When Under Armour signed UCLA to a 15-year, $280 million outfitting deal last year, the company’s thinking — like that of a prospective homebuyer — centered largely on location, location, location.
This article from the Baltimore Sun discusses UA’s decision making in going after particular colleges. While the strategy of signing colleges has long been a strategy of Nike and was really created by Nike, with so many of the major players in college sports, does UA really gain from their heavy investment into collegiate sports?
There really isn’t a quantifiable number to place on the power of your logo being featured on the only television viewership that still is able to monetize commercial breaks. Sports aren’t usually DVR’d, so viewers can’t skip. I wrote about this here:
The problem for UA is they are literally dealing with the programs that adidas and Nike are willing to let go. Consider the two major colleges signed by UA, UCLA and Notre Dame, were both adidas schools, not Nike programs. If Nike wanted either program they could have easily outbid UA.
Here is the issue, a simple search of Notre Dame on NBC ratings shows that viewership is low. UCLA until this season was a terrible move because the basketball program was not very good. This season however, UCLA is golden. So are these very costly sponsorships worth it as a marketing write off for the brand?
Yes. Perception is as important to brand growth as revenue. They are almost interchangeable. If a company is not relevant in the same field as its competitors in the mind of the consumer that brand really isn’t worth wearing. Consider the demise of technical footwear companies like Avia, Etonic or even And1. When these companies lose sponsorships or high profiled athletes the consumer immediately begins to see these companies as not being worthy of their dollar. Avia at one point had Clyde Drexler and Etonic had Hakeem Olajuwan. When those players retired those brands actually “retired”. And1 was one of the most recognized brands in the country when they rolled out the And1 Tour Bus. When the brand sold and the tour was cancelled, streetball didn’t disappear, but And1 literally dropped off the radar. The brand valued their few NBA endorsements more than their streetball brand which was their foundation. Losing their foundation basically killed the value of the brand.
Skechers, on the other hand, increased sponsorship by signing Kim Kardashian, Joe Montana and then moved into distance running sponsorships to bolster their credibility in performance and it worked. While it seems that Under Armour is taking on a burden other companies walked away from, the reality is not taking on those sponsorships would certainly move the brand closer to their demise.