“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is by Tom Triscari, CEO at Labmatik.
The chief marketing officer (CMO) is thriving. Pronounced dead by Forbes back in 2012, CMO tenure has doubled over the last 10 years from a revolving door of 23 months to 48 months and rising.
Spencer Stuart, a Chicago recruiting firm, has tracked this interesting metric since 2004. The recruiting firm sees a reasonable explanation: CMOs are now firmly rooted in management teams and stand at the forefront of how their organizations interact with customers.
While the firm’s highly experienced claim is likely true, I also see other factors driving this trend, particularly the rise of marketing technology.
Over the past 10 years, we’ve seen major funding pour into digital advertising. Venture capital investment in ad tech companies has more than doubled, rising from $550 million to $1.25 billion. At the same time, digital ad spending has roughly quadrupled to nearly $140 billion.
In the midst of massive digital innovation, with infinitely more data sources and uses, CMOs have steadily become the most significant buyers of marketing technology. It’s as if their returns on tech investments have been realized in the form of longer tenure. When a job gets done in a better way, employment tends to last longer.
Another way to look at longer CMO tenure and the rise of marketing technology is to say all these tools have made marketers much smarter. Marketers have always been plenty smart, and with all the new tools, they have become wicked smart.
Smarts plus data plus tools means ideas can be proven beyond a shadow of a doubt. Over the same time period of doubling tenure, marketing shifted from anecdotal measures of success to empirical measures. The ability to prove marketing shifted from implicit justification to a vigorous demand for explicit causation.
When people have the ability to prove themselves, they tend stay employed longer.
Knowing What To Do
Ben Horowitz provides a related explanation on why technology is the main driver of CMO tenure. Let’s borrow his definition of the CEO’s job as a proxy for the CMO job by asking two questions:
- Does the CEO – or CMO – know what to do?
- Can the CEO – or CMO – get others to do what she knows?
The first question is all about setting strategy. The second question is about execution. At the intersection of marketing, data and technology, CMOs and their teams know much more today than ever before. Knowing more and doing more with that knowledge typically leads to better strategy. Better strategy leads to better outcomes. Better outcomes lead to longer employment tenures.
While it will always be important to get people to execute a smart strategy, the programmatic machinery and know-how create a set of circumstances where marketers get to program the machine to do what it knows. The human-machine pairing creates much less variation in failure rates, which creates more dependency on the CMO and his or her team.
Indispensable employees tend to stay employed longer.
The Next 10 Years Of Tenure
Just a few years ago, CMOs were responsible for just the top half of the classic marketing funnel. Companies used to lean on the sales team, which controlled the early stages of the customer development process. Today, the CMO is responsible for nearly the entire funnel, and in some cases, there is no longer a need for salespeople to do any last-mile handholding.
This shift in funnel stage ownership is completely driven by technology-empowered CMOs. Not only is this a permanent change, but it has also created a growing dependency on their skills, which drives longer tenures.
Over the next 10 years, CMOs should expect this dependency to grow even more. We will perhaps see tenures double again. All of the changes over the past 10 years have happened in an environment where marketing tech spending has been less than 1% of total ad spending, according to Ashu Garg, a general partner at Foundation Capital, which focuses on marketing tech startups.
Garg sums it up with a bold prediction:
“We expect technology spend by CMOs to increase 10 times in 10 years, from $12 billion to $120 billion, unlocking a huge opportunity for marketing technology companies and opening the door to the decade of the CMO.”
Editor’s note: This article has been modified to reflect updated CMO tenure figures from Spencer Stuart.