Chief Marketing Officer Research Articles

Influential Chief Marketing Officers and Management Revenue Forecasts

ABSTRACT We examine the role of the chief marketing officer (CMO) in corporate voluntary disclosure of future revenues. Using a sample of S&P 1500 firms for the period from 2003 to 2011, we find that the presence of an influential CMO in top management is positively associated with the likelihood of a firm issuing a management revenue forecast. We also find that firms with an influential CMO provide more accurate revenue forecasts than other firms. These findings extend to long-window change analyses and are robust to the use of a propensity score matched-pair approach. Overall, the results are consistent with the notion that CMO influence in top management appears to play an important role in voluntary revenue disclosures. JEL Classifications: M12; M31; M41. Data Availability: All data are publicly available from sources identified in the paper.

B2B digital marketing strategy: a framework for assessing digital touchpoints and increasing customer loyalty based on Austrian companies from heating, ventilation and air conditioning industry

Research background: Digital marketing has changed the nature of company-to-customer communication. With rising information overload and reduced decision-making time, touchpoints have gained additional importance by yielding customer loyalty. Yet, the existing digital marketing tools have failed to keep pace with these trends. Companies are lacking a simple framework that focuses on a digital marketing strategy built around touchpoints and customer loyalty. This is especially relevant for B2B companies, which due to their specifics are more dependent on customers and less flexible in adapting of new digital trends.
 Purpose of the article: A B2B business strategy tailored to digital trends demands a re-evaluation of prior understanding of a product portfolio, a company?s internal and external environment. The purpose of the article is to present a framework that helps to undertake the necessary changes and enables the connections with industry.
 Methods: The suggested model has been drawn from the literature review and extended based on the findings of a multiple case study of Austrian Heating, Ventilation and Air Conditioning (HVAC) industry companies. The fieldwork was conducted in early 2017. Findings & Value added: Aspiring to follow trends in digital marketing and to help B2B companies to adapt their strategy to ongoing changes in company-to-customer communication, a new framework has been developed. The framework aims to increase customer loyalty and focuses on channels/touchpoints, assets, skills, audience and customer journey. The model could be beneficial for Chief Marketing Officers (CMO) and other C-levels by offering a simple and reliable tool for improving a company's position in the digital marketplace. Moreover, it enables continuous adjustment of an already existing business strategy.

The marketing performance credibility gap: The growing importance of developing financially credible measures of the contribution of marketing to enterprise value, profits and growth

This paper outlines the steps marketing leaders must take to increase their credibility with their chief executives and boards by better connecting marketing investments to enterprise value. Based on Forbes’ extensive quantitative and qualitative research among world-leading chief marketing officers, the paper presents a perspective on the steps taken by best-in-class marketers to better align their marketing investments to achieve both short and long-term business growth, while building brand value.

Do CMO Incentives Matter? An Empirical Investigation of CMO Compensation and Its Impact on Firm Performance

Despite growing interest in various facets of the position of chief marketing officer (CMO), there is very little research on CMO compensation. Accordingly, we set out to investigate the determinants of CMO compensation and its effect on firm performance. Employing the lens of agency theory, we hypothesize that the CMO’s marginal productivity will positively impact the amount of total compensation as well as the extent of performance-based compensation in the CMO’s compensation contract. Moreover, we hypothesize that deviations in contracting elements from predicted levels will adversely impact firm performance. Analyzing a sample of 9,230 firm-year observations over the period 1992–2013, we find that CMOs employed at firms with high advertising and R&D intensity, and operating in competitive product markets, command larger amounts of total compensation. Moreover, a greater proportion of their compensation is market based, with heightened sensitivity to movements in the firm’s stock price. We also find that deviations in CMO compensation elements have an adverse impact on operating performance (return on assets (ROA)), earnings surprises, and stock returns. Specifically, a 10% deviation in market-based compensation from predicted levels reduces ROA by 0.28%, dampens earnings surprises by 0.19%, and degrades annualized stock returns by 2.4%. This paper was accepted by Eric Anderson, marketing.

The criticality of CMO-CIO alignment

This year, chief marketing officers (CMOs) will spend more money on IT than chief information officers (CIOs). This rapid shift in responsibility is creating a growing divide between CIOs and CMOs over firms’ IT investment decisions and actions, which is of increasing significance to firm performance. Understanding and managing this CIO-CMO divide is important in light of the magnitude of investment involved—global IT spending is estimated to exceed $4.1 trillion by 2018—and CEOs’ belief that technology is a critical success factor for future firm performance. Heretofore, there has been little investigation regarding the unique relationship between the CMO and CIO. The research reported herein addresses this shortcoming by revealing the results of in-depth interviews with CMOs and CIOs across multiple industries. The results identify the nature and sources of conflict between the two roles as well as the management-related mechanisms to overcome them, revealing the need for CEOs to focus on managing four specific sources of CMO-CIO conflict: perspective, goals, accountability, and structural conflict. While the CEO has the power to create the management-related mechanisms that promote greater CMO-CIO alignment, we also detail steps that the functional leaders can take to put the mechanisms in place should the CEO fail to do so.

Blockbuster Entertainment Corp.: Growth Strategies for 1995

Despite its clear leadership position, Blockbuster was running out of places in which to open new stores. As the growth and profitability of its traditional video rental business slowed, James Hilmer, chief marketing officer, evaluated two growth opportunities: set up virtual reality parlors within existing video stores, the test marketing of which had shown positive results; or leverage its retailing skills by diversifying into specialty retailing of merchandise from entertainment properties of its partners Viacom and Paramount. In this effort to grow by brand extension, Hilmer analyzes which option lets Blockbuster leverage its existing brand the most. How do the two market segments compare in terms of size, existing and future competition, investment requirements and returns, and Blockbuster's ability to grow and defend itself in the segment?

Trilogy Corporation: Customer Value-Based Pricing

Steve Meyer, the chief marketing officer at Trilogy, was evaluating the best way to move forward with an innovative, customer value-based pricing approach for its enterprise software solutions. Trilogy had radically transformed its business from a product-centric organization to a customer-centric one, and value-based pricing was a pillar of this transformation. Meyer had to evaluate three pricing approaches: traditional license based, subscription based, and gain sharing. He had to assess which pricing approach Trilogy and Trilogy's clients would prefer and the conditions under which gain-sharing pricing would work. Meyer also had to address several adoption barriers that prevented customers from embracing the gain-sharing pricing approach.

ID Interviews Andreas Haldi, CMO of CYNORA GmbH

ID magazine recently had the opportunity to talk with Andreas Haldi, the newly appointed Chief Marketing Officer for CYNORA GmbH which develops blue OLED emitters based on thermally activated delayed fluorescent (TADF) technology. Haldi has worked with OLED on three continents. A native of Switzerland, he earned his M.S. degree from the Swiss Federal Institute of Technology in Zürich, then wrote his Master's thesis at the Optical Sciences Center at the University of Arizona before going on to earn his Ph.D. in electrical engineering from the Georgia Institute of Technology. Haldi began his professional life with OLED developer Novaled in Dresden, Germany, eventually moving to Seoul to open a Korea‐based office for Novaled. Last August, he joined CYNORA to lead promotion and sales activities. CYNORA was founded in 2008 and is based in Bruchsal, Germany.

The impact of social media on the B2B CMO

Purpose The commentary paper aims to delve into how social media are being used by chief marketing officers (CMOs) and shows that while many in business-to-customer have understood how to use social media already, their CMO counterparts in business-to-business (B2B) have not made up their minds. So some key questions are raised about B2B CMOs’ readiness to use social media, what this accomplishes and resulting effects upon the role of the CMO within an organisation. Design/methodology/approach The research paper involves use of case studies drawn from IBM experience with social media. Findings B2B CMOs are not ready to make use of social media. Even those who are actively engaging are expressing concern that they are pioneering and have not yet put in place a strategy that they are satisfied with. In addition, social media can be used for after-sales service, getting sales leads, engaging with key influencers, building the company’s reputation and enhancing the industry status of key individuals. B2B firms need to exploit the capabilities of processing massive amounts of data to get the most from social media. Originality/value The paper brings insights to the challenges facing CMOs of B2B firms when using social media. It provides a better understanding of what should be the role of CMOs in the use of social media. The CMO must be the voice of the customer as well as the custodian of the values that enable effective use of social media. Effective collaboration within the boardroom is essential and if the CMO is not a board member, then the company should consider making that change.

Why buy when you can rent?

Companies that need scientific instruments, especially on a temporary basis, but can’t afford pricey new equipment often end up buying used. Little do most of them know that another option is renting. Kwipped, a new online rental market, hopes to change that with its aggressive search engine advertising, e-mail outreach to scientific instrument users, and what it hopes will be a sort of centralized rental mall. Kwipped is going up against other, more experienced, competitors, but it is also counting on reaching new customers intimidated by or unfamiliar with the fragmented rental market. Up and running for a year and a half, the firm acts as an intermediary between potential renters and instrument suppliers. Robin Salter, Kwipped’s chief marketing officer, calls his firm an “Uber for the equipment space,” referring to the phone app that hooks up drivers with customers who need a ride. Like Uber, Kwipped connects manufacturers and

CMO equity incentive and shareholder value: Moderating role of CMO managerial discretion

Chief marketing officers (CMOs) are the marketing leaders in their respective firms and are responsible for creating shareholder value. To incentivize CMOs to focus on shareholders' interests, an increasing number of firms are compensating their CMOs with equity. This study examines the impact of CMO equity incentive on shareholder value and introduces three different forms of managerial discretion given to CMOs as contingencies determining when the impact of CMO equity incentive is more or less. Results based on CMO compensation data from 1993 to 2009 confirm the value relevance of CMO equity incentive above and beyond equity incentive allocated to other TMT members. Furthermore, the results reveal support for the moderating effect of financial, strategic, and operational forms of CMO managerial discretion. Theoretically, the findings identify hitherto unrecognized boundary conditions determining when the impact of CMO equity on shareholder value is higher or lower and address several limitations characterizing past research on the topic. Managerially, the results can guide firms in structuring CMO compensation and discretion in ways that optimize the effect of CMOs on shareholder value.

Tradition & Taste: Exploring Consumers' Changing Attitude

This case depicts a managerial problem faced by Tradition and Trust, a traditional sweet and snack manufacturer, which is 100-year old family business manufacturing, retailing and exporting sweets, snacks and other confectionery products. Like other traditional sweet and snack manufactures, the company is facing the challenge of consumers' shift towards ‘healthy snacking’. Moreover, brands like Haldiram's and Bikanerwala are posing a tough competition to the traditional sweet manufacturing brands. In recent years, the brand has witnessed a decline in sales. In view of the challenges posed to brand, the Chief Marketing Officer, wants to understand the various factors influencing decline of sales and find ways to redesign the strategy for sustaining its current position in the market. The case is written to illustrate how six fundamental steps of conducting a marketing research can be used to address a given managerial problem.

Personalisation, data and trust: The role of brand in a data-driven, personalised, experience economy

Smart connected products and services, powered by consumer data, are changing the relationship that brands have with their consumers. If delivered well, experiences are on-brand and enhance the overall trust that consumers have for a brand. Chief marketing officers (CMOs) and marketers need to work alongside product development, IT and legal teams to ensure that the firm is giving consumers a compelling value proposition in exchange for their personal data, and that the experience reinforces the brand promise. An effective way to do this is to build important trust-building moments into the customer journey so that ‘moments of truth’ are augmented by ‘moments of trust’. Marketers need to ensure that their brands’ actions around privacy align with their brand values, and they need to be very deliberate about which brands they partner with, so as not to lose the trust of consumers. Success in the experience economy depends on a brand’s ability to offer relevant, personalised experiences, which in turn depends on consumers being willing to share their personal data with a brand to power that experience. The mission of marketers in the experience economy is to enhance consumer trust in all aspects of a brand experience, taking them well beyond creative communications into service and product design.

Marketing spending, firm visibility, and asymmetric stock returns of corporate social responsibility strengths and concerns

PurposeThis paper aims to focus on the unique goal of understanding how marketing spending, a proxy for firm visibility, moderates the effects of corporate social responsibility (CSR) strengths and concerns on stock returns in the short and long terms. In contrast to the resource-based view (RBV) of the firm, the visibility theory, based on stakeholder awareness and expectations, offers asymmetric predictions on the moderation effects of marketing spending.Design/methodology/approachThe predictions are tested based on data from KLD, Compustat and Center for Research in Security Prices from 2001-2010 and panel data based regression models.FindingsTwo results support the predictions of the visibility theory over those of the RBV. First, strengths are associated with higher stock returns, for low marketing spending firms, and only in the long term. Second, concerns are associated with lower stock returns, for high marketing spending firms, also only in the long term. A profiling analysis indicates that high marketing spending firms have high R&D spending and are more likely to operate in business-to-customer than business-to-business industries.Practical implicationsThe two findings highlight the importance of coordination among chief marketing, sustainability and finance officers investing in CSR and marketing for stock returns, contingent on the firm’s marketing and R&D spending and industry characteristics.Originality/valueThis paper identifies conditions under which CSR is and is not related to stock returns, by uniquely considering three variables omitted in most past studies: marketing spending, CSR strengths and concerns and short- and long-term stock returns, all in the same study.

The execution of marketing strategies in a developing economy

Purpose– The purpose of this paper is to examine how market leaders use marketing strategies to maintain strong performance in their respective sectors within different economic contexts in an emerging developing economy.Design/methodology/approach– Case studies of three consistent, high performing market leaders based on the Ghana Club 100 rankings over the past decade are conducted. This involves structured interviews with chief executive officers (CEOs) and chief marketing officers (CMOs) of the organisations studied.Findings– The findings indicate that irrespective of the country of origin of the firm, or the economic context in a developing country, effective marketing strategies can be used to enhance the performance of organisations in their respective sectors.Originality/value– The approach used in this paper enables the authors to address the effectiveness of the marketing strategies across the past three decades covering the periods of pre-, during and post-economic reforms, and to examine the influence of different types of ownership (local, mixed foreign/local ownership and a multinational) on the execution of marketing strategies in a developing economy.

Shedding light on the CMO revolving door: a study of the antecedents of Chief Marketing Officer turnover

Investigating Chief Marketing Officer (CMO) tenure through a longitudinal study of the antecedents of CMO turnover, the authors find that CMO turnover increases if firms’ sales growth is poor, while profitability has a similar though smaller effect when a new CEO is appointed, highlighting marketing’s contextual role vis-a-vis performance metrics. Coupled with other results related to industry sales growth and stability that make CMO turnover less likely, these findings underscore marketing’s demand- or customer-facing role in the firm. The authors also show that some of these results are distinct to turnover among CMOs compared to other top management team (TMT) executives. While this research does show support for extant theory, its focus on the CMO within the TMT results in important contributions to the turnover literature. These include the inverted-U effect of TMT marketing experience on CMO turnover and the nuanced attenuation by CMO insider-ness of a similar relationship between CMO tenure and turnover. Overall, the results lead to important practical implications for managing CMO turnover.

Publish or perish: Why chief marketing officers must become publishers to drive growth

This paper presents research confirming that publishing — defined as the production, management, distribution and optimisation of marketing and sales content at scale — has become essential to the future growth of every business. Marketing executives now view marketing content, in the form of marketing videos, white papers, collateral, articles, case studies, blogs and training resources, as the lifeblood of modern marketing. The research confirms that optimising marketing content is critical to growing the top line. The paper presents five key findings: (1) publishing has become essential to the future growth of every business; (2) managing the growing cost and complexity of content operations is a critical business issue; (3) chief marketing officers must become publishers in order to build brands, engage customers and support sales effectively; (4) marketers must simplify, streamline and automate their publishing processes to grow effectively; and (5) marketers who do not optimise their publishing process are putting their growth plans at risk. This in-depth analysis of best practices is designed to teach chief marketing officers — and their direct reports — about the steps they must take to simplify, streamline and automate their publishing processes successfully.

Best Practices of Campaign Management for a Telcom Operator

Challenging times for Chief Marketing Officers (CMOs) in Telecommunication space: The telecom industry is a fast moving, emerging, evolving and converging space with rapidly changing business scenarios and technology variations. This poses a formidable challenge and also an opportunity to the CMOs. Churn rates reaching up to 8-10% or further are experienced by most telecom operators across the globe. Although large investments are made to bridge the gap, but CMOs have been forced to admit that there is no unanimous solution. ARPU on a steady decline: With greater maturity in the marketplace, operators attract more marginal customers leading to inevitable squeezing of ARPU and margins. Also, new technology alternatives such as VoIP are further eroding traditional profit centres for most of the operators. Multiple channels to the customer: Telecom operators have a distinct advantage - telecommunication companies control the media as well as the message. Mobile operators in particular have access to the new billboard i.e. the mobile phone. On the downside, as increase in the choice of channels to the customer also means more sophistication in execution is required to choose the most appropriate channel to each customer.

Integrating online communities within business-to-business marketing communications: an exploratory study

The article provides a conceptual contribution by developing a framework for business-to-business (B2B) marketers seeking to implement online communities (OLCs). Furthermore, the conceptual contribution is augmented by a small-scale exploratory study comprising in-depth interviews with B2B chief marketing officers (CMOs). The findings challenge existing thinking that B2B marketers can follow generic marketing communication frameworks. This is due to the differences in B2B OLCs in terms of multiple stakeholders and two-way information flows and differences in buyer behaviour. For researchers, the contribution is an embryonic model that will facilitate future conceptual development as well as empirical testing through a series of research propositions. A sequential decision-making framework, which identifies key implementation challenges, is provided for B2B managers.

Do CMO Incentives Matter? An Empirical Investigation of CMO Compensation and its Impact on Firm Performance

Despite growing interest in various facets of the Chief Marketing Officer (CMO) position, there is very little research on CMO compensation. Accordingly, we set out to investigate the determinants of CMO compensation and its effect on firm performance. Employing the lens of agency theory, we hypothesize that the CMO’s marginal productivity will positively impact the amount of total compensation as well as the extent of performance-based compensation in the CMO’s compensation contract. Moreover, we hypothesize that deviations in contracting elements from predicted levels will adversely impact firm performance. Analyzing a sample of 9,230 firm-year observations over the period 1992-2013, we find that CMOs employed at firms with high advertising and R&D intensity, and operating in competitive product markets, command larger amounts of total compensation. Moreover, a greater proportion of their compensation is market-based, with heightened sensitivity to movements in the firm’s stock price. We also find that deviations in CMO compensation elements have an adverse impact on operating performance (ROA), earnings surprises, and stock returns. Specifically, a 10% deviation in market-based compensation from predicted levels reduces ROA by 0.28%, dampens earnings surprises by 0.19%, and degrades annualized stock returns by 2.4%.