Measuring Marketing

Chapter 15 Program/Payroll Ratio

Measurement Need

The program/nonprogram ratio (Chapter 14) compares the costs of program-specific marketing activities to costs incurred in support (overhead, administration, and legal). Further insight can be gained by focusing specifically on the ratio of program expenses to payroll, and removing overhead and administrative costs.

Solution

The program/payroll ratioi compares the amount of money spent on program-specific marketing activities to the payroll costs of supporting those activities.

$PPR=\frac{P_t}{M{P}_t}$

Where

PPR = program/payroll ratio

Pt = marketing program dollar spending in time period t

MPt = marketing payroll dollar spending in time period t

Note: Marketing payroll dollar spending ...