Study: CMO Leadership Trends Show Stability with Ongoing Volatility in Top Brands

Latest Trends in CMO Tenure

The latest report from Spencer Stuart indicates that the average tenure of Fortune 500 CMOs is starting to stabilize. However, there is still a high level of volatility seen among top consumer brands. This report tracks trends in C-suite appointments.

Among the top 100 advertisers who focus on consumers, the average CMO tenure in 2023 was 3.1 years, which is lower than the overall average of 4.2 years. This 4.2-year average remained consistent with the figures from 2022, and it is slightly below the 4.6-year average for all C-suite leadership positions.

In 2023, 22% of business-to-consumer (B2C) marketing chiefs had been in their role for one year or less. Additionally, 71% of all Fortune 500 CMOs were new to their position, with this number increasing to 74% among the top 100 advertisers. This 74% figure is the highest percentage recorded since Spencer Stuart started tracking this data in 2016.

CMO Churn Rate

Many believe that Chief Marketing Officers (CMOs) have a high turnover rate, a belief supported by research such as Spencer Stuart's 20th-year assessment of the position. According to the latest annual report from the executive search firm, Fortune 500 CMOs do not have significantly shorter tenures compared to other C-suite executives. However, it is the marketing chiefs at major consumer advertisers who experience the most instability in their roles.

Marketing chiefs in a broader sense are wearing more hats, though that isn’t always a negative. Among Fortune 500 CMOs, 34% were in charge of functions in addition to marketing last year, such as communications, per Spencer Stuart. Taking on extra duties can be a stepping stone to bigger gigs, with 68% of exiting Fortune 500 CMOs either being promoted internally or taking a lateral or larger role elsewhere, the report said.

This insight could be attributed to a few factors. CMOs at top-100 advertisers have to manage massive media budgets, performance that is often subject to the pressures of the public markets and brands that are promoted to a mass audience, making them potentially riper targets for scrutiny as culture wars increasingly affect consumer perceptions. In some cases, juggling new technology, such as artificial intelligence, and growth mandates have fallen under the CMO.

Several well-known brands have recently chosen marketers to lead their companies. Taco Bell promoted brand chief Sean Tresvant to CEO last year, while Starbucks appointed global marketing chief Brady Brewer as the head of international operations in March as part of a reorganization. With this change, Starbucks eliminated the global CMO position.

In a related trend, 58% of Fortune 500 CMOs were promoted internally last year, compared to 54% in 2022, according to Spencer Stuart. This shift was more noticeable among business-to-business (B2B) companies, with 63% opting for internal promotions, compared to 53% of business-to-consumer (B2C) brands.

Spencer Stuart's report noted that more internal promotions and first-time CMOs are on the rise, indicating that CEOs are increasingly willing to take chances on familiar faces. This also suggests that organizations are smartly investing in developing leaders and planning for the future of the CMO role.

On the other hand, companies are becoming more open to hiring marketing leaders from outside their own industries. In the previous year, 43% of externally recruited CMOs came from a different industry, a notable increase from the 37% in 2022.

From a diversity perspective, women have made significant strides in achieving parity with men, now representing half of Fortune 500 CMOs in 2023. In the top-100 advertisers, women hold 52% of marketing leadership positions, a slight decrease from the previous year.

However, a study by Spencer Stuart revealed a concerning drop in racial and ethnic representation, with underrepresented groups accounting for only 12% of CMO roles in 2023, down from 14% in 2022. This trend is consistent with other research showing a decline in marketing workforce diversity despite improvements in gender equality.

Spencer Stuart has been including more data sets in its CMO study to find out more details about the role. The study looks at CMOs from companies listed in Ad Age's Leading National Advertisers and CMOs from the Fortune 500.

Editor's P/S:

The article highlights the complex dynamics of CMO tenure and turnover. While the overall CMO tenure has stabilized to an average of 4.2 years, there remains a marked disparity between the tenure of CMOs at consumer brands (3.1 years) and other industries. The high churn rate among CMOs at top-100 advertisers is attributed to factors such as intense scrutiny, large media budgets, and the impact of culture wars on brand perceptions.

Moreover, the article emphasizes the growing trend of internal promotions and the influx of CMOs from outside industries. Companies are increasingly recognizing the value of developing and promoting internal leaders, while also seeking diverse perspectives by hiring from different sectors. The rise of women in CMO roles is encouraging, but concerns remain regarding the decline in racial and ethnic representation. Spencer Stuart's ongoing research provides valuable insights into the evolving CMO role and the challenges and opportunities faced by marketing leaders in today's dynamic business landscape.