Viewed in Fortune
Fortune 500 corporations are currently navigating a significant paradigm shift as the traditional prominence of Chief Marketing Officers (CMOs) in the C-suite undergoes a reevaluation.
Cost-cutting
Recent developments underscore a growing trend among companies, driven by financial challenges and cost-cutting imperatives, to eliminate standalone CMO positions.
Pioneers in this approach include United Parcel Service (UPS), Etsy, and Walgreens, who have opted to merge or redistribute CMO responsibilities among other senior leaders.
A common thread links these decisions—financial turbulence impacting companies such as a 13% decline in revenue at UPS, a growth slowdown at Etsy, and significant C-suite turnover at Walgreens.
This strategic shift is not unique to these firms; major corporations like Lowe’s, Hyatt Hotels, McDonald’s, Johnson & Johnson, Uber, and Lyft have similarly embraced similar measures in recent years.
Despite the reduction in standalone CMO roles, these leaders are not becoming obsolete; rather, their overall share in the C-suite is diminishing.
Still dominant
According to executive search firm Spencer Stuart, while 71% of the Fortune 500 still retain a marketing chief, this figure has slightly decreased from 74% in 2009.
The evolution of marketing, propelled by advancements in marketing technology or “martech,” has transformed the role into one that is algorithmically driven, enriched with customer insights, and integrated into the responsibilities of other C-suite executives.
The diminishing prominence of marketing as a standalone discipline may be influenced by the limited number of CEOs with marketing backgrounds today.
Approximately 10% of Fortune 250 CEOs have marketing experience, while over 70% of Fortune 100 CEOs come from operations or finance backgrounds.
Growth and success
Despite the restructuring around CMO roles, industry experts emphasize that marketing remains crucial, with its functions absorbed into operational and growth-focused roles.
Significantly, some companies that initially eliminated the CMO title have reversed their decisions, recognizing the essential nature of marketing.
McDonald’s, for instance, reinstated its global CMO role after a brief hiatus in 2019 and expanded the responsibilities of its CMO in early January 2024.
Take-away
The evolving landscape suggests that while the traditional CMO role is undergoing transformation, marketing continues to play a vital role in shaping a company’s strategy and success.
