Chief marketing officers have not always been highly regarded by company leaders. In fact, as recently as 2022, only 6 in 10 CEOs gave their comms leaders an “A” or “B” grade, and 1 in 4 CMOs were thought to be underperforming, according to prior editions of the CEO Study on Marketing and the CMO from integrated marketing and comms agency Boathouse. But those and other unflattering stats took a decidedly upwards trajectory last year, according to the firm’s third annual edition of the study.
In addition to this shift in perspective—or perhaps because of it—CEOs now appear to see their marketing leaders as more vital to driving company growth, and the new research finds that chief execs want marketing to solve five core problems focused on growth: drive revenue/sales and market share; differentiate the company from its competitors; improve brand reputation; and transform the company narrative.
“Our survey represents the largest sample group measuring CEO/marketing attitudes,” said Peter Prodromou, president of Boathouse. “Given the relationship between CEOs, CMOs and corporate communications, it gives a unique and detailed window into some of the most important issues that affect brand, reputation and business.”
CMO tenure and performance
Another result of the research was the CEOs are taking notice of the historically short tenures of CMOs, which was formerly thought by leaders to be an indicator of failure. But as CEOs are feeling increasingly positive about marketing and their CMOs, more than half (51 percent) now believe that short tenure to be a sign of success—a dramatic change from just 20 percent in 2021—and they also give higher grades on job performance, with nearly three-quarters (73 percent) giving CMOs an “A” or “B” grade, compared to 61 percent in 2022.
Other findings on CMO performance:
- CEO’s “best in class” rating of their marketing (49 percent) and CMO (40 percent) double from 2021 study results (20 percent and 21 percent)
- In 2023, CEOs scored their CMOs significantly higher across responsibility areas:
- Relationship/trust with C-Suite and CEO are highest (43 percent/41 percent)
- Innovation and generating new ideas rise sharply from prior study (38 percent vs. 19 percent)
- Strategy is an area that CEOs grade their CMO the lowest (31 percent) although double 2022 (16 percent)
- CEOs say that 87 percent of CMOs understand their vision, and 80 percent take action to execute that vision
- CEOs say that 73 percent of CMOs are “bold” and “push the organization”
CEO on trust
“The survey revealed an odd trust dynamic, with CMOs gaining more trust across the organization, but having declining personal trust from the CEO,” Prodromou noted. “Given that marketing and communications—which often emanates from the CMO—requires a strong trust bond with the CEO, we see this as a trend worth watching.”
Overall, trust between CEO and CMO is growing with year-over-year study results highlighting areas of improvement:
- 45 percent of CEOs place CMOs in the “top tier” of personal trust on leadership—not as far off from CFOs (69 percent) and COOs (57 percent) as initially hypothesized
- In a dramatic shift from 2021, the CEO’s perception of CMO loyalty is growing—8 in 10 CEOs believe their CMOs would “take a bullet” for them (up from 3 in 10 in 2021)
- CEOs also believe that 91 percent of CMOs build trust well across the C-suite
Despite all the good news in 2023, the most surprising new trend is the decay of the personal relationship between the CEO and the CMO
- Only 20 percent of CEOs say the CMO is “on my side, I trust them,” and just 10 percent say the CMO “puts my needs before their own”
- Confidence in their CMO and alignment with vision/values also significantly weakens from 2022, with only 3 in 10 CEOs believing these statements are true of their CMO: “supports me in driving my long term-vision,” “shares my values,” and “is someone I have great confidence in.”
- In 2023, CEOs believe that personal loyalty has been replaced by company loyalty—only 9 percent of CEOs say CMOs are more loyal to the CEO (27 percent in 2022) vs. 51 percent who say the CMO is more loyal to the company (34 percent in 2022)
CMO: Board, business, and financial goal setting
The new study shows improvements in CMO board and business participation, but some lack of confidence from CEOs regarding their CMO’s financial literacy:
- In 2023, CEOs said that 77 percent of CMOs understood the company’s board and political dynamic (up from 63 percent in 2021)
- Although 94 percent of their CMOs attend board meetings, two-thirds participate in less than half of the meetings
- CMO understanding of the P&L and participation in financial goal setting fluctuated from 2023 to 2021:
- 69 percent of CMOs understand the P&L and the balance sheet, up from 53 percent in 2021
- Only 56 percent of CMOs participate in financial goal setting, down from 73 percent in 2021
CMOs and artificial intelligence
In 2023, the researchers set a baseline to understand AI adoption by CEOs and how marketing and CMOs are incorporating it into their departments.
- 76 percent of CEOs are integrating AI into their organizations, with marketing having the broadest AI adoption
- CEOs say that 58 percent of their CMOs have made AI presentations, asked for funding or created new processes using AI
- Over half of CEOs grade their CMOs an “A” or “B” for their ability to integrate AI/Machine Learning
- When we ask CEOs why AI matters in marketing, the majority view it as a tool to sustain innovation, and the rest are split between disruption and efficiency
- AI integration in marketing is most predominant in content (generation/personalization), analytics (about two-thirds), and customer experience or research (half)
“As expected, AI is a top priority for CMOs with 58 percent of CEOs reporting that their CMOs presented an approach to them,” said Prodromou. “In a time when marketing and communications professionals are trying to find the right balance of AI and its role in the organization, it’s encouraging that this is getting CEO attention.”
Conclusions and implications
Given that the majority of CEOs self-report that they are still a long way from delivering on their company vision, how CMOs are evaluated in this area is critical for the CEO/CMO relationship.
Implications: Where do CEOs feel most confident in CMOs capabilities? There seems to be a disconnect—CEOs say 87 percent of CMOs understand their vision; 80 percent take action to execute vision, but only 31 percent support the CEO in driving their long-term vision.
There was a consistent uptick this year in how CEOs grade their CMOs. However, CEOs show skepticism that their CMO can maximize marketing’s full potential in the areas CEOs prioritize for marketing (revenue/market share growth, differentiation, brand/reputation and transforming the company narrative).
- Although improved from 2022, the lowest “A” grade given to CMOs is in the “ability to drive company growth”
- Strategy is a weak spot—only 23 percent grade their CMO an “A” and 13 percent give them a “D” or “F”
- 31 percent of CEOs do not believe their CMO understands the P&L and 44 percent do not participate in financial goal setting
Implications: Are CMOs myopic in their functional role fueled by the complexity and evolution of marketing? How can they embrace the CEO’s pragmatism and be part of the financial and strategic goal setting?
Relationships with the C-suite and company loyalty are strong, but there continues to be a gap in the personal trust dynamic between the CEO and CMO.
- 20 percent of CEOs say the CMO is “on my side, I trust them”
- 10 percent say the CMO “puts my needs before their own”
- 9 percent say their CMO’s loyalty lies with the CEO
Implications: Deepening relationships between CEO and CMO is critical to achieving mission critical company goals. Marketing and communications require a strong trust bond with the CEO.
As expected, AI is a top priority and CEOs report the broadest adoption in marketing, with a focus on content and analytics.
Implications: CMOs are looking for tangible ways to demonstrate value and ROI of AI. Equally important is to ensure AI is being implemented with utmost care and responsibility. Additionally, integrating AI further upstream for insights and relevancy can help align narratives with growth.
“Only 11 percent of CEOs reported they have achieved their organizational transformation goals,” said Prodromou. “Given the critical nature of marketing and communications to drive the public perception of a transformation, the CMO and communications groups should have a seat at the leadership table to get key transformation narratives out to internal and external stakeholders.”
