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Trends and Moves Marketing Moves 2017 ... Trends and Moves Marketing Moves 2017 2 KEY FINDINGS ɳ CMO succession crisis intensifies. In 2017, 74 percent of publicly reported chief

Sep 07, 2020

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  • Trends and Moves

    Marketing Moves 2017

  • 2

    KEY FINDINGS

    ɳ CMO succession crisis intensifies. In 2017, 74 percent of publicly reported chief marketing officer appointments were external hires. This compares to 69 percent in 2016 and 68 percent in 2015. Since companies rarely select new chief marketing officers from existing ranks, aspiring CMOs will likely need to switch employers to attain the top marketing job. A notable exception is Fortune 100 companies, where 84 percent of 2017 CMO appointments were promoted internally, up from 82 percent in 2016 and 77 percent in 2015. This suggests large companies have deeper benches of talent and development opportunities that foster internal promotions.

    ɳ Record turnover continues. There were 376 publicly reported CMO appointments in 2017 in the US, up from 350 in 2016 and 281 in 2015. This is the highest number we have observed since we began tracking all marketing appointments in 2014.

    ɳ Approaching gender parity. 43 percent of newly-appointed CMOs in 2017 were female. This is identical to 2016 and up from 37 percent in 2015.

    ɳ Reduced mobility across industries. Despite the increase in external appointments, the proportion of companies recruiting CMOs from different industries declined. Only 27 percent of marketing appointments came from outside the industry, a decrease from 33 percent in 2016 and 35 percent in 2015. The consumer and technology sectors overwhelmingly appointed from within their own industry – each greater than 80 percent. On the other hand, the healthcare and industrial sectors demonstrate a sustained pattern of recruiting CMOs from outside their respective industries. Almost three-quarters of healthcare CMO appointments came from outside the sector in 2017, similar to 2016.

    ɳ Brighter futures. More exiting CMOs are moving into P&L leadership roles than ever before, suggesting the CMO is viewed as having greater commercial and strategic impact. Of CMOs who exited their roles between July 2016 and June 2017 and have taken on a new role, 28 percent are now in a P&L role, an increase from 22 percent in the previous 12 months.

    The Best of Times and the Worst of Times: Record Turnover and CMO Succession Crisis Continues To better understand current trends in the appointment and turnover of marketing officers, Russell Reynolds Associates tracked and analyzed 376 notable, publicly disclosed marketing-leadership moves in 2017.

    2017

    43%

    2016

    % Female

    43%

    2015

    37%

    2017

    74%

    2016

    % External

    69%

    2015

    68%

  • 3

    2017

    14%

    9%

    15%

    13%

    14%

    5%

    7%

    17%

    4% 3%

    Consumer Digital and Media

    Financial Services

    Healthcare

    Industrial and Natural Resources

    Professional Services

    Technology

    Education/Nonprofit

    Consumer Products and Services

    Leisure and Hospitality

    Apparel/Retail

    INDUSTRY BREAKDOWN OF MARKETING MOVES

    2015

    19%

    12%

    16%

    9%

    11%

    3%

    2%

    3%

    6%

    16%

    11%

    11%

    13%

    11%

    5%

    20%

    5% 4% 4%

    2016

    Consumer 52%

    GENERAL TRENDS

    Industry Breakdown of Marketing Moves

    The consumer industry accounted for 52 percent of all marketing-leadership turnover in 2017, on par with the 51 percent seen in the prior year, but down from 56 percent in 2015. Within consumer, the retail sector has shown increased volatility, with 14 percent of all marketing moves in 2017, 13 percent in 2016, and 9 percent in 2015. Moreover, there has been over a 120 percent increase of annual retail marketing moves from 2015 to 2017.

    For the remainder of the sectors within the consumer industry, consumer digital and media and consumer products and services have seen steadily less turnover in each of the last two years. They accounted for 14 and 9 percent of all marketing moves in 2017, respectively. Leisure and hospitality had 15 percent of all marketing moves last year, which was an increase from 11 percent the prior year but a slight drop off from 16 percent in 2015.

    Internal vs. External Hires

    The trend of externally hiring top marketers continued strongly last year as external appointments accounted for 74 percent of all marketing moves. The proportion was 69 percent in 2016 and 68 percent in 2015. Given that just one out of every five CMO appointments came from within the organization in 2017, it’s clear that many companies struggle with CMO succession planning.

    An analysis of Fortune 100 companies gives a different perspective, however. Seventy-two percent of current F100 CMOs and 84 percent of those appointed in 2017 were internal promotions. Given the size of these businesses and the amount of resources they have, it is likely they place a bigger focus on CMO development and succession than others. Conversely, these statistics may also suggest that F100 businesses are more apprehensive about hiring disruptive marketing talent than smaller companies.

  • 4

    74%

    20%

    6%

    2017

    Companies in the industrial and natural resources and healthcare industries, as well as the consumer products and services sector have seen steady increases in external CMO hires. In 2015, just 35 percent of marketing appointments were external. That proportion jumped 46 percentage points over the last two years – 81 percent in 2017. Additionally, Seventy-nine percent of healthcare marketing appointments in 2017 were external, up from 76 percent in 2016 and 71 percent the previous year. Even the consumer products and services sector – known for homegrown marketing talent – saw a 7 percentage point increase over the last two years, despite having the lowest proportion of external appointments among all sectors. By contrast, the financial services industry is trending toward promoting more internal talent to the top marketing post. In 2017, 68 percent of marketing appointments were made externally, down from 82 percent in 2016 and 86 percent in 2015.

    EXTERNAL APPOINTMENTS BY SECTOR

    20162015 2017

    53%

    Consumer Digital and

    Media

    Financial Services

    Healthcare Industrial and Natural Resources

    Professional Services

    TechnologyEducation/ Nonprofit

    Consumer Products and

    Services

    Leisure and

    Hospitality

    Apparel/ Retail

    76% 76% 79%

    73%

    60%

    70%

    82%

    60%

    74%

    57%

    71%

    100%

    87% 86%

    73%

    35%

    86% 81%81%

    64% 68%

    81%

    91%

    77% 82%

    79%

    85% 88%88%

    TYPES OF MARKETING-LEADERSHIP CHANGES

    Internal

    Open/Eliminated

    External

    69%

    24%

    7%

    68%

    22%

    9%

    2015 2016

  • 5

    INTRA-INDUSTRY MARKETING APPOINTMENTS (% refers to share of hires that came from within the same industry)

    84%

    53%

    68%

    Consumer Financial Services

    Healthcare Industrial and Natural Resources

    Professional Services

    Technology

    27% 33%

    60%60%

    83%

    27%

    81%

    47%

    55%

    23%

    46%

    79%

    17%

    0%

    36%

    50%

    40%

    69%

    Education/ Nonprofit

    Inside of Industry vs. Outside of Industry

    When they turn to external CMO hires, consumer and technology businesses have a strong tendency to appoint CMOs from companies within their respective industries. About 80 percent of appointments in each industry fit this profile in 2017.

    Financial services and industrial and natural resources companies are also trending toward appointing marketing leadership from within their respective industries. Three of every five external CMO appointments within financial services came from the same industry in 2017, which was up from 53 percent the prior year and 36 percent in 2015. The proportion for industrial companies was 47 percent in 2017, an increase from 33 percent and 17 percent, in 2016 and 2015, respectively.

    Overall, 73 percent of all external marketing appointments were inter-industry last year. This was an increase from 67 percent the previous year and 65 percent in 2015. One potential downside of this trend is that it may suggest a prevalence of less-disruptive hires within the marketing function at a time when many companies need a fresh perspective.

    Looking deeper at internal appointments, the average tenure within an organization prior to promotion to the CMO role has seen a significant decrease. Across all industries, that number has dropped to 7.4 years, down from 8.2 years in 2016 and 10.7 in 2015.

    2016

    Average Years to CMO Promotion

    8.2

    10.7

    2015 2017

    7.4

    20162015 2017

  • 6

    Consumer Digital and

    Media

    Consumer Products and

    Services

    Leisure and Hospitality

    Consumer (Total)

    Apparel/ Retail

    INTRA-SECTOR APPOINTMENTS: CONSUMER (% refers to share of hires that came from within the same sector)

    71%

    61%61%

    47%

    59%

    73%

    50%

    Both apparel/retail and consumer products and services companies hired the majority of marketing leaders from within their respective sectors in 2017. The consumer digi

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