GMC Financial Management & Budgeting 3 — Questions and Answers
Question 1: What does a 'burn rate' tell a growth marketer about a campaign or business?
- The rate at which email unsubscribes accumulate
- How quickly available cash or budget is being spent over a period (Correct answer)
- The percentage of ad budget wasted on bot traffic
- The speed at which customer churn is increasing
Correct answer: How quickly available cash or budget is being spent over a period
Burn rate measures how fast cash or allocated budget is consumed, helping teams forecast when funds will run out.
Question 2: A growth team's Q3 campaign generated $500,000 in revenue on a $100,000 budget. What is the ROAS?
- 5x (Correct answer)
- 4x
- 50%
- 400%
Correct answer: 5x
$500,000 ÷ $100,000 = 5x ROAS (Return on Ad Spend).
Question 3: Which scenario best represents an 'above-the-line' (ATL) budget expenditure in growth marketing?
- Sponsoring a podcast with a targeted niche audience
- Running a national TV commercial for broad brand awareness (Correct answer)
- Retargeting website visitors with display ads
- Sending personalized email sequences to existing customers
Correct answer: Running a national TV commercial for broad brand awareness
ATL spending refers to mass-market, non-targeted media like TV, radio, and print aimed at broad awareness.
Question 4: A company's monthly marketing budget is $30,000 and it wants to maintain an LTV:CAC ratio of at least 3:1, with average LTV of $900. What is the maximum acceptable CAC?
- $200
- $300 (Correct answer)
- $450
- $900
Correct answer: $300
With LTV of $900 and a minimum 3:1 ratio, max CAC = $900 ÷ 3 = $300.
Question 5: In growth marketing budgeting, what is the primary purpose of a 'holdout group' in spend experiments?
- To save budget by excluding low-value segments from campaigns
- To establish a control baseline for measuring the true incremental impact of spend (Correct answer)
- To hold back budget reserves for emergency reallocation
- To test creative variations against each other
Correct answer: To establish a control baseline for measuring the true incremental impact of spend
A holdout group (unexposed control) allows marketers to measure the incremental lift attributable to the campaign rather than organic behavior.
Question 6: Which budgeting model starts from a blank slate each period, requiring every expense to be justified regardless of prior spend?
- Incremental budgeting
- Zero-based budgeting (Correct answer)
- Percentage-of-revenue budgeting
- Top-down budgeting
Correct answer: Zero-based budgeting
Zero-based budgeting (ZBB) requires justifying every line item from zero each cycle, eliminating automatic rollovers of past spend.
Question 7: A B2B SaaS company has a 6-month average sales cycle. How does this most directly impact marketing budget planning?
- It has no impact since marketing and sales budgets are separate
- It requires longer attribution windows and delayed ROI measurement periods (Correct answer)
- It means marketing should only invest in bottom-of-funnel tactics
- It mandates reducing budget until the cycle shortens
Correct answer: It requires longer attribution windows and delayed ROI measurement periods
A long sales cycle means revenue from today's marketing spend won't materialize for months, requiring extended attribution windows and patient ROI evaluation.
GMC Financial Management & Budgeting 3
What does a 'burn rate' tell a growth marketer about a campaign or business?