More CMOs Steering More Growth: Study
Companies that posted strong growth readings in recent years may have their chief marketing officers to thank for it.
According to a study released this week by consulting firm Booz Allen Hamilton, in cooperation with the Association of National Advertisers, companies that fully use their marketing organizations tend to register higher performance levels. In fact, the study found that business growth is emerging as a key measure of the right marketing being applied to the right brands,
The study found that marketing organizations can be classified into six basic categories, but only one category correlates with better performance: “Growth Champions.” Marketing departments in ANA, in a statement. “It’s critical that they play a greater role in strategic growth initiatives and develop significant general management skills while also applying financial and analytical expertise to guide large, growth-oriented investment decisions.”
An online survey asked 2,000 marketing executives about the structure, practice, decision rights, and capabilities of the marketing departments at their companies. The study sought to identify correlations between specific types of marketing organizations and the financial success of their companies. The results will be published by Booz Allen this summer. Among the findings to be discussed:
- 75% indicated they helped the CEO develop the strategic growth agenda, versus 38% of all respondents.
- 81% presided over product innovation and business development, compared with just 10% of the rest. In fact, half of the respondents in the other categories overall reported no involvement in these activities.
- Over 80% approve large, growth-oriented investments such as market-entry or product launches while less than 10% in the more traditional categories had this same authority.
- 87% make major strategic positioning, channel strategy, pricing, and communications decisions, and 98% lead other functions such as sales and finance on growth initiatives.
Along with Growth Champions, the other marketing models were:
Marketing Masters (38% of respondents), who develop and lead large company-wide marketing efforts, help set company priorities and may be highly regarded for their marketing skill sets. While they deliver good revenue growth and profitability, they fall short of the Growth Champion model.
Senior Counselors (17%), who serve as primary advisors to the CEO on marketing strategy but rarely become involved in product innovation or new business development.
Best Practices Advisors (9%), who work with individual business units to bring “best practices” to advertising, promotion, and p.r. activities. All but 5% of companies following this model are profitable, but their levels are not as high as those of the Marketing Masters or Growth Champions.
Brand Builders (12%), who provide marketing services (communications strategy, creative output and campaign execution), but take a negligible role in leadership and strategy. Growth and profits are on a par with industry averages.
Service Providers (15%), who offer ad, promotional and p.r. services to brand teams, but deliver below-average revenue growth.
The survey showed Industries with the highest concentration of Growth Champions included consumer products, media, and telecommunications. Best Practices Advisors and Service Providers tended to appear among financial services and utilities companies.
