Under Armour is backing out of their deal with UCLA. There are a few possible reasons why this is taking place:
In the post on the link above, I show the timeline of the collapse of UA’s share price on the stock market. This underscores every action UA is taking at this time. Taking action on the inability for college sports to be played allows UA to save money. Doing so isn’t a good look, but shareholders care about profitability. Now, let’s get to a few of the other reasons why this possibly happened.
Here’s @UnderArmour’s statement on why it is terminating its partnership with #UCLA. pic.twitter.com/f1DvSZUu2M
— Adam Rittenberg (@ESPNRittenberg) June 27, 2020
- UCLA hasn’t won a Pac12 in football since 1998. UCLA football isn’t the flagship however, it’s basketball.
- UCLA basketball hasn’t won since 2012-2013. They haven’t made it to the NCAA Tourney since 2017. Now granted, the moment UCLA became an Under Armour school, they lost out on the ability to sign Nike or adidas athletes and these two programs control grassroots basketball.
Under Armour and its executives have been playing the sneaker game by the rules Nike created. Every brand is playing the rules based on an old playbook, that can only be used by the brand that built the machine and the brand that is capable of spending 8 Billion dollars a year as a de facto business operation.
I’ve discussed this on several occasions here on the site:
On Running Cloud X, The Rock and Under Armour | Influencer Marketing vs Brand Loyalty
Nike’s ambassadors are consciously aware of their responsibility to the Swoosh. Under Armour took to signing entertainers and landed The Rock, which on the surface looks like a good deal, but in fact for a smaller brand isn’t. Entertainers aren’t athletes and working with them may increase brand awareness, but they often look out for themselves first as opposed to arriving with a team mentality. The Rock, in one move, nullified the trust people have in Under Armour. This doesn’t happen with a Nike athlete, but that’s because Nike has a history here and they have built a brand on a strong foundation. Nike also understands the shifting marketing landscape and they’ve adjusted.
Reece Prescod – Portraits of Speed | Nike Marketing & Controlling Your Narrative
In the post above I explain in great detail how Nike doesn’t just work by spending tons of money, they also craft storytelling and operate their own media outlets. Nike understood the shift and began building an internal media company that operates several arms of content production via SNKRS, air.jordan.com, Nike News and their Nike YouTube and apps. This is not a fast road to marketing reaching millions right away; it’s a slow burn that Nike could afford to take because they had the money. Under Armour doesn’t have the money to burn, but they also don’t have an audience. They have always been in a position to build a better delivery system. Instead they follow Nike’s path and they miss the target consistently.
What Bad Marketing Looks Like | Under Armour’s TREK TO THE SUMMIT
Under Armour has been operating under the old guidelines of marketing as opposed to generating their own form of reaching the consumer. Even when they did things right by making great product and having the perfect storm happen, like with Steph Curry’s championship run, they moved their money away from Curry and into digital leading to layoffs in Connected Fitness and a decline in interest in Curry’s footwear. This isn’t the fault of the people on the ground. This lands squarely in the C-Suite with the executives trying to be like Nike.
Under Armour Didn’t Make 1 Video To Market The Curry 4 | Marketing
I’ve been having a dialogue with a shoe dog on LinkedIn. In that exchange I wrote the following paragraphs. I’m sharing them here, because this Under Armour x UCLA divorce is emblematic of a much larger issue that will need to be discussed in athletic companies: the professionalization of sports and the disconnect with teens who no longer connect with either sports or athletes. Here is the exchange which sums up this post on marketing:
Sculpting requires the whittling away of layers. (Which is why people shouldn’t be surprised about Nike’s layoffs.) The moment marketing teams acknowledge the shift to all companies as media companies, jobs will shift. (Notice I said shift, not be lost?) Most marketing teams are built on concepts of the past (ad spend) and not the realization that marketing is no longer about the deepest pocket, it’s about creating enough quality content to resonate.
No one can play ‘with’ the giants, but if enough consumers become educated the smaller brands can chip away at the ankles of the giant. As the giant removes accounts (going to DTC) and moves farther towards Digital they leave paths into the village. The question is are the rivals capable of using a Trojan Horse to travel those roads?
Ad spend isn’t as important anymore because of the shortened calendar for a launch. Where a product from conception to delivery used to take 6 months to a year, that timeline has been shrunk considerably. It’s more compressed than most understand and it’s getting shorter with programs like Nike Express Lane and adidas Speedfactory as well as 3D tech ramping up. Marketing is no longer about the brand who spends the most money. Allbirds barely runs television ads, and focuses primarily on social media spend, but they became a billion dollar brand. Marketing is now a consistent process of content creation that resonates beyond simply the style and design of a shoe. The entire story has to be told by competent writers, photographers and videographers. Under Armour can’t be like Nike and force “Reverse Auctions” for their ad dollars and to be honest they don’t have to…
UA never needed UCLA and they don’t need any other colleges because they can’t win the battle against Nike. They can win at the grassroots level with genuine engagement with the consumer and the community.
Nike’s ‘Reverse Auction’ Is A Reality Check for Marketing In the Digital Age | Marketing
