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.
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