A Universally Accepted Methodology
Each year, IEG surveys thousands of sponsorship opportunities and audits more than 500 sponsorship programs and contracts. By analyzing patterns between the rights fees sponsors pay and the benefits they receive, the IEG Valuation team has determined values for all sponsorship benefits and established a proprietary formula for calculating sponsorship fees. To determine the value of a sponsorship, IEG assesses:
Tangible benefits. These are the quantitative benefits in a package, such as impressions in measured and non-measured media, program book advertising, televised signage, tickets and hospitality, on-site ID and sampling.
Intangible benefits. These are the qualitative benefits a sponsorship delivers, such as the level of audience loyalty, degree of category exclusivity and awareness of a property’s marks and logos.
Geographic reach/impact. Reach reflects the size and value of the market(s) in which a sponsor will promote its affiliation with the property.
Cost/benefit ratio. The lack of make goods and other guarantees means companies place a heavier burden on sponsorship than on other media. Based on industry standards, IEG has developed a cost/benefit ratio that recognizes the unique risks and rewards associated with sponsorship — this ratio is applied to all Valuations.
Price adjusters/market factors. Recognizing that sponsorship fees are impacted by factors unique to each sponsor, such as competitiveness of a category, the number of categories a sponsor purchases, the length of a sponsor’s commitment, and the current rights fee, the Valuation Statement identifies applicable price adjusters for each property.
This methodology has been used to value partnerships with international properties such as the International Tennis Federation Davis Cup and World Wildlife Fund; national opportunities such as American Diabetes Association, Joe Gibbs Racing and the United States Olympic Committee; and local and regional properties such as Chicago’s Adler Planetarium and Astronomy Museum, the California State Parks Foundation and the French Quarter Festival.
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