Do CMOs Really Add Value?
Published: September 23, 2015 / Author: Harvard Business Review
It’s been a long-running debate in academic research and the business press: Do companies benefit financially from having a marketing executive in the C-suite? A widely cited 2008 study, for example, found that the presence of a chief marketing officer has no effect on firm performance—contradicting a 2003 paper showing that these leaders boost sales growth. Then came a 2012 Forbes article proclaiming, “The CMO is dead.” The uncertainty plays out inside organizations themselves: According to a recent survey, two-thirds of CMOs feel pressured by the board or the CEO to demonstrate the value of marketing.
Seeking a once-and-for-all answer, a team led by Frank Germann, of Notre Dame, examined the question through a wider lens than those of previous studies. The researchers looked at 155 publicly traded U.S. firms across a broad range of industries, applying a variety of econometric models to analyze performance from 2000 to 2011. Their conclusion: Companies with a CMO perform 15% better, on average, than companies without one.
Germann’s study was published in the May 2015 Journal of Marketing.