Does a CMO Tenure impact EPS?

Show Notes

  • ? 02:36
    Overview analysis of CMOs tenure and its impact on Earnings Per Share (EPS)
    ? 03:54 -Why we are seeing data indicating that it doesnt matters who steers the ship in marketing programs


  • “Using the same 62 companies from Fortune 500 companies that we used for comparing organic visibility and paid visibility, we took a look into trying to say theres a correlation between CMO tenure and SEO visibility. The average CMO tenure is relatively short, its about two or three years.” -Melanie

  • “What we want to be able to say is that, as SEO visibility increases the length of CMO tenure decreases.This is not what we are seeing with these data as we had an r value of .15, so a very weak positive correlation. I cant say with any type of certainty that there is any correlation at all between these two values.” -Melanie

  • “As it turns out it doesnt look like it matters who is steering the ship on the marketing program. What matters is what channels they are running and how efficient and how much visibility they have.” -Ben

  • “If we are using sets of data that put us on thin ice we recognize that as a company that is incredibly data-driven and very analytical and critical of data, we understood this coming in. The source of our data here was LinkedIn and obviously our own paid and SEO visibility data. I think one of the potential pitfalls of this outside of the sample size is the fact that there are so many externalities that can affect EPS, as an example.” -Doug

  • “And then as you look at a CMO and their pulley to guide the ship, youre also looking at externalities and internalities. In other words, are the things affecting them from a marketing conditions standpoint, and is their own competency and/or the politicsand/or the status of their ability to really affect change in a company, how do these things work together? I would say this is probably the least shocking information that we got out of this research is that there is no correlation because there are justtoo many things that happen from the outside in and the inside out that will influence CMO tenure.” -Doug

  • “Many CMOs really understand SEO and really understand the impact of SEO. Ultimately, I dont think that there is a correlation between this data but there is certainly a conversation that needs to be had here about how the tenureship of the CMO should be impacted by SEO performance and the performance of search. Quite frankly, I think its one of the most important channels and it is by far the most overlooked channel by most businesses.” -Jordan

  • “I will use the metaphor again of eating your sugar vs your broccoli. I think that CMOs are under a tremendous amount of pressure because the average tenure is eighteen months and they know that they need immediate performance. What were seeing is, CMOs will often turn to performance marketing channels to drive fast results as opposed to channels that have longer-term benefits because they are trying to keep their job.” -Ben

  • “The interesting thing about this is, we are seeing SEO having a positive impact on EPS, slightly at least. Then paid search having a negative impact on EPS, also slightly and then it doesnt matter who the CMO is, its because the CMO is probably gone by the time your SEO channel is really humming and established. It takes months and sometimes years to build credibility with Google and so youre seeing multiple CMOs turnover in the time it takes for Google to really recognize who is the strongest brand in the market.” -Ben

  • “One thing that we need to understand about the data was actually that, what we saw was CMOs for the larger companies had longer tenures than your average CMOs at other companies. The difference here in terms of correlation was that irrespective of whether SEO visibility was going up or down and paid visibility was going up and down, the tenure of the CMOs in this space actually was quite long. They are actually breaking the norm.” -Doug

  • “In many ways I feel like this is more of a reflection of a small company. With larger companies I think there is more wind in their sails, if you will, theres more of a foundation, more of a long-term view. These companies are much less likely to turnover their CMOs because it is such a dramatic change and they are so dependent on marketing to drive revenues so to make that change is a big deal.” -Doug

  • “I disagree. With a smaller company, when you replace your CMO the strategy is impacted. There are less resources and fewer leadership. It is easier to steer the ship in a different direction when you dont have an established foundation.” -Ben

  • “When you are working at a big company and you fire the CMO, theres 15 VPs and they are not going to change all of their strategy until someone comes in and tells them theres something else to do. I do think there is more of an active leadership role at smaller companies as opposed to larger companies, it just takes a longer time to steer the ship. My feeling is that replacing a CMO at a smaller company has more near-term impact as opposed to a larger company.” -Ben

  • “I will also say that part of the reason the turnover is so heavy in smaller companies is, they have such a huge growth focus and growth equals life, in other words its existential. Irrespective of whether the impact is heavy and it tends to be heavy, its all about growth. If that growth isnt achieved, you are going to lose that CMO and quite often thats why companies fail. They have too little patience when it comes to the growth curve.” -Doug

  • “I feel like any revenue-facing position naturally has high turnover and what drives that is the impetus for growth. I agree there is a certain amount of inertia that occurs with larger companies but I will also say that at smaller companies, its not about practices, its whether you are going to hit those numbers.” -Doug

  • “If we are looking at a long period of time here, the CMO is largely not that involved in many SEO-related decisions. Lets be honest. I dont think there are many CMOs who really are invested in the concepts of SEO. I think they are invested in trying to figure out a lot of other issues like personnel, other marketing mix, branding.” -Jordan

  • “My opinion here is that CMOs are becoming more enlightened to the concept of SEO. And as that happens, this correlation may become stronger and as that happens the disparity between companies and CMOs who are successful will depend more and more on SEO.” -Jordan

  • “As much as we joke around about Doug and his role, the CMO does matter. The person leading your marketing efforts matters. I do think there is a lack of correlation here based on in part, the timing and partly because theres an inertia for larger companies. But at the end of the day, what matters is the marketing channels and the efficiency and not necessarily who is running the team in terms of EPS.” -Ben

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