Many CMOs are confident that they are raising the stature of the marketing function within their organization, although most still feel underpaid, according to a new study from the CMO Council.
Based on responses from more than 150 CMO Council members working across businesses of varying sizes, the study, CMO Compensation: Erosion, Stagnation or Elevation?, was conducted prior to the World Health Organization’s pandemic declaration.
It arrives on the heels of SpencerStuart’s annual CMO Tenure Study this week, which found that the average CMO’s tenure in 2019 was 41 months, continuing a steady downward drift.
But while CMO turnover remains an issue, three quarters of respondents in the CMO Council study indicated that they have gained stature and influence within their company in the past year, and 83% of respondents said that marketing is viewed as a “vital contributor” to business value by executive teams.
CMOs are also achieving business objectives, with only 15% of respondents indicating that they failed to meet their marketing goals last year.
Remuneration is something of a sore spot, however, with 57% of respondents expressing dissatisfaction with their current compensation package. Nearly two-thirds of respondents (65%) indicated that they are expecting a compensation increase this year, although the CMO Council says that the “economic devastation” triggered by the pandemic will negatively affect those numbers.
The vast majority (84%) of CMOs surveyed say that their compensation is tied to business performance, which is expected to be compromised by the global pandemic.
There is good news for female CMOs, however, with the report noting that they have eclipsed their male colleagues in both average salary ($212,898 versus $209,525) and bonuses ($56,229 versus $53,388).
The average annual CMO salary ranged from $103,458 at small companies of 10-49 employees, to $236,186 for companies with more than 250 employees. Annual bonuses ranged from $14,885 to $69,313.
Prior research conducted by the CMO Council found that chief marketers’ compensation is directly tied to a company’s reporting structure, with those making more than $500,000 a year more likely to report directly to the CEO.
The highest paid CMOs, the research found, have also developed strong alliances with CIOs and CFOs, while those earning the highest levels of compensation are focused on driving business performance such as top-line growth and market share.
The CMO Council also announced recently that it expects “wide-ranging changes” to marketing spend and agency relationships as a result of the current crisis, with nearly half of marketers surveyed saying they are bracing for marketing spending cuts this year, and another 26% indicating that they don’t know what’s going to happen to their funding.
It announced that big brand advertisers are looking to walk back spending commitments made to broadcast and cable TV networks, with the possibility that between US$1 and $1.5 billion in third quarter spending could be cancelled.