When Under Armour reported its second quarter earnings in July, the company had a 29% boost in revenues over the same period last year. It marked the 23rd consecutive quarter of at least 20% net revenue growth, and led to a 7.3% jump in the company’s stock price. During his conference call with analysts, CEO Kevin Plank saved some significant praise for three specific people.
“Over the past year, three Under Armour athletes have transcended their sports and become known by just their first names, Stephen, Misty and Jordan,” said Plank. “These three athletes have combined to teach us one incredibly valuable lesson that we need to think bigger. For Stephen Curry, Misty Copeland and Jordan Spieth, being a great basketball player, principal ballerina and PGA golfer was rooted in their ability to see beyond, to be prepared to not just be great but to be extraordinary, to plan and practice but also know when to take the risk. Our lessons out of this are incredibly relevant to this moment in time for the Under Armour brand.”
It’s no surprise then, at this moment in time, that in the first ad of the brand’s newest campaign, there isn’t a football player in sight. It’s all Stephen, Misty and Jordan. Of course, there’s a Tom Brady commercial on its way as part of the overall “Rule Yourself” campaign but the message is clear–Under Armour is no longer a niche challenger brand, but one intent on contending for the title.
The brand has shed its football and gym rat exclusivity, expanding its reach into growth categories like running, global soccer, and women’s athletics to become the second biggest sports apparel company in the U.S. after Nike. And despite being a 19-year-old company, it’s only been over the last couple of years that the brand has used its marketing to significantly branch out to reach new audiences that may have had it pegged as the Ogre of athletic brands.
Since launching its award-winning “I WIll, I Want” women’s campaign last year, women’s athletic apparel has become 30% of company sales. Curry’s signature shoe, the Curry One, has been selling out on the company’s site and helped boost overall second quarter shoe sales by 754% over the same period in 2014. Meanwhile every time Spieth wins a PGA tournament, whatever shirt he’s wearing immediately sells out on the Under Armour site.
The company notched $3 billion in sales in 2014 and Plank predicts it will hit $10 billion by 2020. But despite its current status as the Swoosh’s hottest competitor, senior vice-president of global brand marketing Adrienne Lofton says the brand’s identity will always be as a scrappy outsider.
“What separates us from the clutter is this blue collar work ethic,” says Lofton. “We’re an underdog brand. We work with athletes who most people wouldn’t or didn’t draft in the first round, or who they wouldn’t traditionally give a prima ballerina title to. We pick that athlete with a chip on their shoulder and their desire to win because it aligns with our own attitude.”
For the “Rule Yourself” campaign, Lofton says the brand found that too often, in advertising and the media, the focus was on the end results–the trophies, the awards, the world records–instead of all the tough, tough days that lead to that moment and what it takes to be an elite athlete.
“The millennial and Gen Z consumer are very used to getting things right when they want it,” says Lofton. “What we want to remind them is that you don’t just get this, you have to work to get it. We wanted to show that greatness is showing up every day at 5 a.m. when everyone else is asleep. Steph Curry won the NBA championship and MVP because he trained everyday, got up when he fell down, continuing to drive with all that unsexy work to achieve his goals.”
When talking to their sponsored athletes, the brand kept hearing the same thing, that it’s not about natural talent, it’s about drive, effort and consistency. “A lot of brands are about that initial motivation—just do it, get up and go— we talk about how sustaining that effort is what makes the difference for an elite athlete, and we want to be the brand to show you how to do it,” says Lofton.
Since 2013, Under Armour has been upping its tech game by spending about $750 million to acquire activity-tracking app MapMyFitness, nutrition-tracking platform MyFitnessPal, and popular European fitness-tracking app Endomondo. Its Connected Fitness community now has about 147 million members, and is logging more than 100,000 new users every day.
From a marketing perspective, Lofton says the platform is allowing the brand to learn more about its consumers, how they train, what they eat, how much they sleep, and ultimately is able to customize product and stories to really resonate.
“Every brand likes to say they know exactly who they’re targeting, the fact of the matter is, as they get older, grow and develop, consumers are constantly changing and evolving, and so are their training and sports habits,” says Lofton. “We’re using that data to make sure we’re serving up the best products, whether it’s apparel, footwear, accessories, or digital products they need to be great.”
Lofton says Connected Fitness gives the brand a vital third pillar in which to better connect with consumers. “We’ve always said we provide consumers with two main things physical armor like shorts and shoes, and emotional armor, an empowering message that inspires athletes to run through walls,” she says. “The third piece is informational armor. These are now the three pillars you need to tell a complete story and deliver athletes product that at this point they might not even know they need.”
Because the company has been growing at such a quick clip across multiple sports categories, Lofton says one of the biggest challenges are focus and discipline. She says the idea of marketing across multiple sports is relatively new to the brand and it’s been forced to evolve its marketing strategy to make sure a rising tide floats all boats. Training is at the core of the Under Armour brand and drives the success of all the other categories.
“This training campaign, when successful will elevate our basketball business, our soccer business, our golf business, and our women’s business because everybody is included in it,” says Lofton. “When we drive training, it lifts everybody. The next level is the specific category focus. Two years ago, we were just figuring out what we were going to look like in basketball. Now we have the NBA champ and MVP Stephen Curry and a shoe that evaporates when we let it hit the market. Back then running was underdeveloped and under-defined, and now we’re establishing a very clear position in that marketplace and know the billions of dollars in opportunity that exist there.”
Lofton says five years ago Under Armour wasn’t as disciplined in setting long-range strategies and plans as it is today. “Right now it’s about three to five year planning to make sure from product to storytelling we are locked and loaded with a cadence that is set for growth,” she says. “You talk about being a $10 billion company, we can’t do it the way we used to, which was essentially sitting around a table and deciding what was important eight months out.”
Last year, Under Armour launched its first major ad campaign for its women’s category with a stunning ad starring a little known (at least among general sports fans) Copeland. And while the overall “I Will What I Want” campaign featured athletes like skier Lindsey Vohn, U.S. national soccer player Kelley O’Hara and tennis star Sloane Stephens, its two highest profile (and most successful) ads were those with unorthodox choices Copeland and supermodel Gisele Bundchen. Bundchen’s ad won the Cyber Lion Grand Prix at the Cannes Lions Festival.
Lofton says “I Will What I Want” has transformed the brand in the eyes of women. “It was Misty and Gisele at launch, then we had a bra campaign still around the idea of I Will What I Want, and the love, admiration and acceptance of both campaigns from girls and women around the world has been exactly what we hoped for,” she says.
The company does a brand heat study every quarter and for the first time ever, its awareness numbers in the women’s category has exceeded the men’s. “When you go out and talk to our female consumers, Under Armour was always ‘my brother’s brand’ or ‘my boyfriend’s brand,’ it was never for her,” says Lofton. “I Will What I Want was the highest earned impressions campaign we’d ever done with more than 3 billion earned impressions. It was definitely a sign to everyone here that women can definitely be the category that sets the standard for the rest of the brand.”
It’s no coincidence that Under Armour’s marketing started hitting a new level, and beyond its traditional demographic, after it signed on Droga5 as its agency of record in 2013. The brand has long done the bulk of its creative in-house, with mixed results. It’s 2008 Super Bowl ad “The Gathering” might as well have been called 300: Rise of the Aggro Jocks. Now it’s marketing is more nuanced, clearly aimed at a broader audience while still retaining the Under Armour identity.
“We realized we couldn’t continue to do everything on our own, so it was critical that we picked a partner with the same mindset and DNA that can help us tell stories over the long-term,” says Lofton. “Droga5 as a partner is as passionate, as innovative, and as driven as our brand, so it is a match made in heaven. Coming from a brand that hasn’t always had agency partners, every step isn’t easy. But the work speaks for itself and perfectly illustrates the partnership.”
Droga5 founder and creative chairman David Droga calls Under Armour a brilliant brand and a great client. “It’s everything you would want in an agency-client partnership,” says Droga. “Genuine mutual respect, grand ambitions, honest conversations and a relentless desire to win, not merely compete. And it helps that Kevin Plank is a positive force of nature.”
The key to the working relationship, according to Lofton, is constant communication–all the way up to Plank and Droga. “We are a very opinionated brand and don’t have a reputation as an easy client, but the two personalities couldn’t be more aligned,” she says.
Lofton says the briefing process that goes client to agency, and then agency to client has been refreshing. “The agency is a really incredible thought leadership partner that shows us how our vision of athletes works through data and a great gut instinct,” says Lofton. “What I’ve learned most is great ideas can come from anywhere, and happen when you take the guard rails down a bit and dream. But the push-pull between business needs and dreaming is where the magic is created.”