Research by the Harvard Business Review reveals senior marketing executives have suffered a significant decline in pay rates over the last 20 or so years – and the reason could all be down to IT.
The Review looked at pay rates of top executives at S&P 1500 firms and noted the five most highly paid positions between 1999 and 2017. A steady decline in the number of CMOs showing up was discovered – a fall of around 35% over the timespan.
By contrast, the number of those senior leaders in the fields of information or technology in the list of most highly paid now far exceeds the number of CMOs. As pay generally reflects importance and seniority in an organisation, the conclusion is that the CMO’s seniority has fallen.
Does this suggest the traditional function of marketing has also declined in importance? The Review believes so.
It offers a number of explanations. One is that the nature of marketing has fundamentally changed, with consumers now spending far more of their income on software-based services that are created and distributed over the internet.
“They also get more information about products and services from online sources — bloggers, online reviews, influencers — than from watching advertisements,” says the Review.
“Advertisements themselves are now instantaneously placed in browsers based on customer data.”
The result is that IT plays an increasingly important role in marketing and so raises the importance of those who regard marketing from a tech viewpoint. On the other hand, anyone in marketing who doesn’t get astride of the latest tech developments will struggle to maintain the importance of their role.
“One could even argue that marketing is getting merged into the IT function or outsourced to companies such as Google Marketing Platform,” the Review says.
Another possibility is that companies are increasingly growing through acquisition instead of developing organically – this raises the CFO’s role in the company hierarchy at the expense of the CMO, who is more focused on organic growth.
Whatever the definitive reason for the decline in importance of the CMO within the organizational hierarchy and the rise of Chief Technology Officers, the Review argues that “Perhaps it’s time to stop considering marketing and technology as two isolated departments and encourage closer collaborations between them”.
Sourced from Harvard Business Review; additional content by WARC staff