What’s the point of the CMO?

Does the role help marketing departments lead successful businesses or is it an overused title that promises more than most of its holders will be able to deliver?

CMO

I guess it’s a new-year thing, but recently I thought about a question I’ve been toying with for a long time. Is the chief marketing officer role a good idea? Or should we accept the reality in many firms, get rid of the title and pick a term that reflects what most marketing executives are actually doing: communications?

Strong support exists for either route. I’m writing this column to invite your comments – because I’m genuinely unsure.

To structure the debate, I’ve dug out the facts that support getting rid of the CMO aspiration and those that lead to the opposite conclusion – keeping the title and pushing for more CMO influence. I’ve spent the last couple of years fighting for the latter, but I’m open to a challenge.

Let’s start with the facts for why we should ditch the CMO.

Most CMOs are mainly in charge of communications

Not long ago, I asked 1,232 CMOs from 74 countries what they were actually responsible for (as part of my ’12 Powers of a Marketing Leader’ research with Patrick Barwise). The numbers won’t surprise you: 77% of CMOs said communications. Then came brand development (whatever that means) on 63%; product development on 56%; and sales promotion and customer retention, both on 55%.

At the lower end, we had strategy on 39% and pricing on 32%. The numbers are consistent with other studies.

I don’t want to underestimate communications – it’s hugely powerful. Jägermeister has turned from grandpa’s drink into a hipster brand, mostly through communications. Elections are won and lost because of powerful communications (people are right to be concerned about it). Communication can supercharge or kill brands. It’s big.

However, marketing comprises many more Ps than just promotion – specifically product, price and place (otherwise known as distribution). In consumer goods companies, accepting the broad marketing definition is a no-brainer; it’s hard to imagine a Nestlé or L’Oréal marketer who would give up influence on product development or price-setting. But let’s remind ourselves that FMCG firms are the exception. Most marketers work elsewhere and even the big CMO names of the iconic tech firms are basically CCOs – chief communications officers.

The CMO title sets people up for failure

Why don’t CMOs last? Researcher Kimberly Whitler, a former CMO, went to find out. In hundreds of C-suite interviews, she and her colleagues made a striking discovery: what CEOs and CMOs expect of the top marketer’s job doesn’t match. And too often the CMO mandate doesn’t cater for real influence.

It’s a classic situation – the CEO wants growth, transformation, a great customer experience and so on. But the CMO, in reality, only gets to do the advertising. Yet the two sides rarely fight it out. Instead, marketers get on with it. Unsurprisingly, that mismatch leads to trouble.

A great example for the confusion is brand management. What does it actually mean? In consumer goods firms, that’s pretty clear. Brand management for a line of yoghurt is the daily fight for customer preference. It’s about the offer, the price, the communication (I am simplifying here).

But what does brand management mean in a software firm? Logo redesign aside, with no say on product, price and place, brand management often boils down to communication (and writing lengthy guidelines).

Satisfaction is the difference between what you expect and what you get. The title ‘chief marketing officer’ promises far-reaching influence and ultimately business growth. But almost half of all CEOs don’t believe that their marketing drives the top line.

The public CEO frustration recently peaked when former Coke CMO Marcos de Quinto retired and the company installed a chief growth officer instead. Coke’s CEO praised De Quinto for the packaging redesign, not for growth. Did de Quinto not deliver? Or was he never promising growth?

What is a CMO, anyway? The CMO title promises impact across all four Ps. But if CMOs don’t have full four-P access, they may simply set themselves up for failure.

READ MORE: Thomas Barta – It’s time to ditch your job description

CMOs: an endangered species

We can argue forever about the CMO title. Reality is already giving us a hint. In executive search firm Korn Ferry’s US C-suite tenure ranking, CMOs frequently come in lowest – and the trend is downwards. Many firms don’t have a CMO in the first place and when you look at CMO non-executive board penetration, we are talking about less than 1%. Is the truth in the numbers?

But there’s lots of good news too. Powerful facts support the case for strong CMOs.

Firms with CMOs and strong marketing departments perform better

Every marketer should know two landmark studies that explain why marketers matter. In the first study, researcher Frank German and colleagues have proven firms with a CMO achieved on average a 15% better financial performance compared to firms without. Hiring a good CMO is good for business.

The second study is even more stunning. It proves firms with strong marketing departments outperform their peers. Professor Hui Feng and colleagues have observed marketing departments at 612 publicly traded US firms over 16 years, across 60 industries. They looked at how strong marketing departments influenced financial performance. Strong meant big, but also with lots of four-P influence, high up in the organisation. The result: stronger marketing departments make for better long-term stock returns and short-term return on assets.

In a nutshell, if CMOs manage to fulfil their role and push beyond communications, firms benefit hugely. Let’s spread the word.

Great CMOs make great company leaders

If a board has the choice between a similarly qualified CFO and CMO, why give the top job to the bean counter if you can have the growth driver? It’s a no-brainer. But do great CMOs make great CEOs? I believe so.

Each year, we select a handful of top marketers for the Marketing Academy Fellowship, a programme to prepare CMOs for the CEO role (disclosure: I teach the leadership stream of that programme). When we compare the leadership profiles of the best fellows with those of CEOs, the differences are small.

Strong CMOs think way beyond communication. They expand their scope into pricing and strategy, and groom themselves as business leaders. Several fellows have now landed the top job, for example Catherine Tabaka, Sodexo’s healthcare CEO in North America.

I’m still torn. On one hand, the CMO title is an over-promise for many marketers and sets them up for failure. CMO career success is mixed at best and calling themselves the chief communications officer would simplify the life of many top marketers. On the other hand, strong CMOs, who drive marketing beyond advertising, make their firms more successful. They also make for great CEOs.

Giving in or fighting on? What do you think?

Thomas Barta is a marketing leadership expert, speaker and the co-author of ‘The 12 Powers of a Marketing Leader’. He has teamed up with Marketing Week to launch the Marketing Leadership Masterclass, a new CPD-accredited online course designed to equip marketers with everything they need to become a better leader. To find out more and book your place visit leadership.marketingweek.com

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Vibe Bangsgaard 11 Jan 2019

    It’s a good question. The point of the CMO – and the entire marketing department, has been a question for as long as I can remember. Until the importance of communication and marketing (the two are inseparable) in driving the business forward is recognised, CMOs can call themselves whatever they want, the point of them will still be in question. Purpose has to come before title. Apparently, the CEO at Mid America Motorworks is called the Chief Cheerleader. Now, there’s food for thought. So, give in or fight on? CMOs are fighters, so that one is easy.

  2. Anna Wilson-Barnes 11 Jan 2019

    I think the name of the job title is irrelevant – what you’ve hit upon is the much larger industry wide issue that “what CEOs and CMOs expect of the top marketer’s job doesn’t match”, “marketing comprises many more Ps than just promotion – specifically product, price and place (otherwise known as distribution)… And too often the CMO mandate doesn’t cater for real influence.”
    As a marketing manager for a multinational manufacturer I can attest to that; the role simply doesn’t encompass product, price or place as these are the remit of Sales and Regulatory.
    Marketing focused FMCG is the star on top of the marketing tree, but for the non-fmcg and B2B roles the majority of us fulfil the CEO’s are even more removed from understanding what marketing truly is to enable us to contribute fully to company growth without us having to fight our case.
    It’s not whether the CMO role is a misused title but whether the company empowers the CMO role to be valid and valued.

    • Thomas Barta 21 Jan 2019

      Thanks, Anna. You are right-more B2B firms should empower CMOs. But like with many movements, progress may not come from the top. Time for a grass roots movement.

  3. Richard Fullerton 14 Jan 2019

    In my experience, not at CMO level but with over 20 years’ experience in marketing, CEOs and top management do not understand marketing. Concurrently, marketers are poor at revealing how their activities add value to organisations. It is of course quite hard. For instance, building a brand is an intangible activity and the results of the effort – more sales – take time to come through. It is very hard to attribute greater sales to marketing efforts especially in an offline environment. Marketers’ time is often spent on what I call ‘housekeeping’ tasks, such as managing agencies, handling emails, communicating to existing and potential customers via established channels such as social media and email, providing information and collateral to third parties, and financial matters. This leaves less time to spend on the ‘Blue Ocean’ strategy work that could really help make the brand/organisation take that innovative leap that gains a competitive advantage. At the same time, CEOs are demanding ‘quick wins’ and fixes from their marketing departments. Not making sales targets for Q2? ‘Quick, Marketing department, do something!’ Quick wins are rarely possible – if they were, everyone would do them at the expense of proper marketing planning. Instead marketers must plan and implement the strategy, akin to herding cats (e.g. coordinating external agencies and ‘selling in’ to internal colleagues) towards the objective. The ‘sell-in’ is often the hardest part and plans can be scotched or disrupted on the whim of a CEO. Both sides have to manage each other better.

    • Thomas Barta 21 Jan 2019

      Thanks Richard. I love your idea of both sides managing each other better. With marketers’ training in target group communication, perhaps we can lead this…

  4. Robert Wyatt 14 Jan 2019

    Titles matter if they are honest. Maybe the good fight moving forward is to convince the CEO to make their senior marketing titles honest. It’s CMO only if the role has real influence over all elements of the marketing mix. Then there’s no mismatch of expectations for the CMO role, less failure and more CMOs making CEO.

    For many companies – FMCGs, the Coca-Cola’s, the Diageos, etc – there would be no change.

    For some, there would be. No CMO will want to re-titled to CCO, a direction that’s perceptually downward. But if there’s no pay cut, it would be the right thing to do for the long term. Obviously, it’s easier done at the time of hiring or major reorganisation.

    This approach is provocative but it targets the person who can affect the change you are looking for and even where it doesn’t work, it makes the right point.

    • Thomas Barta 21 Jan 2019

      Thanks Robert. Perhaps asking for a title change or more responsibility is a powerful way to lead that CEO talk. It would for sure spark a good C-suite debate.

  5. BHUPENDRA MISHRA 15 Jan 2019

    That indeed was a great read Thomas. Thank you for the article.

    However, in my opinion, as long as a Marketer is able to succeed in achieving the company goal (profit of course), it doesn’t matter whether he/she is a C.M.O or not. Being from a B2b background, i have seen how important communication plays a role when it comes to convince your client. My clients had never been interested in knowing my CMO rather where more focused about the offers and the growth that they weer getting with us as an organisation.

    Thus, i will conclude that, as long as people within the organisation and outside the organisation are approved of his/her work, skills & capabilities to deliver the output, it is okay to be called as a C.M.O.

  6. Chris Arnold 23 Jan 2019

    I think we need to FLIP* the current thinking and redefine the role, responsibilities and title. Maybe CCO – Chief Challenge Officer?
    Below the CMO I have seen many Sales Directors fighting with Marketing Directors over budget and both believing they make the real difference. For effectiveness and growth, they need to work together. Marketing is not a solo act, it is integrated within all aspects of the business. Especially retail, where the staff training is as important as the over budgeted Christmas ad.
    I do believe CMOs need to challenge their marketing departments and agencies more, many waste fortunes on poor research, tech gimmicks, novelties, fads, media fashions and stuff that doesn’t really grow the business. (Reference any Mark Ritson blog for a list.)
    They also need to challenge those that restrict them like procurement. Why are they signing away any flexibility to big agency groups, who no longer retain the best thinkers and creative minds. The best thinking comes from the smaller shops.
    Their newest challenge is how to make in-housing work – many predict that 50% will be expensive disasters with 2 years, leaving many CMOs with egg branded on their faces.
    How brands engage with real community (beyond social media and into the real world) as consumer communities become more powerful. None have a senior role for Community Engagement Marketing (B2C2) in the UK.
    How to defend against new players in the market. Look what Ella’s Kitchen did to Heinz and Cow & Gate.
    Though I think their biggest challenge is how to differentiate the 20% of great new ideas that could make a real difference from the bullshit selling stuff that glitters but will do bugger all.

    Chris Arnold founder of Creative Orchestra and co-founder of CONNECT2 (specialist in B2C2).
    *Author of “FLIP – Unthink everything you know.” (pub 6.19)

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