Advertising

With rampant turnover among big company CMOs, marketers grapple with the changing role

Key Points
  • CMOs from some of the world's biggest advertisers just gathered in Orlando for the Association of National Advertisers' "Masters of Marketing" conference.
  • The theme was "Driving Growth," but behind the scenes a big topic of conversation was the changing role of the CMO.
  • The conference gathered marketing leaders from Dunkin', Bank of America, SAP, P&G and more.
Dunkin' CMO Tony Weisman at ANA "Masters of Marketing" in Orlando, Florida.
ANA

ORLANDO, Fla. — As some of the world's biggest companies slice off the title of CMO, marketers pondered an existential question at one of the industry's most important conferences.

The Association of National Advertisers' Masters of Marketing conference brought thousands of marketing leaders to discuss how they're creating growth for their companies in a landscape where consumers are snubbing advertising and increasingly looking for more from the brands they buy from. The preceding year brought big changes for marketing. In June, McDonald's global CMO left and the company said her role would not be directly replaced. Similar changes occurred at many companies, including Uber, Coca-Cola and Johnson & Johnson.

The responsibilities of the top marketers at major brands have sprawled in the last several years, meaning they're responsible for more than ever before. The CMOs who worry about advertising and nothing else are being pushed out, experts say. But even as the title may change, the responsibilities remain crucial as companies need to understand how they can connect with culture and know what consumers want.

One closely watched yardstick for CMO tenure is executive consulting firm Spencer Stuart's "CMO Tenure Study," which shows the average CMO tenure among 100 of the most-advertised U.S. brands has fallen slightly to 43 months in 2018, compared with 44 in 2017. The tenure has risen from 24 months of average tenure in 2004, but many in the industry point out turnover is more rampant than in the CEO or CFO role. Spencer Stuart said the relative stability of the role among the top 100 advertisers might mask "the volatility of the role more broadly." Plus, in 2019, there have been a slew of CMO changes outside the top 100 advertisers.

But even though many companies are getting rid of a traditional CMO title doesn't mean the responsibilities of a company's top marketer are going away. Those responsibilities are at times going to other leaders within an organization, or a company is hiring someone with a different kind of title, like "chief growth officer" or "chief brand officer."

"Most people would tell you that this job has gotten exponentially harder in the last few years," Dunkin' CMO Tony Weisman said during an interview with CNBC at the conference, which ended Saturday. "I think what they are recognizing, smartly, is that when you see chief customer officer, chief growth officer, those are just different ways of saying it. … Good organizations that have the right CMO role were already thinking about growth and the experience and all that."

For companies where a CMO was solely responsible for making ads, those days appear to be over. Weisman spoke onstage at ANA about how Dunkin' is connecting with consumers with everything from the coffee itself, branding and even stunts like Dunkin'-themed nail polish.

"In a lot of cases, what you're seeing is organizations where the CMO is really just buying and making ads, not worried about technology, not worried about the experience, not worried about conversions — that's over," Weisman said.

That means it's a bit of a do-or-die moment for CMOs who can't pick up some of the more technical or privacy-related functions needed for a marketing leader of today.

"A lot of marketers have grown up in this environment and have had to learn a lot of new tricks really quickly," he said. "None of these CMOs were trained on data platforms. None of them were trained on data security. The next thing you know you've got a deal with a platform or whatever and they breach your data, you're the one getting the call from the CEO."

Alicia Tillman, CMO of software giant SAP, told CNBC marketing is a rare function that touches many other areas of a company, which means the "stakes are pretty high and they can often be in conflict with each other." Tillman spoke onstage about how brands can drive more meaningful connections with consumers to make them more loyal.

"When you have so many dependencies on you, you often can carry a perception that, as the old saying goes, 'you're the jack of all trades and the master of none,'" she said. "While I believe companies believe they need marketing, I don't think they're necessarily willing to die on the vine for marketing."

She said CMOs can do more to prove their worth.

"Where I feel we can extend the tenure of CMOs is when CMOs are being very up front and understanding what's needed of them, commitments on what marketing will deliver and how they're going to measure success," she said.

Other industry figures at ANA agreed the the CMO role is different than just a few years ago.

"It's a vastly different position than it was five or six years ago," said Avi Dan, founder and CEO of Avidan Strategies. "The CMO always has been the outlet to the consumer. Now companies need to understand the consumer a lot better because the consumer is changing and [CMOs] need to start breaking the silos."

Dan pointed out the kinds of people entering the role have a different pedigree than they used to have. Someone like Adolfo Villagomez, who was recently named CMO and senior VP of online at Home Depot, had joined the company as VP of merchandising strategy. Others are coming into the position from more digitally focused roles instead of people who grew up through the marketing ranks.

"You either adjust completely to this new world or you're not going to be there," Dan said. "You can't just be the guy who makes the ads anymore. That's not what people want out of companies right now."

Dana Anderson, chief transformation officer of strategic advisory firm MediaLink and former CMO of packaged goods company Mondelez International, attributes some of the tumult in the role to the fact that CMOs aren't given equal footing in the C-suite.

"Most CMOs are not at the CEO's table, so they're usually not invited to decide what they're going to be measured on," she said.

She added that top marketers need to find metrics that drive growth instead of trying to measure everything and grapple with what it all means.

"Every industry and every company has to figure out their set [of metrics] that are really predictive and helpful. And it's hard," she said.

Coming together

At a conference like ANA, many marketers are trying to figure out which problems they have in common and which make sense to work together on.

SAP's Tillman said one issue CMOs might join together on is the creation of more standardization in the area of data vendors. She said marketers are using a number of services from a list of vendors that seem to grow exponentially.

"It creates this incredible fragmentation of us trying to extract the data and derive intelligence from it," she said. "If we can create common platforms and systems, it actually helps support the needs that customers have relative to privacy and access privacy."

Procter and Gamble Chief Brand Officer Marc Pritchard, who also spoke at the conference about how marketers and different companies can drive growth together, said that kind of "rising-boats" philosophy is important at a time like this.

"The best way for businesses to grow is to grow the market. ... Since marketing has been around, the whole mindset has been steal market share from each other," he told CNBC. "All that does is invite price competition and destruction of value, as opposed to creation of value through innovation and creativity. That's why we focus on ... looking at ways to do that and build a market."

Dunkin's Weisman said those conversations about how to benefit the market are important.

"I think the underlying insight for all of us is how do we help each other in noncompetitive ways? Because we're all at risk," he said.

Correction: This story has been updated with Dana Anderson's correct job title.

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