Marketing has become a much more important corporate function.
There is no denying that. We live in a world where ad spending will reach close to $500 billion in 2017. Digital advertising had $17.6 billion in investment from US companies in the third quarter of 2016. 2017 will see over $75 billion in digital advertising spend. We are seeing many new competitive forces at play in the marketing services space – this includes the largest accounting and consulting firms, publishers offering services that are typically done in-house or by an agency, platforms selling marketing services and more. There is more consolidation, as the major marketing and communications holding companies continue both their acquisition and investment to growth strategies. Brands – more than ever – need strong marketing leaders, in a world where overall economic growth has been (mostly) flat (or single-digit growth) and technology, disruption and transformation are still turning markets upside down.
You would think that a company’s Chief Marketing Officer would be an anchor in the c-suite and core to the brand’s growth. You would be wrong.
- A CMO who has kept their position for more than four years is above average.
- CMOs have the shortest average tenure in the c-suite.
- That tenure (about 4 years) is half the average tenure of CEOs.
- The position is plagued with high turnover.
- Marketing leadership turnover soared last year with 177 appointments in the last two quarters of last year.
- 2016 saw the highest turnover since the researchers started tracking it four years ago.
- 60% of CMOs being tracked left for a “new opportunity.”
Of course not. AdAge (and the researchers) acknowledge that the CMO role is in high demand, that CMOs tend to be very diverse professionals who get promoted quickly within the organization, and that it’s sometimes the organization’s inability to be aligned with the transformation that marketing requires in this day and age. Still, this is a huge problem. Regardless of whether or not the CMO is leaving for all of the right reasons or being shown the door, it sets the table for a problematic situation where the brand and consumer bears the consequence of this corporate version of musical chairs. Four years is not enough of a tenure to see a brand’s full opportunity blossom. Business trends move quickly, the need to implement technology for the future and secure solid metrics in the coming quarter will never be met if the average CMO is busy looking for their next gig or being cherry-picked to do something else.
Where the marketing blame game lies.
We’re seeing a growing shift in agency compensation models (performance-based and/or value-based compensation models) being pushed out by brands to agencies and media partners with the attitude of wanting a true partner that is invested in the brand’s output. We’re seeing a marketing department that is growing in terms of internal capabilities. We’re seeing a marketing department that is spending on technology as if they were the IT department. We’re seeing a marketing department that is pushing the accountability of their actions over to their media and agency partners to absolve them of any outcomes that don’t render positive results. All of this is fair in love and war, but it’s not acceptable in a world where the brand’s leader isn’t even planning to see things through. It would be easy to push the blame of bad marketing between the brand and their agency partners, this is not the issue to debate, at this point. Here’s what is obvious: brands will not be nurtured to their full potential when the CMO changes with such frequency. It simply can’t. It’s all too frenetic.
Marketing is mission critical.
We need to agree on this. Management consultant, Peter Drucker, once famously said: “Because the purpose of business is to create a customer, the business enterprise has two-and only two-basic functions: marketing and innovation.” The tenure of the Chief Marketing Officer needs to increase. Dramatically. We can’t simply sit on the sidelines and accept this as a “new normal.” It’s too easy to blame this on the new world of work, and that we can’t expect these highly sought-after professionals to sit around. No. We need more leaders to embody the spirit of the job title. Being a Chief Marketing Officer makes you the ultimate steward of the brand. A role that should not be taken lightly. A role that should not be assumed without a firm commitment to see things through.
If we don’t hold the Chief Marketing Officer accountable to their tenure, how can we expect to hold them accountable to the marketing budget?