Is the stature of CMOs on the rise?

Many in our industry aspire to become CMOs someday. But is it a role that is becoming more or less important over time?

Compared to other C-suite members, the CMO role is poorly defined and the tenure exceedingly short. The title itself has been subject to a rebranding exercise (Chief Growth Officer, Chief Experience Officer, Chief Commercial Officer, etc.) to better align marketing with what the business actually values. And in a number of prominent companies, we’ve seen the role pushed a layer down or eliminated entirely.

Still, a number of consultants that follow CMOs closely – McKinsey, IBM, Forrester, and Deloitte, among them – have published studies that suggest that the CMO’s value and reputation in the C-Suite and the boardroom is, in fact, on the ascent. Several factors appear to contribute to an elevated CMO reputation:

• With the rise of digital marketing, CMOs have become more accountable for growth and better able to sell their recommendations and ideas with data.
• Companies are shifting from product-centric to experience-centric models. Improving customer-experience is a top priority, and CMOs, being closest to the customer’s needs, are best positioned to architect the experience.
• CMOs have been connecting the dots between the customer engagements they orchestrate and the KPIs that matter to business – pipeline, revenues, profits, etc.¹ – making them better aligned with other areas of the business, including sales, IT, and finance.

Moving beyond “Chief Storyteller”

CMOs are getting better at quantitatively demonstrating the impact of their marketing spending: 1 in 2 B2C marketers could do this in 2018, up from just over 1 in 3 in 2013.² And their role is expanding beyond Chief Storyteller to Growth Driver, Innovation Catalyst, Capability Builder and Customer Champion.³

In our interviews with these CMOs, we were able to get their views on the evolving state of CMO reputation. What we heard: there appears to be a steady ascent – if not always in a straight line.

Q

P/M: You’ve been in senior marketing and CMO roles for more than a decade at multiple companies. How has the CMO role changed over time?

A

Chris: The CMO role continues to increase in importance, as we’ve never seen a bigger need for interconnectedness between members of the executive team and the activities the CMO is driving. There is a growing realization that customer experience matters. Marketing may be at the core and may be charting that customer experience, but it takes a lot of other groups in the company to optimize the experience. If you’re working on Brand Purpose, you’ve got to bring in the head of HR. CMOs are becoming prominent buyers of technology, and so they work closely with the CIO, the CTO. CMOs have to be on the same page as the CFO in terms of ROI. The CMO’s ability to leverage the marketing toolkit to drive business outcomes means their peers see them as business partners versus the guys who do the emails, the press releases, the events.

Gary: Digital marketing has changed everything. If you don’t have more of a digital-first mindset, you’re not going to be competitive. And if the CMO is not competitive and doesn’t understand the digital space, the company will not be competitive. It has forced marketing to become not just more data-driven, but exclusively data-driven. And it is just as accountable for driving measurable performance as any other discipline across the business – just as accountable as finance, just as accountable as sales. So many of our digital marketing disciplines have become a science. Search engine optimization (SEO) is a basic example. Constantly measuring the tiniest movement in what drives traffic to your website, the number of pages that people visit, how long they stay on each page, click paths, and probably 50 other metrics are pivotal to marketing performance today.

Rishi: I find that the job is becoming increasingly expansive and complex. It’s one of those few roles that everyone thinks they understand but few do – and it requires increasing levels of knowledge and expertise. Anything not defined clearly as another C-Suite job tends to become the CMO’s job. So, being in the role of CMO is getting quite hard and complicated.

Q

P/M: How would you characterize the way CMOs are generally viewed by other C-suite members and board members – not necessarily within your own organization?

A

Rishi: I think marketing as a function is viewed very positively by the C-suite. Everyone nowadays understands the power of marketing – and that it’s more than just creative (although the creative aspect is more important than ever). They value it because it’s technology-based, measurable and data-driven, but also appeals to emotions. The challenge is that they aren’t always satisfied with it. In part, because they don’t understand it – board members generally came up in sales, finance or legal or technology, but rarely marketing. You rarely see a board with a true marketer on it. Part of the challenge is that marketing changes over time, and more and more things become marketing. The finance function never changes. It’s in a very specific box and never takes on more scope or less scope. It’s a static thing. The problem with marketing is it’s always evolving. Sales targets may go up, but the responsibilities for sales never change. But when new priorities arise that are not clearly finance or IT or product, people just look to marketing and say, “This is marketing’s role.” That’s the challenge of the role.

Liz: CFOs tend to be the ones who are the most concerned about what needs to be spent in order to achieve a marketing goal. They tend to think of marketing as overhead versus an investment. With quarterly reporting, there is a tendency towards short-termism. But in our business, the purchase decision process is extremely long – there is no seasonality. You don’t use up the product during a fixed length of time and need to repurchase it. So, it’s difficult to predict with certainty the timing of a purchase. A marketing investment is not necessarily going to be paid back in the short term.

Q

P/M: Are there different types of companies where the CMO is more likely to have gained stature?

A

Kristin: The definition of marketing and its importance varies a lot depending on the industry you are in. In consumer packaged goods (CPG), marketing is considered the general management function. It’s very holistic, responsible for the P&L, and has a strong point-of-view on customer innovation. You are the middle of the hub as the cross-functional leader. In some financial services and insurance companies, marketing can be seen as a necessary evil, with a lot of spending required just to maintain share in mature, zero-sum-game markets. Marketing responsibilities are divided between brand and creative groups and digital advertising / advanced analytics groups. Last, it may be difficult to show the value of marketing in these industries. At my current e-commerce company, the CMO’s role is huge. I have a GM, who is the CEO, but I’m treated as a co-partner. To understand CMO value in a company, I’d ask the question, “How is the CMO measured and do they own business results?” In CPG, I owned the P&L. Currently I’m responsible for revenue. I’m not given a budget every year. Instead, I’m given ROI targets, and they’ll keep giving me money as long as I hit the targets. But I have to say, these roles are very rare.

Gary: There are companies that are more sales-driven and they believe the marketing organization is there to support the business, and there are companies where marketing has been relied on to drive the business. In companies where marketing is expected to drive the business, the stature and visibility of the CMO is higher. High-growth companies are much more reliant on marketing driving the business. At Automation Anywhere, 70%–80% of the pipeline is driven by marketing in some regions with other regions much less than that. But a high percentage of the sales pipeline in this company is driven by marketing.

Liz: In the business of law, having a CMO is still relatively new. The notion that one needs to elevate a marketer to a C-suite level indicates that marketing can bring strategic value to the company versus serving a functional need. There’s the old cliché: is marketing overhead or an investment? If you just think it’s overhead, you are going to tend to have lower level people filling the task – versus saying this is elevated to an important and strategic role in the organization.

Keep reading! In Part 2 in our three-part CMO series, we’ll explore how data and customer experience are elevating the CMO’s role.

¹ Deloitte, The 5 roles of the CMO, 2019
² Deloitte CMO Survey, Spring 2018
³ Deloitte, The 5 Roles of the CMO, 2019
⁴ Deloitte, CMO Survey, August 2019