Is the CMO role doomed?
In recent years, several high-profile brands such as Coco-Cola, Gap or Hyatt Hotels have eliminated the Chief Marketing Officer position from their C-Suite. Instead they are choosing to merge the marketing function into a more commercially-focussed role, such as Chief Data Officer, Chief Revenue Officer or Chief Commercial Officer. So why have these household names decided to ditch the CMO role?
Dipanjan Chatterjee, the VP and Principal Analyst of Forrester Research, feels that the problem is down to CMOs failing to manage the founding principles of marketing; the 4 Ps. He says that CMOs have ceded too much responsibility to sales teams and other functions and are no longer in control of the full marketing mix, choosing instead to concentrate purely on campaigns and communications. This has allowed other departments to seize power.
“The soon-to-be-extinct CMO is the one that does not embrace the full spectrum of marketing activities. To fixate on one slice of marketing that is focused on communication is to turn away from the other three slices that feed the profit engine.”
Mastercard CMO Raja Rajamannar feels that the problem is down to the rapid influx of new technology. This has created a more level playing field for smaller brands and put pressure on budgets – CEOs want to know exactly what they are getting for their money. Rajamannar feels that too few CMOs are able to prove the link between marketing investment and financial results. Boards are not interested in brand awareness or consideration; they want hard data, and if the CMO is unable to provide that data, it leaves them vulnerable to other departments who can.
“Because many CMOs have risen through the creative route, much more than the financial route, they are like a rabbit caught in the headlights. They talk about jargon and marketing KPIs, which the CFO and CEO could care less about – they are looking for financial results. Is customer growth happening, is my profitability increasing, what is marketing doing to my EBITDA?
“In that scenario, some companies are losing patience and replacing CMOs with a chief revenue or chief growth officer. Some are not even from a marketing background. When that happens at several companies, that is an existential crisis.”
One of the most pressing problems for the marketing industry right now is attracting the next generation of young marketers. Fewer students now see marketing as a good career option and eliminating the CMO role leaves the marketing career path without a pinnacle to aspire to, which is likely to further discourage new marketers.
So how can the industry respond to this crisis?
Rajamannar believes the answer lies in helping young marketers develop a more rounded skill set with a variety of experience. Aspiring CMOs need to have a firm grasp of the 4Ps and consumer insight, but they also need to be digitally savvy and able to understand data and use it to prove the value of their work.
Marketers will no longer be able to progress up the career ladder simply through increasing specialisation. Instead, they need to have a more typical managerial skill set, with a strong grasp of technology, data and business, but also a good grounding in marketing fundamentals.
Mastercard has created a programme to cross-train marketers in areas where they feel they need more knowledge. As well as training and certification, the programme also offers reverse mentoring and job rotation, to fill in any skills gaps and create more well-rounded marketers who can then move up into senior management. Perhaps the time has come for more companies to adopt this approach.