Death of marketing chief role is grossly exaggerated

To borrow from the famous Mark Twain quote, the death of the marketing chief has been grossly exaggerated, even though a few global CMOs have departed in quick succession.

Nearly three-quarters of the Fortune 500 have a marketing chief and this has declined by only 3 per cent over 15 years.

Every once in a while, the debate around the apparent demise of the role of the chief marketing officer bubbles to the surface, usually fuelled by companies shaking things up in their marketing functions or the latest research on CMO tenure or the supposed strained relationships with their chief executives.

The genesis of the latest noise on this topic is a spate of surprising exits of a few global CMOs in reasonably quick succession over the past few months at UPS, Etsy and Walgreens. This follows similar moves at Lowe’s, Hyatt Hotels, Johnson & Johnson, Uber, Lyft and McDonalds (though the McDonald’s role was reinstated a year later).

It is a big stretch to say these moves represent a worldwide shift to eliminate the role of CMO. In fact, nearly three-quarters of the Fortune 500 have a marketing chief, and this has declined by only 3 per cent over the previous 15 years. Not overly convincing evidence of the hyperbolic assertions coming from some commentators.

These stories seem to conveniently gloss over the fact that every business and brand is different and much is dependent on the cyclical nature of business and the economy.

There is no one-size-fits-all solution to how your marketing team should be structured. Nor is the absence of a CMO role indicative that marketing is not valued as a critical function.

The gradual decline of the tenure of CMOs is also cited as an indicator that CMOs are on the way out. This is nonsense. First, the decline is relatively small (4.2 years in 2022, down from 4.5 years in 2021). Second, 4.2 years on average is not that small these days – definitely not small enough to start predicting an extinction level event. Third, while some CMOs might have been pushed out, it can also be a measure of success as they are poached for bigger roles, or are ambitious change agents that simply need a new challenge after knocking it out of the park.

We also tend to get a little obsessed with the changing nomenclature as an indicator of the decline. This is especially peculiar when these changes often reflect a growing trend of CMOs being asked to take on more, not less.

On our shores, Coles and IAG have moved to a broader remit under chief customer officers. And, at Lion in Australia, the impressive Anubha Sahasrabuddhe has taken on a chief growth officer role that encompasses marketing, technology, strategy, innovation, mergers, acquisitions and partnerships.

Some also point to the troubled relationship between CMOs and their CEOs or struggles to align with the rest of the C-suite as signs that marketing is being pushed out of the leadership group.

While this might be a problem for some, it is a lazy generalisation to paint every business with that brush.

The latest research from Boathouse points to a marked improvement, even a turnaround, with CMOs regaining the confidence of their chief executives. Now 40 per cent of CEOs rate their CMOs as ‘‘best in class’’, up from a mere 21 per cent in 2021. The number of CMOs getting an A grade has nearly doubled to 40 per cent in that time, with noticeable improvements in trust across the C-suite.

But let’s be honest, these numbers are still pretty low and CMOs should hold off on a victory lap for now.

Part of the problem seems to be communication.

Marketing, finance and leadership teams often speak different languages and there can be a misunderstanding of the fundamental role of marketing – especially in challenging economic times.

We need a common language.

It is not just the CEO relationship that is mission-critical for CMOs. The best CMOs know how to effectively communicate the criticality of marketing to finance teams, leadership teams, boards and the market.

The common language is sustainable growth and profit tied to the return on the investment in marketing activity.

But this is just part of the problem.

It is also imperative that CEOs, chief financial officers (CFOs) and boards make the effort to understand and believe in the value of marketing.

In a striking statistic, just 10 per cent of Fortune 250 CEOs have marketing experience and only 4 per cent have held a CMO-like role. For boards it is even more confronting: just 41 of the Fortune 1000 companies have a marketer on their board.

Don’t get me wrong, there are plenty of brands with CEOs at the helm that get it and enthusiastically talk about the value of marketing and their plan to invest more in it. Think Proctor & Gamble, Mondelez and McDonald’s to name just a few.

And across many boards, the CMO role is becoming even more important as customer loyalty, spend and new customer acquisition is being driven directly from brand love and brand fame.

What is clear for any business is that marketing is the primary driver of short and long-term profitability and growth. If marketing is so core to the success of a business, how can you afford not to have a marketer at your top table?

The role of CMO, in whatever form, is here to stay. We need to move away from the obsession with stories on movements, restructures and job titles, to focus on the main game – growing the business.

Josh Faulks is chief executive of the Australian Association of National Advertisers