Feature

Marketing Budgets Rise, CMO Tenure Falls

3 minute read
Tom Murphy avatar

Two studies from IDC's marketing group provided mixed messages for CMOs.

First, the good news. A survey of 101 large technology companies showed thatthey expect to increase their marketing budgets by 3.5 percent this year, nearlymatching the 3.7 percent growth they expect in sales. The average surveyparticipant was a company with more than $7 billion in sales.

Trend Reversal

"For the first time in eight years, IDC is seeing that marketing budgetsare increasing at about the same rate as revenues," said Sam Melnick,senior research analyst for IDC's CMS Advisor Service. "This is positive newsfor tech marketers and also a clear indication that the C-Suite is ready to putadditional marketing investment up against more promising businessprospects."

Those prospects are so-called third platform products such ascloud, social media, mobile technologies, big data and analytics. The surveyfound companies with a high percentage of those products will be boosting theirmarketing budgets "upwards of five times" that of the averagetechnology company.

Melnick said the growth rate is dependent on continued investment in thirdplatform technologies. "To continue this growth, executives must continueto invest to be competitive in these high-upside segments," he said in astatement.

Shorter Stints

The bad news is that a separate study of 152 tech companies found that 77 --just over half -- have replaced their CMO in the past two years as requirementsof those jobs shifted from building brand awareness and running campaigns toapplying analytics and other digital marketing technologies to help meetspecific revenue targets.

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Learning Opportunities

Kathleen Schaub, an IDC vice president in the CMO practice, called this an"astonishing" percentage, although the survey confirmed what shereported anecdotally in a CMSWirestory more than a month ago. At that time, she said she was seeing a lot of churn in the CMO ranks, estimating that at least a third of thesenior marketers had been in their jobs less than two years.

The new finding also runs counter to a recent study by Spencer Stuart, anexecutive placement firm, that found the tenure of CMOs has soared to 45 monthsfrom just 23 months in 2006.

Rise or Fall

"CMOs must own the digital disruption of buyer experience for theircompanies," Schaub said. "Those CMOs able to rise to the challengewill be provided more resources and given more power. The unprepared will bereplaced."

She said chief executives also must wake up to the fact thatmarketing departments now directly contribute to revenue and reputation.

"It's their job to pick the right person for today's challenges,"she said. "To get the CMO selection right means the CEO needs to understandand get closer to marketing."