Will a company with a chief marketing officer perform better than a company without one? If we extrapolate from the results of Fortune 500 companies in 2015 the answer is a decisive “yes.”
As part of my research for Chief Marketing Officers at Work I created a list of all the Fortune 500 CMOs. That told me which companies had a CMO and which ones didn’t. Fortune 500 companies have to report their revenues publicly so getting that data for 2014 and 2015 was simple. From there, I asked this question to analyze the data–did companies with a CMO move up or down on the Fortune 500 from 2014 to 2015? Here’s what I found:
Fortune 500 companies with a CMO averaged a gain of 16 spots on the Fortune 500 rankings, whereas companies without a CMO averaged a gain of 8 spots. Or in other words, in 2015, Fortune 500 companies with CMOs outperformed their peer companies that do not have CMOs by 100%, in terms of spots gained on the Fortune 500 rankings.
Of course there is only so much we can gather from this data. My analysis only looks at Fortune 500 companies, it only looks at them for two years, it doesn’t take into account whether there might be someone filling the role of CMO at a company but without that title, etc. Even if I were to secure more data, there’s also the matter that correlation does not equal causation. In other words, this data and the analysis are best taken as being for entertainment value only, or are they?
In 2015 Frank Germann, of Notre Dame, and a team of researchers looked at data from 155 publicly traded U.S. firms that spanned the years 2000 to 2011. Germann’s team’s methods were quite a bit more scientific and rigorous than mine, but came to similar conclusions about the value of CMOs:
Companies with a CMO perform 15% better, on average, than companies without one.
Is it possible they could both be correct? Could it be that CMOs didn’t used to make much of a difference, but now they do? I have to wonder, based on what I was told by some of the CMOs I interviewed for my book. Many of them talked about how their jobs have become much more data-driven in recent years, and how marketing has changed from being an art to a science. Perhaps the CMO adds more value today because technology has changed the nature of the role.
If we should take my first analysis more seriously, then you may have fun with the next step in my analysis. I then asked the question “Did Fortune 500 companies with a CMO who is on Twitter perform better, worse, or effectively the same as Fortune 500 companies with CMOs who are not on Twitter?”
Fortune 500 companies whose CMOs have a Twitter account averaged gains of 19 spots on the Fortune 500 rankings, whereas companies whose CMOs do not have a presence on Twitter averaged a gain of 9 spots. Or in other words, in 2015, of the Fortune 500 companies that have CMOs, those whose CMOs have a Twitter presence outperformed their peer companies by 111%, in terms of spots gained on the Fortune 500 rankings.
Perhaps Germann’s team can take on the challenge of legitimizing this data next.Liked it? Share it!