While still relatively low compared to the average CEO tenure of eight years and the CFO’s 10 years, CMO tenure shows no sign of slowing down anytime soon. In fact, thanks to technology and a better understanding of the marketing profession, CMOs are in a position to keep their jobs longer.
Here are four reasons why we should expect the CMO tenure to continue to grow in 2014 and in the years ahead.
1. Technology has enabled ROI measurement: Marketing has traditionally been a business area that is extremely difficult to measure. Tying marketing activities to revenue has been problematic for some time. Correlating campaigns to revenue or profit was fluffy at best, made more difficult by the complex customer path to purchase.
More recently, however, the trend toward data-driven marketing has been more prominent. CRM, BI, social media marketing, and other marketing automation software have made it easier to manage and accurately measure the results of marketing activities.
While measurement continues to be a challenge for newer tactics, such as social media and content marketing, analytics technology is catching up. Powerful measurement software available in the market today helps CMOs benchmark their activities and quickly make tactical changes. As ongoing advancements more accurately tie marketing activities to revenue, CMOs will be better able to demonstrate the business value they bring.
2. Empowered consumers have a stake in marketing: In the age of the empowered consumer, companies can’t afford to ignore the voice of their customers. In parallel, it has never been easier for companies to get to know their customers. Engagement tools, such as social media, customer communities, and online forums, already let CMOs get closer to consumers. Today, we also have the tools necessary to understand the “why” behind consumer behaviors.
Armed with more information, most marketing teams are becoming more effective and efficient at their jobs. With the CMO’s leadership, more marketers use data to engage and market to current and potential customers in a relevant and timely way.
3. CMO turnover poses bigger risks: The indirect costs of a bad executive hire can cost anywhere between eight to 12 times the misfit executive’s annual salary. With that much cash at stake, some companies will be hesitant to show a mediocre CMO the door if there’s no guarantee that the next one will do a better job.
Companies are also recognizing that short CMO tenures pose challenges. Building brand equity requires consistency and continuity, both of which are difficult to achieve if the marketing team changes people frequently.
More CEOs today appreciate the complexity of the CMO’s jobs. With factors such as big data, analytics, and social media significantly changing the job of marketers, brands are more willing to give their CMOs extra time to achieve their goals and showcase the business results of their efforts.
4. The art of marketing becomes scientific: The shift toward data-driven marketing means the CMO’s profession is now more strategic and less of a guessing game as it once was. CMOs aren’t just called in to come up with clever slogans, funny advertising, or catchy jingles. The new breed of CMOs is a lot more like technologists and analysts: They marry their intuition and creativity with hard data to create more effective ads, drive new-product innovation, and optimize distribution. It’s really no wonder CMOs are set to outspend CIOs in tech purchases by 2017, as noted by Gartner. As the move toward data-driven marketing accelerates, CMOs will become increasingly indispensable in the C-suite.
While the CMO’s life span is driven by macroeconomic trends, there’s more to the story. Advancements in technology and the increased voice of the customer in the decision-making process are conspiring to strengthen the position of CMOs and the marketing teams they lead.