In the last few years the marketing industry has seen quite a round of musical chairs for CMOs and marketing executives. Disney’s former Chairman of Direct-to-Consumer and International Video, Kevin Mayer, left to become the CEO of TikTok and more recently, the former CMO of AT&T Fiona Carter left for Goldman Sachs just last week. These intervertical swaps during the pandemic highlight a greater shift that has been happening in the marketing and advertising industry these last few years: brands are trying to rebalance their branding and media strategies.
Although most big companies employ CMOs, the title has become less popular in the past few years as marketing increasingly overlaps with other business drivers like innovation, analytics and strategy. CMO titles have been eliminated or gone unfilled this year at brands including Uber Technologies Inc., Johnson & Johnson and Beam Suntory Inc.
However, amidst the coronavirus, CMOs have started appearing more and more in the headlines, with the industry as a whole examining the title and the importance of the role itself. There’s been plenty of debate over the title, most notably at Coca Cola, where the role of Global CMO was filled in December of 2019 after almost 3 years of dissolving the title. Below is insight from Christine Heckart, a former Chief Marketing Officer who is currently the CEO of Scalyr, on why she felt it important to change the CMO title from Chief Marketing Officer to Chief Market Officer.
“Marketing roles have largely been made impotent through a combination of title diffusion (there are also chief product, digital, revenue, customer, innovation, growth, etc. etc. officers….all of which take the soul from marketing) and role diffusion. Marketing has to cover a huge range of activities from demand generation (strategic market shaping), lead generation (tactical customer stalking/nurture), Public Relations, Analyst Relations, web/social, product/solution, event/experience, and so on. As such, all have become tactically focused on the “ING” or tactical activities that can be easily measured on a granular, daily, basis) instead of the Market (strategic objectives that drive revenue and growth and can be inferred through measurement of KPIs like share, books, penetration, growth rate, etc.)”
It seems that the increased emphasis on the CMO title overseeing strategic moves overlaps a time where there has also been a cross-industry swap of CMOs, leading to a trend where brands are prioritizing diversifying and rebalancing their media strategies.
Announced mid-May 2020, former Chairman of Direct-to-Consumer and International Video at Disney, Kevin Mayer became the CEO of TikTok and COO of its parent company, ByteDance. Right before Mayer was announced as the new CEO of the streaming service, TikTok launched its first TV ad, which gives us a clue to why they hired someone with a streaming background. After booming growth, TikTok is trying to appeal to broader audiences beyond Gen Z– evident by the move to television.
TikTok’s “A Little Brighter Inside” TV Commercial
Many marketer positions are merging with other roles. In the example of McDonald’s, the fast food giant dissolved the role for a Chief Growth Officer position in July 2019. Yet, after an 11 month vacancy, the role was filled by Alistair Macrow, former CMO of McDonald’s international business, as SVP, chief marketing officer in June 2020.
McDonald’s naming a new global CMO is another sign that the pendulum is potentially swinging back in favor of marketing leaders who have broad oversight of their brands, a change potentially spurred by the tough business realities of the coronavirus pandemic. The downplaying of the CMO role in favor of various SVP appointments centered on growth and technology has become common in marketing in recent years, but the trend shows some signs of reversing.
In fact, Coca-Cola brought back the title after 3 years without, in attempts to unify all marketing operations. Coke resurrecting the global CMO role arrives on the tail end of a year that’s seen chief marketers battered by volatility, and in some high-profile cases, the elimination of their role entirely. Coke in some ways helped lead the pack on this trend when it chose to switch focus from a CMO to a chief growth officer to streamline marketing operations in 2017. The move was seen as potentially game-changing, as the steward of the some of the world’s most enduring, iconic consumer brands appeared to acknowledge that marketing was increasingly defined by a mastery of technology and performance-minded skills.
Other organizations followed suit in pursuing CGOs or tweaking CMO duties to layer in aspects of digital, data and growth strategies. Coke shifting gears back toward a CMO in the traditional sense, albeit one tasked with the steep order of integrating marketing and operations, is a potentially promising development for marketers heading into 2020, a year when many in the industry are expected to recenter their efforts on brand-building.
Companies like Gap, Adidas and Kraft Heinz have recently admitted to losing sight of brand-building at a time when delivering on short-term results is paramount and loyalty can be hard to retain with choosey consumers like millennials, as reported by CNBC.
“Short-termism” — the demand to provide results on a shorter timeline, often with smaller budgets than in the past — has become a common ailment impacting CMOs at the global level, according to the latest annual survey of the position by Dentsu Aegis Network.
The Harvard Business Review outlined four drivers causing marketers to focus on the present at the expense of the future:
Pressure for short-term earnings: Marketing’s role is often viewed as a lever for driving short-term sales instead of the long-term growth engine it has been demonstrated to be.
Too few strategic roles: Marketers are often assigned tactical roles, such as managing social media or promotions. If marketers are not given a seat at the leader’s table, they will not have the credibility to inspire or lead strategic change.
Role ambiguity: Additionally, in the February 2019 CMO Survey, only one in three marketing leaders reported that they felt their role was “very clear.” If they feel their roles are too ambiguous, we believe it is likely that marketers may focus on immediate priorities rather than long-term strategies in order to make quick wins and protect what they can control.
Marketer compensation structure: Many marketers report that their compensation is performance-based. This imbalance can lead to a focus on short-term success in financial metrics to achieve performance bonuses, rather than focusing on long-term strategic objectives associated with building equity in the firm.
The notoriously short-tenured CMO position continues to experience a rocky transformation as digital’s ascendance demands marketers wear more hats related to technology and growth, but organizations often don’t prioritize marketing when it comes to fresh areas of investment. Tighter budgets and time constraints potentially widen a digital skills gap affecting chief marketers. Dentsu’s survey highlights areas of dissonance, such as how eight of 10 surveyed CMOs believe they must transform to meet the innovation requirements of digital, yet the same executives rank “transformation and innovation” as the least important roles for marketing. In terms of data management and analytics, 84% of respondents identified them as important, but just below half felt confident in executing on these crucial areas.
Pressured by the pandemic, brands will need to refocus on brand-building and long-term strategic moves over short-term tactical goals.
Will Swayne, global president of client solutions at Dentsu Aegis Network, said in a statement,
“Much has been written about the optimal mix between performance and longer-term brand investment, but that is no longer enough… The new challenge for CMOs is to balance those pressures with the existential need to put the marketing function at the heart of customer-led, business transformation.”
The survey’s findings continue a trend that’s steadily risen for years as more of marketing centers on data and personalization, with traditional creative and brand-building duties taking a back seat. CMO positions remain more volatile than other C-suite appointments, with the average tenure landing at 43 months, according to the executive search firm Spencer Stuart.
The past few months have seen a notable level of CMO churn at high-profile companies. In another big move for TikTok, streaming platform Hulu’s vice-president of brand marketing and culture, Nick Tran, exited for TikTok to take on the role of head of marketing for North America. Freeform’s Tricia Melton Named CMO of New Warner Bros. Division. She follows Tom Ascheim to global kids, young adults and classics segments. Other industries are also announcing new CMOs, including Lowe’s who announced Marisa Thalberg, formerly the CMO of Taco Bell admist the pandemic.
Cross-industry pollination of knowledge may be the answer to rebalancing the media strategy of these brands.
These new appointments go to show that marketing needs to be integrated into every step of the business process, not just when the product is ready to be sold.