Fortune 500 companies are eliminating chief marketing officer roles as the position loses C-suite clout
Chief marketing officer exits came fast and furious last month. First, there was United Parcel Service, which said in early December that it was eliminating the CMO role. One week later, arts and crafts marketplaceEtsy said it would do the same by merging CMO responsibilities under its operations chief. Directly before the new year, it was Walgreens' turn to bid adieu to its CMO, distributing the job's functions to other senior leaders.
One commonality between the three companies is that they have each hit a bumpy financial patch and are under pressure to cut costs. UPS's revenue fell 13% last quarter, while Etsy's once robust growth engine has sputtered. Meanwhile, Walgreens is in the midst of enormous C-suite turnover. But these companies' elimination of a standalone CMO role makes them just the latest in a long line of big corporations to make the same cut in the last few years. Among them are Lowe's, Hyatt Hotels, McDonald's, Johnson & Johnson, Uber, and Lyft.
It's not that CMOs are going the way of the dodo, but rather that their total share is shrinking. In fact, CMOs are still very present in many companies. According to executive search firm Spencer Stuart, 71% of the Fortune 500 has a marketing chief, though it's down from 74% in 2009.
The data gleaned from modern marketing and all its many touch points with customers, fueled by the rise of marketing technology or "martech," is far richer than anything companies have seen before. Historically, CMOs dealt with marketing and advertising like those in print and on TV. But tech has digitized the role, transforming it into one that is more algorithmically driven, full of customer insights, and so mission critical that it also falls under other C-suite executives' remit.
"Today, an executive has to be much more of a generalist," says Stephan Meier, a professor of management at Columbia Business School.
Take UPS as an example; Matt Guffey was head of its global strategy and transformation. With the departure of CMO Kevin Warren last month, Guffey became chief commercial and strategy officer, inheriting marketing functions while overseeing global revenue, product management, and overall growth strategy. At Etsy, COO Raina Moskowitz is now in charge of marketing after the exit of former CMO Ryan Scott.
The fading of marketing's prominence as an autonomous C-suite discipline is likely partly a result of how few of today's CEOs have marketing backgrounds themselves. Only about 10% of Fortune 250 CEOs have marketing experience, and just 4% have previously held a CMO-like role. In contrast, over 70% of Fortune 100 CEOs have operations or finance backgrounds, the surer pathways to the corner office. What's more, only 41 of Fortune 1000 companies have a marketer on their board. Naturally, those that do are primarily consumer-focused brands like Best Buy, Mattel, Nike, Estée Lauder and Crocs.
Still, Richard Sanderson, who leads Spencer Stuart's North America marketing, sales and communications officer practice stresses that marketing is as necessary as ever, arguably more so, as evidenced by the absorption of the job's tasks into operational and growth-focused roles. "When people say, 'Oh, the CMO role is being eliminated,' that doesn't mean marketing isn't important. It simply means a company has chosen to structure around the role in a different way," he says.
Plus, the role can still be a viable pathway to the corner office, particularly at consumer-facing companies: Ulta Beauty's David Kimbell and Vail Resorts' Kirsten Lynch were their respective company's marketing chiefs before ascending to the top job.
Some companies that previously eliminated the CMO title have also had a change of heart. After McDonald's did away with its global CMO role in 2019, the burger company reinstated it less than a year later. Not only that, but in early January, McDonald's added new business ventures to the portfolio of its now-CMO, Morgan Flatley. It turns out marketing chiefs might be essential after all.
This story was originally featured on Fortune.com
