The pressure on chief marketing officers to demonstrate the value of marketing and help their companies improve the bottom line continued this year, and it isn't likely to let up in 2008.
The heat, which is coming from senior management as well as investors, is one of the reasons the CMO job continues to see high turnover.
According to a study released in June by executive search firm Spencer Stuart, the average tenure for CMOs this year is 26.8 months, up from 23.3 months in 2006.
However, Spencer Stuart also found that while time on the job increased by three-and-a-half months, there were twice as many vacancies for CMO positions as a year earlier.
In just the past six months, several prominent b2b CMOs retired or switched jobs, including: Susanne Lyons, former exec VP-CMO at Visa USA; Jim Murphy, former chief marketing and communications officer at Accenture; and Keith Pigues, former CMO at CEMEX.
Lyons retired from Visa and now serves on several boards of directors. Murphy retired from Accenture to become chairman of consulting firm Murphy & Co., and Pigues is now senior VP-CMO of Ply Gem Industries.
All these marketing executives agreed that CMOs face significant challenges in their jobs, which are certain to continue next year.
Harder Than B-to-C
"The core underpinning challenge is being able to demonstrate you're adding value to the bottom line," Murphy said. "In b2b, it's harder than in b-to-c because you're selling highly proprietary assets, and personal relationships are much more important in the marketing mix than in b-to-c.
"It is harder to demonstrate if your marketing initiative is the determining factor in increasing value to the bottom line, as opposed to selling consumer products."
Murphy said successful CMOs in 2008 will need to be highly skilled in analytics, use new technologies and metrics to demonstrate the full value marketing represents to the company, and be able to fully integrate with sales and other functions of the organization.
Pigues said one of the difficulties in the job is unrealistic expectations when new CMOs are hired.
"Sometimes CEOs don't know what they really want, and in some cases CMOs don't really understand what the CEOs want," he said. "As a result, it's not surprising that there is a misalignment of expectations, and that has certainly led to the short duration of CMO tenure."
Pigues, who is also chairman of the Business Marketing Association, said one of the biggest challenges facing CMOs today is balancing the long- and short-term expectations of the CEO, other senior executives and the board. "CMOs have to lead the strategic growth agenda to accelerate profitable organic growth ... while working collaboratively with business unit and sales leaders to accelerate short-term sales growth," he said.
Looking to 2008, Pigues said successful CMOs must be able to prioritize marketing strategies and investments to meet business needs in challenging market conditions, including the housing downturn and tight credit markets.
Donovan Neale-May, executive director of the CMO Council, also said that misaligned expectations contribute to the short job tenure of CMOs.
"Fundamentally, the challenge starts when you bring in the wrong person with the wrong set of expectations," he said. "If a CMO doesn't have the authority and the right sort of mandate mission, the CMO will have a short time on the job."
Neale-May said the challenge for CMOs in 2008 will be to transform their marketing organizations to be more flexible and agile, while working to align more tightly with sales. He also said CMOs will need to do a better job of developing metrics to prove marketing ROI.
Lyons agreed that ROI will be a major issue for CMOs in 2008.
"The key challenge for CMOs in 2008 is to ensure that they are attuned to the changing landscape of metrics and return on investment that must drive the marketing agenda, without losing the breakthrough ability of good strategic and creative marketing to capture attention and drive intention," she said.