Before It Airs, Under Armour Super Bowl Ad Questioned
Saturday, February 2, 2008
At a cost of up to $100,000 per second, Super Bowl television ads guarantee buzz. But how much is it worth it when the buzz is about whether a company should have bought one?
Under Armour is looking past that question, which prompted a dip in the Baltimore company's stock price by more than a third earlier this month. Prices fell to $26 from nearly $44 after an analyst downgraded the company's stock and questioned its new advertising and marketing blitz, which the maker of athletic apparel will launch tomorrow with its first Super Bowl ad.
It may not have been the response the company was expecting to its new platform, a 60-second spot that will be shown in the first quarter of the game. The ad will feature about two dozen celebrity athletes, with thumping bass-heavy music, and build up to Under Armour's newest tagline: The future is ours.
Until recently, the fast-growing company had been a favorite among investors. Net revenue grew 41 percent last year, and the company is stepping up to take on sportswear giants Nike and Adidas with the launch this year of its first non-cleat athletic shoe.
Under Armour's new shoe and year-long marketing campaign come at a time of longer-term fears about economic growth. At least one analyst suggested that it does not help Under Armour to front-load its media buy and push profit primarily into the second half of the year.
Company founder and chief executive Kevin A. Plank described the Super Bowl buy to analysts on a conference call this week as "the coming-out party for more than 100 million people, to introduce them to the Under Armour brand."
"Our marketing for the year should not be defined as a Super Bowl ad as much as . . . the unveiling of maybe one of the largest growth engines that we'll introduce as a brand," Plank said.
Steve Battista, Under Armour's vice president of brand, said the Super Bowl ad is intended to be a springboard to more targeted television, print and digital advertising aimed at reaching a male and female audience, ages 10 to 22.
The new Prototype performance cross-trainer shoe hits the market May 3, and is being positioned as the alternative to the old-school cross-trainer, Plank said, "which is probably better known as a backyard barbecue shoe."
By the end of the year Under Armour will know whether the campaign has taken hold, he said. Past experience showed that the louder the pre-Super Bowl buzz, the bigger the bang for the advertiser's buck.
Last year, a Nationwide Super Bowl ad featuring entertainer Kevin Federline, the former husband of singer Britney Spears, as a daydreaming fast-food restaurant cook drew criticism from the National Restaurant Association. But consumers loved it. Though the average cost of a Super Bowl ad last year was $2.6 million, Nationwide estimated that the media attention to its ad brought in $7.2 million for the company.
Though Nike did not buy Super Bowl advertising this year, it spends more each year on advertising than Under Armour sells in merchandise. Nike's advertising cost in 2007 was $605 million; Under Armour's revenue was $430.1 million. That does not bother Robert J. Thompson, director of the Bleier Center for Television and Popular Culture at Syracuse University.
"What it boils down to is whether they have planned this advertising strategy correctly," Thompson said. "The Super Bowl is on in February; they're not rolling out product until May. If the last two years are any indication, we'll have forgotten about Super Bowl ads by Tuesday. The question is do you spend all of this money and by the time you bring out your product nobody remembers what it's for?"