Marketing Budget as a Percentage of Firm-Wide Budget

Marketing Budget as a Percentage of Firm-Wide Budget

KPI Details

Marketing Budget as a Percentage of Firm-Wide Budget measures the budgeted expense allocated for the Marketing Department in relation to the total operating budget allocated for the entire firm over the same period of time. An excessively high or low value for this metric may be related to a number of factors, including inaccurate demand forecasting, inefficient budgeting processes (e.g., sub-par expense tracking, poor understanding of historical expenses and incomes, etc.), overstaffing of the Marketing Department, general inefficiencies within marketing processes (e.g., inefficient demographic research, untimely responses to customers, etc.), and sub-par Marketing employee training and performance. Any values for this metric should be weighted against the company's overall marketing strategy, as certain businesses may be more focused marketing than others due to differences in their customer demographics, etc.

KPI Definition

The budgeted expense allocated for the Marketing Department divided by the total operating budget allocated for the entire firm over the same period of time, as a percentage.

KPI Best Practices

• Accurate budget forecasting based on historical data as well as corporate marketing strategy
• Use external marketing agencies when appropriate to minimize reduce overhead costs
• Keep marketing and advertising focused on your target market to avoid wasteful ad spending

KPI Calculation Instructions Marketing Budget as a Percentage of Firm-Wide Budget?

Two values are used to calculate this KPI: (1) the budgeted expense allocated for the Marketing Department, and (2) the total operating budget allocated for the entire firm over the same period of time. The marketing budget must take into account labor (wages, salaries, commissions, benefits), overhead (occupancy, utilities, supplies, advertising, legal fees, travel costs, etc.), technology (hardware, software, end-user operations, etc.) and campaign costs. Include the expenses estimated to be spent by all sub-groups within the Marketing Department (e.g., Branding & Strategy, Content Marketing, Market Research & Analysis, Programs & Campaigns, and Public Relations) in the numerator.

KPI Formula :

(Budgeted Expense Allocated to the Marketing Department / Total Operating Budget of the Firm) * 100