Budget for marketing as a percentage of revenue

This measure calculates the budget for marketing as a percentage of revenue for the reporting period. The budget for marketing is the amount an organization predicts it will expend to operate its marketing function. The marketing budget includes, among other things, IT costs required to operate the marketing organization; travel costs incurred by marketing organization; personnel cost for marketing employees; costs for promotional employees; and allocated overhead costs. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "establish marketing budgets."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure ID:
100025
Total Sample Size:
2,294 All Companies
Performers:
25th Median 75th
- - -
Key Performance Indicator:
No

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Compute this Measure

Units for this measure are percent.

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(Budget for marketing / Total business entity revenue) * 100

Key Terms

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Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Measure Scope

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Cross Industry (7.3.1)

  • 3.3.2.1 - Confirm marketing alignment to business strategy (10155)
  • 3.3.2.2 - Determine costs of marketing (10156)
  • 3.3.2.3 - Create marketing budget (10157)
  • 3.3.2.4 - Determine projected ROI for marketing investment (17683)