Are you a CMO?
Or do you aspire to one day become a CMO?
If so, we've got some potentially bad news for you.
Fortune 500 companies and other large businesses are starting to reduce, and even eliminate their internal CMO positions.
What's causing this?
Is this trend going to continue?
And how should you adapt as a marketing professional?
UPS, Etsy, Walgreens, Lowe's, Hyatt Hotels, McDonald’s, Johnson & Johnson, Uber, and Lyft are just some of the major companies that have recently eliminated or reduced their standalone CMO positions. There are some similarities in circumstances and approach between these companies, which we'll explore in future sections, but as you can tell, these are very different types of companies. CMO cuts aren't relegated to 1 industry, nor are they relegated to specific types of companies.
In general, sentiments around the CMO position are weakening as well. The title doesn't generate as much respect as it used to, and organizations are rethinking whether it's even a necessary role to fill.
Why is it that CMO positions are falling out of favor with these large, industry dominant companies?
There are several possible explanations, which intersect in interesting ways.
· Technology and automation. For starters, we're living in an era of profound technological advancement. We have more marketing automation tools than ever before, AI is working its way into almost every marketing and advertising platform, and with the right approach, a marketing department can use these foundational technologies as a source of inspiration and leadership.
With better technology, a company can lead from within, analyzing data and generating ideas to see better results. And with the help of automation, there are fewer needs for human marketers. Naturally, if you rely on sophisticated technology to make marketing decisions, you won't need a human in charge of those decisions anymore.
· Integration of marketing responsibilities into other roles. We're also seeing the integration of marketing responsibilities into other roles. Half a century ago, marketing was an independent silo; developing marketing messages and advertisements was a unique art, often separated from the rest of the business. But today, almost every business operation has an element of marketing to it.
Recruiters and HR professionals need to make sure the company is presented in the right light. Product developers need to align their vision with the brand. And almost everyone in the organization plays at least some role in improving the visibility and reputation of the company. Because of this, marketing departments are being loosely broken up and reintegrated into other departments. This is an especially noticeable effect in combination with the rise of technology and automation; in many businesses, the CTO can do the work of a CMO.
· Declining prioritization of marketing. In some ways, we're seeing a decline in the prioritization of marketing, at least from a high-level decision-making standpoint. Most businesses still rightfully recognize marketing as an important priority, but they see it as subservient to other priorities.
We can see this manifest in the rise of a new type of CEO; CEOs of Fortune 500 companies most commonly come from high-level financial positions, rather than high-level marketing positions. Accordingly, finance takes precedence over marketing in most of these businesses, and CEOs make decisions with the company's bottom line and financial operations as top considerations.
· Generalization of C-Suite responsibilities. Similarly, we're seeing the broad generalization of responsibilities all across the C-Suite. Chief officers of independent departments are expected to understand the inner workings of the business across multiple departments and at multiple levels.
Because of this, we may see a radical transformation of the entire C-Suite over the next decade or two. Soon, individual chief officers from different departments may fade in favor of high-ranking, general decision makers.
· Simple cost cutting. Notably, many companies that have recently cut CMO positions – including UPS and Etsy – did so on the tail end of disappointing financial reports.
It's not uncommon for companies to cut sales and marketing expenses in the wake of an economic recession or difficult financial times, so the decline of the CMO position may be more associated with temporary financial difficulties than a permanent change in how marketing is viewed.
· Higher C-Suite turnover. We've also noticed that C-Suite turnover is higher than ever before. These positions are highly demanding, highly stressful, and yet highly sought after, so it's only natural that people want to leave at a higher rate than they do in other positions. Still, this can't possibly explain the entire phenomenon, as CMO positions are being reduced or eliminated more frequently than other positions in the C-Suite.
So does this mean that CMOs are about to go extinct?
Probably not. Despite the rising trend, only a small percentage of Fortune 500 companies have taken the step of formally eliminating or reducing their CMO positions. With so many potential explanations for this behavior, it's unlikely that this is the start of an irreversible trend.
Still, we must acknowledge that the CMO role is changing, and so our perceptions about marketing in general. This isn't necessarily a bad thing for marketing professionals or businesses, but it's something we should work to understand and acknowledge.
If you're a decision maker of a major business, you might be toying with the idea of reducing or eliminating the CMO position in your business for some of the reasons we've listed above.
So is a CMO reduction the right move for your business?
That depends heavily on your unique situation.
We can address a few important considerations here.
First, if your company is experiencing financial hard times, or if your growth has stagnated, your first instinct may be to cut expenses related to marketing and advertising. However, this is usually a bad move. Marketing and advertising are the foundation of your organization's growth, so cutting spending in these departments is likely to make your financial challenges even more difficult.
Instead, it's typically better to reallocate how you invest in marketing and advertising. Replacing or augmenting the CMO position may be a better idea than eliminating it, and investing in different strategies may be a better idea than removing all marketing investment.
Second, it's important to evaluate your organization’s priorities and how those priorities relate to each other. Is marketing one of your top priorities? And if so, do you see it as a standalone, independent department or as something that's closely integrated with other departments?
If you view your company's marketing as being more related to technology than traditional marketing and advertising, it may make sense to do some departmental shuffling. And if you want to make more financially impactful decisions, it may make sense to prioritize your financial leaders over your marketing leaders.
If you do decide to reduce or eliminate your CMO position:
· Take some time. We understand that it’s tempting to cut sales and marketing if your company is going through hard times, but it’s important to avoid knee-jerk reactions. Take some time to analyze your organizational structure and your long-term priorities before you make a final decision.
· Appoint a final authority on marketing-specific issues. If you do eliminate your CMO position, you'll still need a final authority on issues specifically pertaining to marketing. Make sure you have a leader or advisor in a position to do this. If all else fails, you can roll these responsibilities into the CEO position.
· Clearly define and organize your marketing responsibility distributions. Create a clear hierarchy and a cohesive system for organizing the distribution of marketing responsibilities. Since you won't be cutting marketing and advertising altogether, these tasks need to be concretely disseminated. For example, you may assign certain marketing responsibilities to your data and technology departments.
· Ensure your C-Suite executives have marketing skills (or a suitable alternative). In pursuit of a more generalized C-Suite, it makes sense to hire executives who have marketing skills and experience. Failing that, they should be adaptable enough to learn and respond to marketing concepts competently.
· Employ the best technology (with human oversight). Today's best marketers are the ones who can make the best use of available technology, so make sure you're employing powerful data analytics and automation tools to this end. Of course, it's also important not to put too much faith in technology; make sure you still have human leaders overseeing their responsible use.
If you're reading this as a CMO, or as a prospective CMO, you might be concerned about the integrity of your job – or the feasibility of your future aspirations.
As we said earlier, it's unlikely that the CMO position is going to be eliminated permanently across all businesses. So in that respect, you shouldn't be too concerned about losing your career trajectory at this time.
However, we can offer some advice on how to survive the coming changes to marketing departments and leadership positions in the next several years.
· Think beyond marketing. Today’s CEOs are less “Chief Executive Officers” and more “Chief Everything Officers.” CEOs have to be generalists capable of incorporating insights from many different departments into their business decisions. If you want to thrive in the C-Suite and use your marketing expertise in a genuine leadership role, you need to think beyond mere marketing. Adopt skills and experiences that allow you to mix your marketing expertise with technology expertise, financial expertise, and business development expertise. Even if CMO positions get cut with greater frequency, you'll always have a place in leadership suites.
· Become a data analytics master. Today’s top marketing results are a byproduct of correct interpretation and application of data insights. Accordingly, you should strive to become a data analytics master. It's on you to become familiar with the latest technologies and advancements in the realm of gathering and analyzing data – and if you can do this, you'll not only be a more effective marketer, you'll also become a more effective business decision maker.
· Compete with CTOs. If CMO positions are no longer available, why not try to become a CTO? Chances are coming you're already intimately familiar with the technologies necessary to make a business competitive in the modern era, so why not expand that area of your skill set? Doing so could easily future proof your career, enabling you to carry your marketing expertise into technology roles or potentially allowing you to flourish in a slightly different career path. Technology experts are likely to be indispensable for decades, if not centuries to come.
· Aggressively pursue better results. Remember, many modern CEOs come from a financial background, and they care about the company's bottom line more than anything else. In many cases of CMO positions being cut, reductions came only after disappointing financial results. If you want to retain your marketing prestige and seek higher marketing roles in these powerful organizations, you need to prove your value. Relentlessly pursue better marketing results, however you can to justify your worth.
· Take risks to innovate. Similarly, it's important to take risks to innovate, as complacent, traditional CMOs are the ones on the chopping block. Yes, taking risks could expose you to new vulnerabilities, but that's what it takes to be a valuable, effective leader in today's marketing departments.
· Don’t be afraid to switch jobs (and companies). Finally, don't be afraid to jump ship prematurely. If you don't like the direction your company is heading, or if you have concerns with how marketing is being treated, don't hesitate to switch jobs and/or companies. Job hopping is one of the best ways to increase your salary and improve your status, generally.
Marketing is changing.
Technology is evolving.
And businesses everywhere are trying to adapt in anticipation of whatever happens next.
In this confusing, exciting, and somewhat overwhelming era, it pays to have a marketing partner who's just as experienced and agile as you are.
If you're ready to start the conversation, reach out today for a free consultation.
%201.svg){kind=logo}
.svg)
