Why CMO tenures continue to shorten
And what can be done about it
We can’t help but pity the misunderstood CMO. Today’s chief marketing officers find themselves in highly visible roles that are rapidly changing yet too often ill-defined. The length of their tenures has been declining for years especially relative to their C-level peers, and new research suggests that they are generally distrusted by the very people who hire and work alongside them. The CMO’s dilemma is unlikely to improve unless companies reimagine the CMO role, change their perception of what deliverables are realistic, and/or give CMOs the resources and runway they need to succeed.
Until then, the CMO role will continue to be challenging and misunderstood, according to a new study from the agency Boathouse, which surveyed 150 CEOs from some of the largest companies in the US. It found that CEOs largely see the CMO as having clout, with 86% believing that the CMO has the power to influence key C-suite decisions. Nearly two-thirds also view CMOs as performance-minded, and nearly 60% believe CMOs understand shareholder goals.
That’s all great, but here’s where perceptions can go sideways: Only 34% of CEOs expressed “great confidence” in their CMOs. Even fewer — 32% — trust their CMOs. And it gets worse. The vast majority of CEOs (80%) said CMO turnover is a sign of CMO failure. While 62% of CEOs in the study acknowledge the marketing environment is more complicated than the overall business environment, 38% believe CMOs are failing at such a high rate because they have the wrong skill sets.
Fifty-eight percent believe CMOs speak their own language — aka jargon. Fifty-six percent said the CMOs are more committed to themselves instead of the CEO and board. Only 4% of CEOs in the survey characterized the CMO as the most trusted member of the C-suite. Ouch.
This dim view of the CMO has even been reinforced in the industry trades in a way that's less common for other C-suite roles. In late 2020, for example, Ad Age published a story about Bozoma Saint John becoming the new CMO at Netflix. The article focused on how Saint John , a lauded marketing leader, had worked for four brands in four years. The original headline: "The CMO most likely to jump jobs in 2021."
"The average tenure of a chief marketing officer today is 41 months, according to a recent study by executive recruiting firm Spencer Stuart. While that period is a decline of two months from 2019's 43-month tenure, it's still triple the average length of time that Bozama Saint John has spent with a company in recent years."
After a backlash, Ad Age changed the headline to "The most in-demand CMO of 2020" and apologized.
As we’ve previously written, the CMO is a strategic role that’s been shoehorned into a tactical timeline. They are expected to perform magic in a relatively short period of time. The median tenure is 25.5 months, according to Boathouse, the lowest in at least a decade. That doesn’t bode well for executing big projects, especially in complex organizations. In fact, it’s a recipe for near-certain failure. Other roles in comparison have much longer tenures. The CEO, for example, stays an average of 6.9 years, followed by the CFO (4.7 years) and CIO (4.6 years).
Consider what’s possible in the average CMO tenure. To begin with, it takes about six months after starting a job to truly get a sense of the lay of the land at any new company. To mark the start of a new era, a new CMO may start with a bang — perhaps an agency review or a rebrand. The honeymoon’s usually over about six to nine months into the job.
After that, most CMOs have 12-18 months to execute some sort of Big Project. That could range from revamping the company’s marketing technology stack to retooling the team and their skills, charting a new data strategy, or otherwise setting in motion some sort of enduring foundation that connects marketing efforts to business outcomes in order to expand the bottom line and uncover new business opportunities. You know, magic.
If the median CMO tenure is 25.5 months, they have about a year to pull all of this off. But if anything happens to a company beyond the CMO’s control — like a pandemic, for instance — the opportunity to execute that Big Project might disappear altogether. Even if the CMO can successfully pull off their Big Project, they may still see next year’s budget slashed since the rest of the C-suite often has a hard time comprehending the business value they create. That will push many CMOs for the exits, with their last six months often spent wrapping up loose ends and preparing for their move to the next brand.
What will it take to improve CMOs’ chances for success, reverse their shrinking tenures, and change the perception of the marketing function for CEOs and boards? Do we need to redefine the role, recast our measures of what realistically constitutes success, or change how companies support CMOs to succeed?
The CMO’s role is changing, especially since addressability ushered in a world where every investment they make can be tracked and connected to an outcome. Aside from marketing, today’s CMO must be fluent in technology, finance, data privacy, security and transformation. They must be able to clearly communicate the return of their marketing investments and connect their efforts to the bottom line without resorting to marketing jargon. This evolution creates challenges for both legacy marketing professionals (who are steeped in agency orchestration but short on technology expertise) and a newer generation of hands-on CMOs (who can adeptly manage seven-figure digital strategies but are over-reliant on technology and lack more holistic omnichannel experience).
As the role's needs shift, the emergence of the chief marketing technology officer is an interesting one. Creating a new role may make it easier to recruit and retain the small minority of employees who can bridge that gap between legacy orchestrator and new-world implementor. A big focus is the marketing and operations stack, including which parts must be part of it and owned by the company. Choosing technology vendors has historically been the CTO's job, not the marketer's, which can partly explain why brands frequently churn through new tech configurations involving agencies, vendors or their in-housing operations.
The measures of success
Earlier generations of CMOs were a mix of orchestrator and diplomat: They had to make sure that the multitude of agencies they worked with all delivered what was needed and didn't charge all too much. The data for metrics of success usually took at least six months to collect and report, by which time any drop in sales could be described as a “Oops, that must have been a fluke” or “ere's what we've learned so we don't repeat that mistake again.” The marketing world in which they came of age also revolved around the 4 Ps — product, price, place and promotion. These are often negotiated in near real-time now (think along the lines of how dropshippers optimize their spend and product price daily/hourly) and traditional CMOs find themselves may find themselves short a few Ps.
But managing a budget that is meant for drawing down every year is different from managing a real P&L and making decisions that affect the company’s bottom line. Many CMOs — in spite of their decades of experience and MBAs framed on their office walls — had simply never done this before. Today’s CMOs need to shift more to an architect/practitioner mindset, with an understanding of technology, operations and execution for all relevant channels.
What are the metrics CMOs should embrace? We can think of several:
Marketing delivery costs: CMOs can optimize marketing delivery costs by selecting the right technology, execution partners, and functions they should own vs. outsource. A hybrid right-housing approach — building out internal expertise in areas that make the most sense for an organization — can lower costs and improve control and transparency for many companies. If CTOs are awarded bonuses for moves affecting overall technology architecture and cost, why not CMOs too?
Flexibility and new channels: Marketing is constantly evolving, so it’s really not enough to just re-hash last year’s media-mix model, factor in a budget increase, and call it a day. Instead, companies need marketing agility — the ability to react to and take advantage of new information and events in a way that enhances the brand and avoids embarrassing marketing failures like the Sherwin-Williams TikTok missed opportunity. The paint company’s internal silos contributed to a PR headache for the company when it fired an employee who was shooting viral TikTok videos of himself mixing paint (and building a million-plus following in the process). Sherwin-Williams would have been better served reallocating a bit of budget to this emerging marketing opportunity.
Clarify which cross-functional KPIs marketing owns and contributes to. Even though marketing is a distinct functional C-level role, CMO responsibilities and goals increasingly overlap with other functional leaders in the C-suite; for example: CROs are responsible for all revenue, but CMOs are tasked with customer acquisition (new customers = new revenue); do the two share the OKR? CTOs are tasked with managing the tech stack and staff supporting a company’s technology; but CMOs increasingly have their own stacks -- when it comes to critical assets like potentially sensitive customer-level data (that in an increasing number of jurisdictions requires security and compliance) With the overlap across many functions, CMOs can act as a unique internal connector -- which is why that CEO-CMO trust stat of only 32% is particularly troubling.
The role of a CMO is starting to sound really thankless -- even if one succeeds, it seems more prudent to jump ship to other companies to repeat that success playbook than stick around and continue building. In this shift from orchestrator to operator/executor we see two greenfield opportunities to claim additional dimensions: one external, one internal. On the external front. CMOs can step in to own overall customer experience. It may seem silly, but in many traditional companies noone really owns this explicitly. As more and more customer interactions happen in digital channels, it’s wise to have someone own the entire experience of how both prospects and existing customers can interact with a brand. On the internal front, CMOs of complex non-digitally-native organizations can find themselves as instigators of digital transformation and champions of deeper necessary organizational change (although that requires ample internal political capital - something CMOs currently chronically lack). We’re willing to bet that over the next 5 years we’ll see more CMOs embrace what we’d currently consider marketing-adjacent functions and become more versatile members of the C-suite.
What’s the metric that can be used as a leading indicator of improvement of overall CMO outlook? Tenure length seems obvious, but it hides the complexity of very different marketing needs depending on what stage the company is in. Our early favorite may be that trust stat on how many CEOs trust their CMOs. What’s yours?
Thanks for reading,
Ana, Maja, and the Sparrow team
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