Watch any sport, live, streaming, broadcast, or clips on social, and you’ll quickly realize just how many companies are sponsoring any given event. But not all sponsorships deliver the same value.
As a result, brands and marketing executives are looking for ways to measure the monetary value of their brand exposure across all primary channels - broadcast, streaming, and social - using a consistent, reliable methodology. This is where Sponsor Media Value (SMV) comes into play. Several factors go into calculating the complete Sponsor Media Value of each sports sponsorship. Let’s take an in-depth look at SMV, its components and importance, and how it is calculated.
What is Sponsor Media Value (SMV) and why is it important?
SMV is the monetary value of brand exposure in sponsorship of social or broadcast content. For example, it measures how valuable on-court signage is during an NBA game or a branded social post put out by an MLB team. SMV helps brands and marketing executives evaluate their investments in sponsorships, advertising, and brand partnerships. The SMV is calculated based on the reach, frequency, and quality of exposure to the brand. A brand needs to measure its SMV to understand its brand value and the ROI generated from different marketing channels.
The Components of SMV
There are three components of SMV:
- Full Media Value (FMV) - The FMV is the cost of buying the same advertising space or placement where a brand is exposed, without any sponsorship privileges. It is calculated using the average market rates.
- Media Value Percentage (MVP) - The MVP takes into account the quality of the exposure. It is the percentage of the FMV assigned to the sponsorship exposure. It varies based on the quality, size, and prominence of the exposure.
- Duration Factor (Video only) - The Duration Factor is used only for videos and determines the value based on the length of time a brand or its logo was visible on the screen.
How is SMV calculated?
The SMV is calculated by multiplying the FMV, MVP, and duration factor for videos.
SMV = Full Media Value x Media Value Percentage x Duration Factor
For example, let's say a brand participated in a sports event, and its logo was visible for 30 seconds on a video screen during the entire event. The FMV for the same advertising space placement is $10,000. The MVP for the brand's sponsorship is 50%. The Duration Factor for 30 seconds is 1.5. The SMV for this exposure would be $7,500 (10,000 x 50% x 1.5).
The Benefits of Measuring SMV
Measuring SMV has numerous benefits for brands and marketing executives. It provides an understanding of the value of brand exposure in sponsorships, advertising, and brand partnerships. Brands can use SMV to justify their sponsorships, advertising, and brand partnerships to stakeholders and enable them to make informed decisions about their investments in sponsorships, advertising, and brand partnerships.
Sponsor Media Value is a powerful tool that helps brands and marketing executives evaluate their investments in sponsorships, advertising, and brand partnerships and measure their brand value. To calculate SMV, it is important to consider the FMV, MVP, and duration factor for videos. Measuring SMV has numerous benefits that help brands make informed decisions about their investments in sponsorships, advertising, and brand partnerships. The importance of SMV in the modern era cannot be overstated, and its significance will only continue to grow.