Fortune 500 Companies are Eliminating Chief Marketing Officer Roles
Interesting article from Fortune that’s worth a read – Fortune 500 companies are eliminating chief marketing officer roles.
This article names a few companies (UPS, Etsy, Walgreens, Lowe’s Companies, Inc., Hyatt Hotels Corporation, McDonald’s, Johnson & Johnson, Uber, Lyft) who have eliminated their CMO role and merged responsibilities onto another department.
The article cites some of the reasons such as some of these companies have “hit a bumpy patch financially”, and that “few of today’s CEOs have marketing backgrounds.”
“Only 10% of Fortune 250 CEOs have marketing experience and just 4% have held a CMO-like role. 70% of Fortune 100 CEOs have operations and finance experience.”
“71% of Fortune 500 companies still do have a CMO, down from 74% in 2009.”
“McDonald’s eliminated the role in 2019, but reinstated it less than a year later.”
My thoughts on this:
👉 Marketing is difficult (and becoming more so each day) – market saturation, ad blockers, ad fatigue, algorithm changes, new platforms, new tech, changing consumption habits, SERPs dominance by large players, economic downturn, rising ad costs, digitalization… the market moves quickly, consumers sentiment changes, and it’s often difficult to keep up. What worked last year or last quarter, may no longer work.
Companies who relied heavily on TV commercials, for instance, need to pivot as fewer people are watching cable, and commercials are often skippable.
Many CEOs don’t have the luxury or patience to wait around for your marketing team to figure it out. I get it, marketing is expensive and it takes time.
👉 Attribution is still a notoriously difficult problem to solve. So much of marketing cannot be traced back to an ROI. We experiment and do things and hope they work, without have clear data of actually knowing. What’s the ROI of a billboard? What’s the ROI of a rebrand? What’s the ROI of your podcast?
When you can’t tie every activity back to immediate revenue, you are seen by many CEOs (as my friend Jordan Scheltgen would say), “as the arts and crafts department.”
👉 Often times people who rise to the top in marketing departments are completely out of touch and actually don’t deserve their high salary. What often happens is that these people get these jobs because they have racked up a bunch of years of experience. But years of experience does not equate to skill. And, most of those years are spent managing people, not doing the actual work of a marketer and staying up-to-date with the latest marketing trends.
👉 We’re seeing a rise in Fractional CMOs (such as myself!) where companies recognize they need marketing support, but don’t need a full-time CMO. CMOs are expensive and may not be needed for 40+ hours per week. Often you can get what you need with 10-20 hours per work, provided you have competent marketing staff who can execute.
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