Michael Phelps’ unprecedented dominance of Olympic swimming is a major coup for sponsors like Under Armour Inc., (NYSE:UA) who pay hefty sums to tie his success to their brands. But the International Olympic Committee’s strict sponsorship rules forced the Maryland-based apparel company to find creative ways to congratulate Phelps after he scored two gold medal wins on Tuesday.
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Unlike chief rival and official Olympic sponsor Nike (NYSE:NKE), the IOC prohibits Under Armour from using certain key phrases and images, such as “Olympics” or the interlocking rings logo, even if one of the companies’ athletes are directly involved. The rules limit the extent to which Under Armour can leverage Phelps’ success in their social media posts and marketing efforts.
Instead, Under Armour has combined its own marketing slogans with obvious signifiers like American flags and celebratory emojis to link Phelps to their products without breaking IOC regulations.
“They’re doing the best they can do without pushing the limit of getting sanctioned, getting penalties from the USOC,” Eric Smallwood, managing partner at Apex Marketing Analytics, told FOXBusiness.com.
When Phelps defeated his archrival, South African swimmer Chad Le Clos, to win gold in the 200-meter butterfly event, Under Armour included the 31-year-old in a post on its Twitter account.
“It’s what you do in the dark, that puts you in the light,” said the tweet, posted minutes after Phelps won his record 20th gold medal. Under Armour tagged Phelps in the post alongside its “Rule Yourself” slogan, an American flag and an applause emoji.
It’s far from an ideal scenario for Under Armour, but the brand is well-served by doing all it can to leverage its athletes’ efforts on the international stage. Phelps has a signature line of swimwear through Aqua Sphere, another one of his sponsors. The IOC has permitted Phelps to wear the “Aqua Sphere” logo because swimmers are allowed to choose their gear. Phelps’ fiancée, Nicole Johnson, and his infant son, Boomer, have also worn the logo.
By wearing Aqua Sphere’s “MP” logo on his swim cap in Rio, Phelps and his family members have generated more than $5 million in equivalent brand exposure for the brand, according to Apex Marketing’s calculations. That number should grow by several millions more before the end of this year’s Olympics, Smallwood said.
Under Armour has garnered about $200,000 in brand value from fleeting moments in which NBC cameras caught Phelps wearing the company’s logo on a hat and sweatshirt between events. But only Nike’s logo can be visible once Phelps steps onto the podium to accept his medal.
The brand has taken full advantage of Phelps’ return to the public spotlight on its website. The rotating images on Under Armour’s home page currently feature the brand’s patriotic “Stars & Stripes” collection and Phelps’ advertisement for the “Rule Yourself” campaign.
While Phelps is unquestionably Under Armour’s most recognizable athlete at the 2016 Olympics, the company has other key avenues to brand exposure in Rio. It designed the uniforms of several prominent Olympic teams, including Team USA’s vaunted gymnastics team and the Netherlands’ beach volleyball team.
That means the company’s distinctive logo will be on display every time those teams compete. USA Gymnastics is prominently featured on both Under Armour’s website and its main Twitter account.
And once the IOC’s moratorium on marketing campaigns for non-sponsors expires, Under Armour is free to take full advantage of Phelps’ status as the most decorated Olympic athlete in history – a title he is likely to hold for years, if not decades, to come. Under Armour will reap the benefits of associating with an international athlete without paying tens of millions of dollars to be an official Olympics sponsor.
“One school of thought is, why sponsor the Olympics? It’s two weeks. Sponsoring athletes is year-round,” Smallwood said.