Strong digital marketing performance delivers higher salaries to CMOs
Around the world, marketing leaders in companies with strong digital marketing outcomes earn more than their peers — as do those who report directly to their CEOs, according to global research by the CMO Council in its upcoming compensation report. The study also demonstrates that good peer relationships provide an advantage, with the most highly paid CMOs revealing that they have forged close partnerships with CFOs and CIOs.
Overall, though, most CMOs believe they are hard done by. According to report author Dr Kimberly A. Whitler (pictured) of the Darden School of Business at the University of Virginia, “With a minority of CMOs believing that they are fairly paid, there appears to be a general issue with CMO compensation.”
Which-50 asked Bridget Gray, managing director of executive recruiter Harvey Nash Australia (and a regular Which-50 contributor) if there was any evidence that local marketing compensation packages are rising above trend in markets where digital and tech are more important. Her experience seems to align with the study’s findings.
“Over the last five years CMOs, and their salaries, have forked out onto two paths. The first is the ‘classic’ CMO. Here, like most executive roles during the global recession, salary inflation has remained fairly constrained. But don’t shed too much of a tear for them; a CMO in top tier multinational will command a seven figure package.”
According to Gray, “The second path has been one where digital plays a big part of the CMO role, and we are definitely seeing greater salary inflation here, particularly when the CMO has digital transformation (not just marketing) under their remit. What is different about this second path is that there’s a lot of variety on what the ‘digital’ CMO does; no two job specifications are the same, and the same goes for the salaries.”
For some big data is the key driver, for others its social, for others still it’s wider digital transformation, she said. “Harvey Nash research suggests that this whole area is in a lot of flux; a lot of experimenting is going on and not all results are a spectacular success. The successful digital CMOs of the future will not only need to show they have experience in these areas, but clear, strong evidence that it has impacted the bottom line.”
In Gray’s experince, the reports findings about the importance of peer relationships is borne out as well.
(Harvey Nash Australia managing director Bridget Gray)
“Building relationships across disciplines has never been more important. Ten years ago it was quite possible to have HR, IT and marketing strategies developed in isolation. Fast forward to today and it would be impossible – for instance – to launch a social media strategy without having a sense of the underlying technology and security implications, and how it affects employees of the business, “ she said.
“CMO and CIOs – in fact any CxO – are less about ‘top down’ management and much more about being figureheads of multidiscipline teams. This calls for a different skillset from old with an emphasis of influencing, relationship building and – and this is the big one – the ability for people to naturally trust you.”
The report highlights some key findings:
- CMO compensation is directly related to reporting structure — CMOs making more than $US500,000 per year are more likely to be reporting to CEOs;
- The highest-paid CMOs have strong relationships with CIOs and CFOs;
- B2C CMOs have a higher salary than B2B CMOs;
- Not surprisingly, the bigger the company is, the higher salary and bonus CMOs have;
- CMOs are more likely to have a higher salary if the digital marketing performance of the company is high;
- Different marketing titles (CMO, VP of Marketing, SVP of Marketing) don’t significantly have a direct impact on chief marketers’ compensation.
The report is part of a global study. Respondents included executives with titles like CMO, CEO, EVP, SVP or VP. The report is part of the soon-to-be released eighth “State of marketing” audit by the CMO council.