Marketing Officer Budget & Financial Management Flashcards

A marketing officer is allocating an annual budget across channels. Which budgeting method sets spending as a fixed percentage of projected revenue?

Answer: Percentage-of-sales budgeting

Percentage-of-sales budgeting ties marketing spend directly to a fixed percentage of anticipated or past revenue.

Which budgeting approach requires every line item to be justified from scratch each budget cycle rather than using the prior year as a baseline?

Answer: Zero-based budgeting

Zero-based budgeting starts from zero and requires justification for every expense, regardless of prior-year spending.

A marketing department spent $50,000 on a campaign that generated $200,000 in revenue. What is the Return on Marketing Investment (ROMI)?

Answer: 300%

ROMI = (Revenue - Cost) / Cost × 100 = ($200,000 - $50,000) / $50,000 × 100 = 300%.

Which document provides a month-by-month projection of marketing income and expenses over a fiscal year?

Answer: Marketing budget forecast

A marketing budget forecast outlines anticipated spending and income month-by-month to guide resource planning throughout the year.

A marketing officer wants to compare planned budget figures against actual spend in real time. Which tool or process best supports this?

Answer: Budget variance analysis

Budget variance analysis compares planned versus actual expenditure, revealing overspending or underspending in real time.

When a marketing officer must choose between two equally promising campaigns but has limited funds, which financial concept guides the decision?

Answer: Opportunity cost

Opportunity cost represents the value of the foregone alternative, helping officers decide which investment yields the greatest benefit given resource constraints.

Which type of cost remains constant regardless of campaign output volume, such as a retainer fee for an agency?

Answer: Fixed cost

Fixed costs do not change with the level of campaign activity or output, such as a monthly agency retainer.