Richard Sanderson | A Rapid Evolution in the Marketplace - The Spencer Stuart 2025 CMO Study

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0:51Select from over 30 expert-led sessions. Register for free at adobe.com slash go slash CMO Confidential. Welcome to CMO Confidential, the podcast that takes you inside the drama, decisions, and choices that go with being the head of marketing. Hosted by five-time CMO, Mike Linton. Welcome marketers, advertisers, and those who love them to Chief Marketing Officer Confidential. CMO Confidential is a program that takes you inside the drama, the decisions, and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former chief marketing officer of Best Buy, eBay, Farmers Insurance, and Ancestry.com, here today with my guest, Richard Sanderson.

1:44Today's topic, a rapid evolution in the marketplace, the Spencer Stewart 2025 CMO study. Now, Richard began his career at Russell Reynolds and Booze and Company, and he moved to Spencer Stewart, where he leads the marketing, communications, and sales practice. He's kind of a big deal. He leads approximately 25 searches a year for CMO, CRO, CCO, and sales leadership positions. And Spencer Stewart just completed their annual study of marketing across the Fortune 500. CMO Confidential is delighted to be the first to discuss these results with Richard. Full disclosure, we've known each other for quite a while as Richard recruited me to the Allworth Financial Board.

2:33and this is his third time on the show. Welcome back, Richard. Thank you, Mike. Third time. Do I get a participation trophy now, finally, from CMO Confidential? As soon as we make mugs, we will send you one. So, hey, thanks for joining us on this topic. We think it's an awesome topic. And before we dig into the 2025 study, let's talk about why Spencer Stewart does this study and what you have seen over the 20 plus years of doing it since you all originated it. Well, thank you. And look, a lot of the credit, if I can say out of the gate, goes to my colleague, Greg Welch. Many people listening may know him.

3:14He is the godfather, if you like, of CMO leadership and advisory services. And he started this concept back in, I think it was 2020. This is now our 25th year of doing this. So it goes back. You met he started it in 2002, right? Yeah, he started back in roughly 2000, 2002, back then, 25th year. He was the brainchild behind this. And at the time, there really wasn't any comprehensive data on the CMO role. A lot of it was speculation. It was gut feel. It was gossip. And this was an attempt to try and put a data-based framework around what is happening to the chief marketing officer. It started off exclusively looking at tenure.

3:57So how long were people in roles? But the data we look at now has expanded much beyond that, Mike, and I'm sure we'll get into that during this conversation today. Yeah, and you guys have brought it into a deeper. You ask more and more questions, they get deeper, and you broaden the survey results as well in terms of more people are participating now, right? Yeah, that's right. So we have evolved the data set over time. I mean, just to be clear about what this is, the data set we're using is the Fortune 500. So to be clear, this is the largest 500 companies in the US by revenue. It's therefore focused on large cap, publicly traded businesses.

4:34I recognize it doesn't capture some of the trends happening with, say, private equity backed businesses or small cap or early stage businesses. But nonetheless, when you use the Fortune 500, it's a stable number. It allows for analysis over time. And importantly, what it also allows us to do is we can do analysis of chief marketing officer roles versus other functional and leadership roles. So at Spencer Stewart, we are making now analyses of all the C-suite roles. And for the first time for the last few years, we're now able to put what is happening to the chief marketing officer role in perspective to everything else that's going on in the C-suite.

5:12And I think that's really the power of the insight there. So I love that. So 2025, hot off the presses. Give us Richard Sanderson, top lines. Okay. So I'll give you three headlines and I'm sure we'll go into a little bit of details on each of them. Look, number one, the average tenure of the chief marketing officer in the Fortune 500 this year is 4.3 years. Now, here's the honest truth, Mike. I don't think the tenure story is that interesting any longer. The tenure of a CMO is actually much more stable than people realize. And for the last five years, it's hovered between 4.2 and 4.5 years. What's more interesting, and I hope we have a chance to get into this, is when you compare it to other C-suite roles and when you break it down by industry.

6:01But topic number one is 4.3 years average tenure. Topic number two, which I think does come as a surprise to people, is a full one-third of the Fortune 500 companies do not actually have a chief marketing officer. There may be a perception or belief that every company has a chief marketing officer. That is not true. And indeed, we have seen a number of eliminations of the role, and we have seen some big differences by industry. And again, we can get into that. And related to that is probably the third headline I'll give you, which is related to the evolution of the role. Of the companies that do have a chief marketing officer, only 40 % of them are actually called chief marketing officer.

6:43I mean, now we're seeing a large chunk that are, and I'll give credit to Lisa Mann at Reigns International. I first heard her describe this. They're CMO and ROBS. Now a few things are being, other functional areas are being tacked onto this. There's another large chunk where we've seen a real growth towards chief commercial officers, chief revenue officers, chief growth officers, chief experience officers, what I'll broadly call marketing adjacent titles. And then there's another set of folks that actually don't have the word chief and the title at all. They may be SVPs of marketing and some other functions.

7:19But this concept of title evolution has become really quite a significant feature. And right now, a minority of marketing leaders even have the title, the sole title, chief marketing officer. So this is super interesting because what I'm going to say is tenure is relatively stable, but the role is evolving at speed and it's consolidating and absorbing and changing the title, what are the pressures that are causing the title change and what I'm going to call the absorption of other functions into the role or marketing into other functions? Yeah. So first of all, I would say this 4.3 number is not a bad number.

7:59I know there's this sense or the concern that this is a revolving door and CMOs are out of the job before they've barely got a chance to get their feet under the table. And the data would suggest, look, that's actually really not that true. We are seeing some real differences though across industry. If you look at that 10-year number, the lowest tenure you actually find in consumer businesses, the average tenure of a chief marketing officer in a consumer business, it's under four years, it's 3.9 years. The highest tenure is actually in healthcare. So you see the average tenure of a chief marketing officer there is 5.3 years and financial services is pretty high at 4.8.

8:38So you're seeing some real differences across industry and people may ask, well, what's going on in consumer that's causing the tenure there to be so low? I have had a theory for a while, and we do track this and we'll talk about it in the release this year of the data, that in consumer in particular, the marketing role is actually a platform role onto arguably bigger or better roles, either within their business, or they're moving on to another bigger or better role somewhere else. Indeed, as we've tracked this and we look at chief marketing officers who leave their role, we are finding in the last year, 65 % of exiting Fortune 500 chief marketing officers were either promoted to a new role within their current company, or they moved to a a role in another company or in a lateral or a step-up position.

9:32In other words, the marketing role is a platform role onto something else. It is not the end of your career. Now, that, I believe, is more true in consumer, where those roles, particularly in consumer package companies, have been groomed as general management roles, P &L roles. So this is where I sort of encourage people, this number, low tenure is not a bad thing. I have been at pains to dwell on this fact. We should not view short tenure as failure. That is not the case at all. In fact, in many instances, particularly in the consumer industry, I would actually argue short tenure is a measure of success because these folks are being identified for bigger and better onward roles.

10:10And when you say platform, is that because these people, particularly in consumer, are getting deeper, broader training than other CMO roles? Or is that because that's where the talent usually just gets groomed the most for the bigger job? Look, I think candidly, we do see it more in consumer, more broadly. I mean, we do track also, for example, the chief marketing to chief executive officer role. How many folks are making that leap? And look, it happens quite a bit. I mean, even just in the last few months, another great example, Michelle Peluso, who was, she's been a multi-occasion chief marketing officer.

10:51She was the chief customer officer at CVS, appointed CEO at Revlon. Brady Brewer, who was the chief marketing officer at Starbucks, has moved, I think has moved into the CEO of the international business at Starbucks. I mean, these are great examples. In these cases, these are examples of consumer root up marketing leaders. But this is the point. And when I talk about a platform role, this is a way station, if you like, that gains you broader experience, a closeness to the customer that is actually very helpful and very powerful in onward general management, and in some cases, chief executive officer roles.

11:27Nice. Thank you for that. Let's talk about, well, first, is there any other big gaps between like B2B and, you know, B2C or anything that you're seeing? And why the long tenure in healthcare? Because that's like over 20 % more than - Yeah. So, I mean, I have a theory. I mean, in healthcare, and I think we have to be honest with ourselves for a moment, the marketing function plays a different strategic and commercial role than it does, I think, in consumer businesses. In many cases, I'm going to pick my words carefully here. Marketing is more of a support function than it is an enablement or a growth function.

12:10Although I have to say that is rapidly changing in healthcare. That's a podcast for another occasion, I think, Mike. But the reality is the CMO role in healthcare, particularly in some healthcare providers, may actually be the pinnacle of someone's career, whereas in consumer, I would actually argue it's a way station along the way. And so to me, it may not be as surprising that you're seeing longer tenure in healthcare than you are in, say, consumer. Helpful. Thank you. Can we flip to a third of the companies don't have a marketing or CMO role? And how do you feel about that? Is that trending down?

12:48And what's going on there? Yeah. So at first, I think this is actually probably the most shocking number, that a full third of companies don't have a chief marketing officer. I assume zero companies don't have a chief executive officer. I assume zero companies don't have a chief financial officer. I'm pretty confident in saying the overwhelming majority of companies probably have a chief HR officer or a general counsel, or even a chief information officer for that matter. But to find that a third of companies or our largest companies don't have a chief marketing officer. What's going on there?

13:21And again, we are seeing some big differences across industries. Again, not to pick on industrial, but I will. 49 % of industrial businesses do not have a chief marketing officer. That is by far the biggest standout. On the other hand, only 20 % of TMT, so technology, media, and telecom companies, don't have a chief marketing officer. So we're seeing wide, wide differences in industry. Hey, Richard, and when you say industrial, give us some examples of what companies are. Chevron. So I'm going to pick a great example, very few of the oil and gas businesses, for example. Chevron, various petroleum businesses.

14:01I was looking at the data last night, Lockheed Martin, for example, Northrop Grumman. These are large, important companies, but they're making fighter jets, for example, for oil and the role of CMO is just not needed at the C-suite level in those businesses. Here's the important point I would make, however. The lack of a CMO does not mean, in my opinion, that marketing is not important. What it actually means is, and this is what we find when we dig into it, marketing leadership manifests itself really differently. And this is where I think what's been fascinating for me and my colleagues over the last year or two, some of those interesting conversations that we have had with our clients is about organization structure and where should marketing sit and what should the scope of those marketing leadership roles be.

14:52So let me give you an example. I think the most common discussion we have with our clients around marketing leadership structure is, should the role be centralized? Should the role be decentralized or should it exist in some hybrid structure? And what does that mean as to whether we should have a chief marketing officer or not? The most obvious example I think most of us think about with a CMO is it's a centralized business. So you have enterprise level capabilities and you have a CMO who's responsible at the center for brand, creative, digital, data, growth initiatives, analytics, sponsorships.

15:29And so you have a very clear structure. And there's a number, many businesses have that structure of a centralized CMO. AT &T has essentially moved to a centralized structure recently under Kellen Kenney. Allstate has this under Elizabeth Brady, BlackRock, SAP, Charles Schwab, Goldman Sachs. They all have very centralized capabilities. And you will find an enterprise-level CMO in those roles, in those businesses. There are other companies that have chosen to operate in a decentralized structure. And what that means is marketing exists, but it's typically wholly owned either by a business unit or by a geographic region.

16:06Right. Or by regions or, yeah. So particularly for large global businesses, which may choose to organize themselves and run the P &L by geography, they may, they have marketing leaders, but it sits in a business unit or a region. There just may not be an enterprise level role reporting to a CEO. And then of course, where we're seeing companies fudge the difference, and we're seeing a lot more of this now are these hybrid structures where you may have a center of excellence model and you may have business unit marketing reporting directly into their business units or to some sort of enterprise marketing or brand leadership role.

16:42I mean, a great example would be J.P. Morgan Chase. You've got Carla Hassan in the enterprise role, but the reality is it's kind of a federal structure is my understanding of J.P. Morgan Chase. They have a number of business units, each of which have their own CMO with a high degree of autonomy and decision rights and their own structure with some layer of centralized support or center of excellence model at the middle. So the issue here, Mike, is again, as I said with tenure, we shouldn't mistake these low numbers for lack of importance or marketing just doesn't matter. It's really a function of marketing, organizational design is driven by desired outcomes and organizational scale.

17:24And that's the takeaway, I think. It's not doom and gloom. It's not marketing is over and these roles are going away. That's not the case. They just live in different forms and structures. I'm happy about all these people getting promoted to bigger jobs and people recognizing this. Can we talk, though, about in the last couple of years, there's been companies, and I'll just specifically say Lowe's, McDonald's, and Starbucks, that they went one way with the marketing job, and then a year or two later, they went the other way. what's up with those kind of head fake moves by these very, very large companies?

17:58Yeah. So, okay. So you've called out a couple of interesting examples. So if I recall correctly, I think Lowe's eliminated the chief marketing officer role in 2022 when Marissa Thalberg left, only to bring it back two years later in 2024, when Jen Wilson was internally promoted and elevated into the role. I think Etsy has recently done a similar thing. The role eliminated when Ryan Scott left in 2023. They reincarnated the role in a chief operating and marking officer role with Raina Moskovich, and she just left to become the CEO of The Knot. And now they've moved back to a CMO structure and internally promoted Brad Miner into the role.

18:34Most famous people, oh, Coca-Cola. This did cause a lot of pearl clutching. They eliminated the role in 2017, replaced it with a chief growth officer. And now that they did come back to a global chief marketing officer role in 2020. UPS and Walgreens both eliminated the role, I think, in the same week in late 2023. Starbucks took out the role when Brady Brewer, who you mentioned earlier, moved to the CEO of International. Now, under the new CEO, Brian Nicol, they've brought it back in the form of a chief brand officer. Gosh, there's a lot of Cummings and going. I mean, I think about this though, Richard, because the businesses are still roughly the same.

19:16Is this because the leaders are changing or is the marketplace changing? I think it's all of the above and then some more, Mike. I think clearly at Starbucks, I think you're seeing with Brian Nicol, he's got a view on what he wants marketing to look like. And he's reinstated this role in the form of a chief brand officer. I do think, I mean, when we talk to our clients around when they're either creating this role or redesigning this role, I mean, essentially it comes down to, we have this four S model. I can just sort of share some, some proprietary thinking. I mean, it's not shocking, but the four S's are, are what is your structure?

19:52What is the, what is the strategy, the structure, the scope of roles and the skills required? These are the sort of the four S's that go into how do you construct really any formal go to market role? Most commonly it manifests itself in marketing, but this applies to these chief growth, these chief revenue, these customer commercial officer roles. And it's some function of like, what is the structure that's right for you going back to this centralized versus decentralized versus hybrid? What is the scope of role? We've spoken about these sort of and roles. And I do want to come back if I may and just talk about the evolution of these growth officer, commercial officer roles.

20:30So in what form should marketing exist? And then what are the skills you're going to need to be successful in this? And overall, is it driven? And does it align with the strategy of the business? I think we live in very volatile times, Mike. There's a lot of change taking place. And so I do feel it's almost like a bit of a pendulum. Companies go back and forth on their org structure. Some of it is dependent on a certain moment in time, a certain CEO, a certain leadership team, a certain value creation proposition. and what is the right structure and the right leadership team to support that. So you have to be pretty nimble if you're a CMO looking at these things to make sure you've got all this timing right.

21:11Let's go to the part you were just referencing, if you don't mind, which is, you know, marketing becoming part of other functions or other functions becoming part of marketing, the dynamics there and what you think is going to keep happening. Yeah. So we're talking about things like the chief growth officer. This first came about in consumer products. I think I first remember seeing this in some detail around 2013. We saw a wave of CPG companies. They were struggling with growth. The irony here is, Mike, for most of those companies that created a chief growth officer, it didn't actually result in growth.

21:47So simply creating these roles alone - If you could just say growth and get it, everyone got that title. It's really not that simple. But that was an attempt to bring together or at least fuse the lever that can drive growth in a consumer products business. So it was marketing, R &D, insights, innovation, even in some instances, an inorganic growth. So an acquisition agenda was even seen in the broadest manifestation of these roles. The chief commercial officer role has become very common in hospitality businesses, which is essentially a combination of sales and marketing. Hyatt with Mark Mondrasik, who's been in that role for a long time now.

22:27Marriott has Peggy Rowe in this much broader than just marketing type of role. The chief revenue officer role has become exceptionally common in aspects of technology, particularly software businesses. My favorite example, if I may share one with you, is the retail industry, which may be near and dear to your heart, which is the chief customer officer role. And we have found, you know, at least now half of retailers of scale have experimented with some version of a chief customer officer role. And I always get asked, well, what the heck is a chief customer officer role? So here's what it is. I mean, I think of it, there's various building blocks.

23:06What we find in all these chief customer officer roles, there's what I call table stakes. So all these roles have this. They have brand, creative media, insights, analytics, customer experience, digital marketing, customer strategy. That's sort of table stakes. Then you start getting these add-ons. And I'm calling these sort of CMO plus or even CMO plus plus roles. The CMO plus typically will add in things like all the omni-channel or the multi-channel activation. They'll link the physical and the digital assets. In some instances, the e-commerce P &L may be within scope of the tube customer office.

23:40Sometimes retail design and assortment is in there. Many retailers are looking at strategies to monetize first-body data, the growth of retail media networks. Some of that will often fall within the chief customer officer role. And in its broadest context, I only saw this with one person. That was Michelle Peluso at CVS. For a while, she also had store operations. So really, the customer experience, including the in-person touch points in the store, that's what's going on in retail. And Richard, are we looking at the CMO title as something that's going to go just out of vogue as more and more people become, like I was a chief revenue officer and some other stuff, is the CMO job going to disappear or just be renamed?

24:30Right. Well, that's a really important question, Mike. I mean, I have been of the view for a while. We are at this moment where we're seeing, are we at risk of seeing, let me put it this way, evolution or extinction? Right. Now, the data which I shared with you earlier would suggest where the role, where the marketing role exists right now, only 40%. So now less than half actually have this straight chief marketing officer role. So we are now in the majority of cases looking at some CMO plus type role or this evolution into this broader growth, customer, revenue type situation. the reason why it doesn't concern me is that this is the best thing that ever happened to marketing leaders your role if you do all the right things it's going to get bigger this is the golden age of marketing i've felt this for a long time i really don't have that much tolerance for the woe is me the role is going away what's happening it's like guys step up you've had you've never had more opportunity to have strategic and commercial impact and influence on your business than right now.

25:38So embrace it. And if you don't, then you should be worried. I like that. And we did all show on this with you that I will reference on the outro. But so am I, are we going to see a lot more marketers or whatever they're called in the future on boards, given this kind of evolution of, you know, marketing and sales, how people are thinking about things? So this is, so this legitimately, Mike, is a sore spot, I think, for marketers. It's a super, I'm just telling you, it is a super red hot, angry about it sore spot. It comes up all the time. And if I saw, if I was given a dollar for every time I saw someone post something on LinkedIn around how a CMO can get on a board, I'd be a very wealthy individual right now.

26:24There's a lot of cottage industry around there on this topic. We have looked at this twice, I think, over the last five or seven years, just to get a data point around how many sitting marketing leaders are on. I think we looked at the S &P 1000, so the largest 1 ,000 companies by revenue. It's a depressing number. I mean, I'll just tell you, I think when we looked at it pre-COVID, it was 37. Look, it makes you want to go to the Dennis Burn-Up lift. When we looked at it, I think we last looked at it two years ago, that number decreased from 37. So brace yourself at 41. I mean, we are not talking large numbers.

27:03And when you remember, that's the numerator. The denominator here is 1 ,000 companies we looked at. Let's say on average, they have 10 seats. That's 37 or 41 out of 10 ,000. That's less than 1%. It's depressing. Now, here's where we do see it work. So remember, what the data I shared with you was the S &P 1 ,000. It is true for the largest companies, the candidate profile for a board seat is depressively similar. It's go find a CEO or a former CEO or the CFO who we can put on the audit committee. There's a lot of that that goes on or go and find us a four-star general or whatever it may be that we can.