Chief marketing officers may have forgotten the power of telling a good story.
A string of recent high-profile CMO departures has renewed the debate over the value of the position in the banking industry and has led to questions about the importance of the role in the C-suite. Global companies — like UPS, Walmart and Etsy — have not only parted ways with their chief marketers but terminated the positions altogether. Prominent financial services firms including Bank of America and Wells Fargo were some of the first movers, making similar announcements to retire the positions in recent years.
A central problem is demonstrating the value CMOs are bringing to their organizations. While the impact of a chief revenue officer or chief financial officer can be easily demonstrated in data points, the value of the marketing position — and the benefits of building a strong brand — are much harder to quantify. Marketers need to illustrate the importance of the top marketing role to other executives and board members. That often means crafting a detailed story about the value they’re bringing to the table.
“Marketing has a marketing problem,” says James Robert Lay, founder and CEO of the banking consulting group the Digital Growth Institute. “If you are a CEO or CFO, you think: ‘I’m spending millions of dollars on marketing, but what am I getting for that?’”
“Marketing has a marketing problem. If you are a CEO or CFO, you think: ‘I’m spending millions of dollars on marketing, but what am I getting for that?’”
— James Robert Lay
Just three in 10 chief executives (31%) gave their marketing teams a rating of ‘above expectations,’ according to a 2024 survey by the executive research firm Boathouse. Only about half of the CEOs surveyed rated their marketing capability as ‘best in class,’ demonstrating a real lack of trust in the marketing department’s ability to drive revenue.
When Wells Fargo announced its CMO departure in 2021, the bank had no intention of replacing the role. Instead, the global bank opted to spread out its marketing needs to internal divisions. That same year, Bank of America said its marketing division of roughly 1,400 employees would merge with its digital team.
“Unless marketing addresses the perception problem, and shows the value they’re creating, we’re going to continue to see struggles on this front,” Lay says.
Build Trust with Top Execs
While executives are having trouble understanding marketing’s value proposition, they’re also not overly trusting of CMOs. According to the survey — which was conducted in September and October of last year — CEOs listed chief financial officers as the most trusted on the C-suite, followed by chief operating officers and then chief strategy officers. Just 20% of CEOs said the CMO is “on my side, I trust them” and just 10% said marketing “puts my needs before their own.”
“Of all the good news in 2023, the most surprising new trend is the decay of the personal relationship between the CEO and the CMO,” according to the survey.
For Lay, some of the issues boil down to a simple matter of metrics. “Who gets all the glory?” Lay says. “Sales. They’re the ones going out and closing the accounts — bringing the new business in.”
The buying process — which is now completely digital — is happening almost entirely behind the scenes and out of the scope of the traditional tools used to measure marketing campaigns. Companies need to solicit more information from consumers to find out what drove those purchasing decisions, he says. For example, when a potential customer completes a loan application on a website, firms can ask follow up questions and learn about the customer’s journey.
“The old world view of marketing and sales is gone,” Lay says.
Read more about the role of the CMO:
- 4 Banking CMOs to Watch in 2024
- First Horizon’s CMO Powers Through Merger Misfire
- How CMOs Can Maximize Their Marketing Budgets
CMOs Must Rely On Metrics
Marketers have always used metrics to measure the success of media campaigns, and are historically comfortable with relying on data to demonstrate results. While they relied on analog ratings systems before the arrival of the Internet, today there are almost too many data points to monitor, says Allison Cerra, CMO of the digital banking software provider Alkami.
“Measuring results has historically been one of the biggest challenges for the CMO role,” Cerra says. “It’s not that CMOs are incapable of understanding the business metrics that hold sway (such as market share and profit growth), it’s that they have historically lacked the technology infrastructure to connect the leading indicators to business results.”
Because of this, CMOs can report on leading indicators, like impressions, that don’t hold much value in the boardroom, she says. Choosing the right metrics for the right audience becomes paramount.
“Measuring results has historically been one of the biggest challenges for the CMO role.”
— Allison Cerra, Alkami
“CMOs must get even more comfortable with data — and not just reporting data, but understanding how to build the right data architecture to accurately measure results that directly connect to their company’s financial statements,” Cerra says.
To that end, technology must become a much larger part of the CMO role of the future. Top marketers can communicate their results into the “language of the business,” which means they need the right tech stack to track the most important indicators.
Mastering reporting technology and creating data architecture is just the latest challenge in a long list for CMOs, she says.
Focus On Tech To Foster Change
According to the Boathouse survey, most CEOs want their marketing departments to solve five core problems focused on growth. Most importantly is to drive revenue, sales and market share, differentiate from competitors, improve brand reputation, and transform the company narrative.
“What we are seeing is the evolution of the traditional CMO’s responsibilities as part of other C-Suite functions,” says Leslie Gillin, Chief Growth Officer at banking fintech Pagaya. “Marketing has become such an important function contributing to a company’s overall growth objectives, that many marketing executives have taken on broader functions.”
Technology can become a powerful tool to help shape and redefine new roles. CEOs generally believe their marketers are leading adaptation to AI effectively and have indicated that marketing has the broadest AI adoption. Almost six in 10 CEOs said that their CMOs have made AI presentations, asked for funding or created new processes incorporating AI.
The Changing Landscape of AI:
The percentage of CEOs who say their CMOs want to, or already do, integrate AI into their processes:60%
It’s an area where the latest martech is having a real impact.
“Given digital and data are inextricably linked, we’re also seeing the emergence of the data-informed digital banker,” Cerra says. Many institutions are creating roles that increase relevance and revenue with account holders by leveraging technology, she says. These new roles have historically been associated with marketing, but are now falling under different groups or titles.
“CMOs are the reflection of the market to their companies,” Cerra says. “They can be the tip of the spear when it comes to catalyzing change.”
CMOs Must Continue to Evolve
While the debate over the future of the CMO is on, the shifting dynamics of the position is nothing new. “Through its history, the CMO has been a constantly evolving position significantly influenced by shifts in traditional media channels and technology trends,” Cerra says.
Beginning around the 1950s as televisions became readily available to most Americans, the “Mad Men” era of branding and broadcast advertising consumed much of the chief marketing role, she says. Social media made marketing pursuits more human in the early part of this century as marketers learned how to speak to millions of potential customers with a more authentic voice.
More recent martech tools that utilize new tech, like gen AI, are again providing new challenges, and opportunities.
“For all these changes, what has remained relatively constant is the CMO’s bigger purpose around making and shaping markets for their companies,” she says. “Whether this important duty remains the jurisdiction of a defined CMO role or is absorbed in another C-suite position, the need for growth remains a perennial one.”
Sean Allocca is an award-winning journalist with more than 15 years of experience. Most recently, he was Editor-in-Chief of ETF.com, overseeing the company’s content strategy and long-term editorial goals. He was also deputy managing editor at InvestmentNews, an editor for the wealth management publication Financial Planning, and editor of CFO magazine. He has a M.A. in business communication from Fordham University and a B.A. in writing from Loyola University, Md.