This measure calculates the marketing budget per marketing full-time equivalent (FTE) employee. 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."
Budget for marketing / Number of FTEs who perform the marketing function
FTE - (full-time equivalent employee)
To calculate the number of full-time equivalents employed during the year for each respective process or activity, you must prorate the number of employees and the hours spent performing each process/activity. Assume that a full-time worker represents 40 hours per week. Provide the average number of full-time equivalents employed during the year for each respective process. Include full-time employees, part-time employees, and temporary workers hired during peak demand periods. Allocate only the portion of the employee's time that relates to or supports the activities identified for an applicable process. Prorate management and secretarial time by estimating the level of effort in support of each activity, by process.
For example, a part-time secretary in the finance department for XYZ, Inc. charges all of his time to finance department activities. He works 20 hours per week. The secretary splits his time evenly supporting employees working in the general accounting process and the financial reporting process. Thus, his time should be allocated by process. So, if he works throughout the year and supports these two processes, his time would be split evenly as:
20hrs/40hrs = .5FTE * 50% for general accounting = .25FTE for general accounting
20hrs/40hrs = .5FTE * 50% for financial reporting = .25FTE for financial 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.