Many of our clients look to us to add real value, and to prove the effect public relations and content marketing programmes have on public perception, lead generation and ultimately sales.
There is of course a limit to what any external company can measure and influence; an agency could increase awareness and website traffic a thousand fold and instigate a 100x increase in sales enquiries, but if those enquiries aren’t followed up the real value is never captured.
This has led to the question of whether companies benefit from marketing or having a chief marketing officer (CMO) in the C-suite. A number of contradictory studies have been published, but recently a team led by Frank Germann of Notre Dame examined the question through a wider lens than ever before seeking an answer once and for all.
The study, published in the American Journal of Marketing and discussed in Harvard Business Review, investigated 155 publicly traded US companies across a broad range of industries, applying a variety of econometric models to analyse performance between 2000 and 2011.
Companies with a chief marketing office perform 15% better, on average, than companies without one
That might be enough for many of you already. But the study dug a little deeper.
It turns out that there were three organisational characteristics that make the presence of a CMO particularly important:
- Robust sales growth – high growth firms are most likely to benefit from generating and acting on customer insight provided by a CMO
- Small senior management team – the smaller the senior management team, the more influence a CMO has over strategy and direction
- Short CEO tenure – studies suggest that a CEO’s influence increases with time, so a CMO may have more impact when a CEO is new
Of course, with any study it is important to differentiate correlation and causation. Germann’s team caution that: “If firms employ a CMO, marketing is likely to play a more prominent role…and that could be the source of the performance effects.”
If you feel that your marketing spend could be used to create more value for company, but are unsure how, why not contact us today.