Sponsorship is not a creation of meeting organizers or even the modern capitalist economy. A quick history lesson uncovers this: The first sponsorships date back to the 5th century BC in Ancient Greece. Rich citizens paid a voluntary tax to finance major competitions and public festivities.
In the The New Sports Sponsorship Arena, we learn that sports sponsorships are well over a hundred years old: “The modern understanding of sports sponsorship can be traced back to the 19th century with the birth of the baseball card. As the American pastime, baseball continued to drive sports sponsorship. Radio broadcasting of the American League in the 1930s helped make Babe Ruth a national star and drove some of the first sponsor advertisements. That same decade saw Lou Gehrig become the first athlete to appear on a cereal box, a new General Mills product called Wheaties. Sports television broadcasts altered sponsorship relationships through exposure. Radio only allowed for sponsorship to exist when mentioned. But on television, a company logo or name could be seen for long periods of time. As a result, sports sponsorships exploded. In 1984, Nike broke records by signing a young Michael Jordan to a shoe sponsorship deal for $500,000 a year. At the time, the company was small, and the number was astronomical. It turned out to be perhaps the most influential sponsorship deal of all time.”
ROI to ROO to ROE
Did the Greeks ask about their return on investment? And how does Nike feel about its $500,000.00 investment in a young Michael Jordan? The notion of ROI, Return On Investment, began in the early stages of sponsorship where companies bought space to advertise their brands. Behind home plate, in stadiums, concert venues etc. sponsorships are bought, sold, negotiated and measured based on paid broadcast value.
More: How to Prove the Business Value of Meetings and Events
When the stakes grew into 7- and 8-figure contracts and more, the scales were tipped and companies needed additional metrics to justify their investments. ROI became ROO–Return on Objectives. Simply put, ROO became a broader definition of what was trying to be accomplished beyond eyeballs.
As companies and organizations were experiencing the increasing pressure on showing viable business returns on marketing investments, another shift in the marketplace was happening. That shift was the marriage of advertising and innovative technologies that ushered in the era of AdTech-based business model and the advent of Big Data.
The AdTech boom created a new kind of business environment: objectives and the associated tactical initiatives became sharper because data-driven analytics could track conversion. Eyeballs became a vehicle to deliver to engagement. I call this ROE, Return on Engagement, though some prefer Return on Experience. Books were written on the topic, most notably, “The Experience Economy,” and companies fundamentally shifted their sales and marketing approach based on the value of face-to-face meetings.
Last March, when the global pandemic hit, in person experiences stopped. They ceased to exist. The world shut down. All engagement became virtual and relegated to a variety of 2D platforms that crippled the ability to foster relationships that honor the human experience.
While in-person, live experiences, stopped during the pandemic, measurement and the pressures on return on investment increased. Why? Because all social and commercial activity began to take place in the digital environment—where everything can be evaluated and analyzed.
This is an entrepreneur’s moment. The pandemic is a once-in-a-lifetime innovation opportunity. And with that comes new challenges. Now, because of many new technologies, including Linkroom, Spatial, Virbella, Hub and many other virtual meeting platforms, we have the ability to meet face-to-face, actively participate, move, network, sell and conduct business in a human matter in a digital environment.
What is next? Another emerging technology on the minds of both advertisers and consumers is virtual reality. Much has been written about the potential of VR for consumers, and brands are already jumping on board. As a part of IBM’s relationship with the Masters golf tournament, the computer giant offered the first foray into VR with views on two holes of the golf course. This is just the tip of the iceberg of what brands believe they can accomplish in the future.
With a new set of analytics and transactions to prove conversion, the next evolution of how we think about returns on investment in the digital space will be ROV, or Return on Virtual, as the world works to meet again in person one day.
Virtual is truly the next frontier. ROV is here to stay.
For the past 35 years, Lisa Furfine has built a network of colleagues and clients in the sports, hospitality and entertainment industries. After helping several new businesses launch utilizing live events as the business development catalyst, Furfine has now turned her energies to applying fundamental live event principles to the virtual world, as co-founder of Linkroom™ and CEO of Bogotash, LLC.