While many chief marketing officers (CMOs) continue to face headwinds, there’s never been a better time to be a CMO. The marketing department’s responsibilities have expanded well beyond what we might think of as traditional marketing. CEOs and boards are giving CMOs more room than ever to step up and think boldly about how marketing can drive long-term growth. In fact, about 80 percent of CEOs believe CMOs can be a major driver of growth. Modern, highly effective CMOs take on growth aspirations, unify the C-suite, oversee personalization and building the marketing department around the customer, and transform other leaders into champions of the marketing agenda so that everyone is pulling in the same direction.
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Julien Boudet is a senior partner based in McKinsey’s Southern California office. Michael Birshan is a senior partner in the London office. Marc Brodherson, Ishaan Seth, and Jill Zucker are senior partners in the New York office. Biljana Cvetanovski is a partner in the London office. Tjark Freundt is a senior partner in the Hamburg office. Brian Gregg and Kelsey Robinson are senior partners in the Bay Area office. Eric Hazan is a senior partner in the Paris office. Greg Kelly is a senior partner in the Atlanta office. Jesko Perrey is a senior partner in the Düsseldorf office. Erik Roth is a senior partner in the Stamford office, where Ed See is a partner.
But CMOs can’t do it alone. Executives at leading organizations believe that a wide variety of business functions—from sales and product innovation to finance, technology, and HR—should participate in marketing’s success. The rest of the C-suite needs to embrace the potential of marketing as a growth driver and see a co-partnership with the CMO as an opportunity to deliver tangible value. And the CMO has the responsibility to make that potential clear to their C-suite colleagues.
To learn more about how CMOs can work with their colleagues to create value, read on.
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What are the three types of CMOs—and which type is most successful?
The CMO’s role as head of marketing is to drive an organization toward this collaborative vision. McKinsey research indicates that there are three types of CMOs but only one type holds the key to growth across an organization: the “Unifiers.” And they can make a big difference: McKinsey analysis shows that high-growth companies are seven times more likely to have a Unifier CMO: someone who fosters robust, collaborative partnerships across the C-suite.
Here’s more on the three types of CMOs:
- Unifier. These CMOs are masters at fostering cross-functional collaboration. They ensure that marketing has a clearly defined role in the eyes of their C-suite peers by articulating, in language their executive peers can understand, how marketing can meet the C-suite’s needs. As a result, their budgets are more likely to be protected during a downturn, and they enjoy a 48 percent longer tenure.
- Loner. These CMOs may be great marketers, but they don’t have the full support of—or deep relationships with—their C-suite peers. Loners tend to focus on near-term activities like ad campaigns and social media. They are seen by CEOs as marketers, not as equal partners. As such, they often report that their CEO doesn’t understand or trust marketing.
- Friend. This type of CMO is the most common, existing somewhere between the Unifier and the Loner. They may have one or two allies in the C-suite but haven’t been able to spread marketing’s agenda fully through the organization. They’re not as adept at speaking the language of the C-suite. Accordingly, chief technical officers (CTOs) tend to see them as “customers” of technology rather than partners in driving innovation.
What’s the typical relationship between CMO and CFO?
If the CEO is a CMO’s closest natural ally, the CFO is frequently their toughest critic. “Under pressure,” says one former consumer goods CFO we interviewed, “marketing gets cut first because it is the hardest to justify.” A full 45 percent of CFOs we surveyed said the reason marketing proposals have been declined or not fully funded in the past is because they didn’t demonstrate a clear line to value.
To overcome this challenge, the most efficient CMOs use advanced analytics to demonstrate that marketing drives clear, predictable, and significant value. They build business cases with metrics that reflect meaningful financial value tied to performance marketing rather than indicators that matter less to CFOs (things like brand equity, engagement, or gross rating points).
Learn more about McKinsey’s Growth, Marketing & Sales Practice.
How can CMOs best collaborate with CTOs?
The most successful CMOs understand that marketing and technology are inextricable partners in creating new value. Marketing can’t take advantage of the data companies possess without close collaboration with the CTO.
Pernod Ricard North America CEO Ann Mukherjee sees the CMO as the Rosetta stone for the organization, linking the finance department to the CTO and beyond. “The CMO has to be the jack-of-all-trades,” she says. “They don’t have to be a perfect expert but must understand technology to stand side by side with the CTO…. In today’s world of analytics, the delivery of mass-personalized content requires the CMO to understand martech [the technology that undergirds these kinds of mass-personalization campaigns], as well as how data flows in the company.”
As partners, CMOs and CTOs develop a shared vision of how data from separate, disconnected systems can be integrated and then used to understand customers at granular levels, personalize interaction, and predict customer behavior. CTOs who feel responsible for the outcomes of marketing initiatives are more likely to devote dedicated resources to them.
What is spend efficiency and how can it drive growth?
To boost the impact of every dollar spent, organizations must create more personalized and meaningful connections with customers across every interaction. Leaders who successfully do so can drive up to a 30 percent increase in marketing spend efficiency. Here are three examples of companies using spend efficiency to drive growth:
- During the early part of the COVID-19 pandemic, United Airlines doubled down on branding. Instead of playing it safe as lockdowns slowed air travel, United launched its biggest ad campaign in a decade. According to Maggie Schmerin, United’s head of global advertising, this helped the company forge ahead.
- A global telecom company reallocated its spending to great effect. It had previously spent billions of dollars on advertising each year, keeping a roster of expensive agencies on retainer. The telco took a hard look at how this work got done and revamped the process. It retained the larger agencies for inspiration and ideas, saved budget by developing an in-house agency to craft campaigns, and established new partnerships with agencies that could execute low-cost advertising production tasks. The revamping of the agency model ultimately led to $65 million in annual savings.
- A luxury department store successfully measured the impact of its marketing more consistently across its marketing funnel. Marketing executives knew that banner ads led to purchases, but the margins were not ideal. They used sophisticated incrementality testing that would help them understand what might erode margins after sales and learned that a good number of people were returning their purchases. They identified $50 million of potential incremental margin improvement by amplifying “midfunnel” banner ads that drove both consideration and conversion and by removing banner ads that drove excess returns.
How can CMOs help their teams become more collaborative?
Marketing that creates deeper customer connections, via personalization and otherwise, doesn’t happen without new levels of collaboration and coordination between the marketing team and its wide range of functional partners. The new marketing superpower is multidisciplinary competency. In our experience, success follows several key principles:
- Making marketing capabilities a first-rate strategic priority. Strengthening marketing capabilities can’t be an outsourced afterthought. Company executives and marketing leadership should quantify the value at stake and declare it a revenue imperative, not a cost.
- Connecting the dots across teams. It’s not just digital team members and traditional brand marketers who need to be upskilled. Leading companies extend their learning programs to include other key stakeholders and cross-functional partners, both internally and externally.
- Curating a program that leverages best practices for adult learning. Learning programs should support the acquisition of new skills, as well as help marketers apply these skills and knowledge in their jobs. Hybrid models often work best, with learning journeys that combine self-paced digital learning, live workshops, fieldwork, and on-the-job training and coaching.
- Taking a test-and-learn approach and adapting the program as you go. While some demands modern marketers face are universal, there are variations by region, industry, and organization. Learning programs should be piloted with an initial audience to be able to refine the program before scaling broadly.
- Viewing capability building as an ongoing journey, not an event. Learning new marketing skills is an ongoing process, evolving at pace with customer expectations. Organizations should prioritize building on existing knowledge, as well as evolving and developing new resources.
- Celebrating wins to drive cultural change. Collaboration and the use of new tools and processes don’t necessarily happen on their own. When marketers understand the value of doing something differently, they are more likely to want to change how they work.
While there’s no universal solution to marketing capability building, it pays to experiment. Finding the right approach can boost marketing performance through improved campaign execution time, customer engagement, and cost savings.
- “Beyond belt tightening: How marketing can drive resiliency during uncertain times,” McKinsey Quarterly, June 26, 2023, Julien Boudet, Marc Brodherson, Kelsey Robinson, and Eli Stein
- “Modern marketing: Six capabilities for multidisciplinary teams,” April 5, 2023, Anna Checa, Cayley Heller, Eli Stein, and Jamie Wilkie
- “Choosing to grow: The leader’s blueprint,” July 7, 2022, Michael Birshan, Biljana Cvetanovski, Rebecca Doherty, Tjark Freundt, Andre Gaeta, Greg Kelly, Erik Roth, Ishaan Seth, and Jill Zucker
- “The growth triple play: Creativity, analytics, and purpose,” June 21, 2021, Biljana Cvetanovski, Orsi Jojart, Brian Gregg, Eric Hazan, and Jesko Perrey
- “Marketing’s moment is now: The C-suite partnership to deliver on growth,” June 20, 2019, Julien Boudet, Biljana Cvetanovski, Brian Gregg, Jason Heller, and Jesko Perrey