's approximate 81 percent brand awareness could have gone up a point or so.
But awareness about the fact that the company was a supplier of suits for an American Olympic team probably "leapt enormously," he said. While Passikoff said it's never good for a company to have the perception that a product doesn't measure up, Under Armour's brand is strong enough to weather the issue.
To be sure, other Olympic sponsors have had misfires that have since been forgotten by the masses. For example, few people may remember the outcry Ralph Lauren faced in 2012 when people learned that the opening ceremony outfits the designer provided to U.S. Olympians were made in China. And Speedo got into trouble in 2009 when its swimsuits helped swimmers too much - leading to a ban of high tech fabrics. But the Speedo brand was not damaged long term, experts say.
"I don't think this is going to prove to be long term catastrophe. It's a short-term headache," said Atlanta-based branding consultant Laura Ries. "Not everyone goes home from the Olympics a winner."