Speedo
has been making waves at the Beijing Olympics but the swimwear brand is not
just causing ripples in the Water Cube, it is also creating a stir in the
world of sponsorship.
Rival brands have accused the firm of psychologically pressurising athletes to
wear its latest swimsuit while coaches have attacked Speedo for sapping
morale.
Meanwhile a rival company, California's TYR Sport, has even mounted legal
action - taking Speedo to the US courts accusing it of false advertising and
of conducting a monopoly.
TYR has also sued the US swimming team, its head coach Mark Schubert and even
two-times Olympian Erik Vendt for daring to wear Speedo's latest wonder-suit
when he was contracted to slip into TYR's swimwear...
Joyce
Julius & Associates,
a US firm which measures sponsorship values, has estimated that the airtime
Phelps has grabbed on American TV channel NBC alone is worth $3.6m to Speedo.
"Truly, we've been able to leverage his popularity with all of our
accounts because he has transcended swimming," said Stu Isaac, senior
vice president for marketing and sales for Speedo. "It's helping Speedo
become cooler and addressing a younger market outside just that core
competitive swimmer."
Speedo International's co-president Andy Long says the group now plans to
capitalise on its Olympic coverage, using it to push into new beach and
leisure wear markets in newer markets like China.
"In the run-up to the Olympics we focused on the elite suits, now we'll
be using that Olympic recognition around the world to continue the link."
Indeed, the firm says its showing at the Olympics has sparked huge interest in
its LZR suits - which won't be available to the general public until later
this year.
"It's a gold medal for branding for Speedo at this Olympics," says
Jasmine Montgomery of the consultants Futurebrand. "The glamour of
beautiful athletes doing incredibly well is gold for Speedo, you couldn't put
a price on the publicity it's getting."
'Halo
effect'
In
coming months the group also plans to capitalise on its popularity, and
broaden its appeal from traditional swimwear to a fashion brand - a move that
will see it following in the footsteps of Adidas and Nike.
"The halo effect on the brand and the rest of its swimwear is going to be
massive," says Rune Gustafson, chief executive on international branding
consultancy Interbrand.
"The
strongest form of advertising is performance and word of mouth and this is
what it's all about."
And
Michael Phelps' record-breaking performance will have do none harm, providing
free advertising worth more than "tens of millions", Mr Gustafson
adds.
At
present, competition swimwear makes up 60% of its sales - but the group has
branched out into beach fitness and leisure gear.
With
the global swimwear market estimated to be worth $13.3bn (£6.6bn), Speedo's
coverage at the Beijing Olympics could deliver significant gains.
But
Speedo won't be the only winners.
If
Phelps continues his record-breaking streak his performance could pay
dividends as the manufacturer has promised him a $1m payout should he win
seven golds or more.
But
as Speedo's Mr Long says, it's a cheque the group will be
"delighted" to sign.