• by Erik Sass  @eriksass1, May 31, 2006

A new breed of marketing executive is taking the reins at some of America's largest companies, accumulating institutional power and playing a larger role in strategic decisions than ever before, according to a new report released Tuesday by the Association of National Advertisers and Booz Allen Hamilton. Broadly speaking, these "growth champions" enjoy close relationships with their CEOs, aggressively pursue accountability, and aren't afraid to reach into neighboring fiefdoms that were traditionally outside their domain.

During an earlier study, according to Ed Landry, vice president at BAH, "we found that some of the marketers [studied] had a higher correlation with growth and profitability, especially when their role encompassed innovation and strategic decision-making." According to Landry, "growth champions" are "willing and able to investigate alternative marketing vehicles beyond the traditional. A lot of people are dabbling, but these people tend to be really gung ho about that stuff."

The BAH study--conducted jointly with the ANA--surveyed 2,000 executives about the structure and organization of their companies, then broke them into six broad categories according to the degree of power and organization their marketing departments enjoyed. More passive or limited marketing organizations still predominate, according to BAH--with bare-bones "service providers," for example, handling basic communications, or "best practices" shops taking a mostly consultative role.

Only 9 percent of marketing organizations or bosses fit the "growth champion" profile--but they are industry leaders, according to the BAH report: "Last year, for example, Coca-Cola Company announced that it was eliminating the position of chief marketing officer and rolling marketing, innovation, and strategic growth leadership into a single corporate function. Coke followed Pepsi, Intel, IBM, Samsung, and other pioneers in explicitly linking the marketing function and the imperative for growth."

The elevation of marketing executives to truly "strategic" positions is in large part the result of competitive pressure within mature industries, with categories such as consumer packaged goods leading the way, according to Landry. The report describes the business environment most likely to give rise to the elevation of marketing executives, "with audiences' resistance to advertising growing, the competition for customers intensifying... line extensions proliferating without a clear benefit to brands, and the costs of advertising being perceived as increasingly burdensome."

Although marketing departments might be viewed critically, top corporate leadership at the same time sees marketing as more important than ever, according to BAH--leading to the widespread shareholder discontent that is required for CEOs to make major personnel changes. "Chief marketing officers were, in the eyes of leadership, systematically underdelivering," the BAH report notes, and "CMO tenure was averaging a mere 23 months, half the average tenure of CEOs in 18 industries..."

The solution, BAH suggests, was the elevation of marketing to strategic parity with other corporate disciplines, justified by its new muscles for analyzing ROI. The Internet has provided a variety of new data streams--which, along with refinement of existing metrics, allow marketers an at least tentative grasp on basic ROI. This is the first characteristic of BAH's "growth champion": "They can identify their contributions to revenue growth, and they gain added authority from their ability to define return on investment (ROI)."

With ROI data to point to, corporate leadership then elevated marketing executives by revising corporate governance to extend their influence into corporate fields that were previously off limits--chiefly sales--while simultaneously pulling them closer into strategic planning. BAH traces the emergence of this model to the 1994 appointment of Louis Gerstner, Jr., as CEO of IBM--where he created a system in which "central marketing defines corporation-wide marketing plans and objectives; analyzes, segments, and targets markets; positions brands, and monitors and consolidates communications."

An obvious concern for media buyers is whether this aggressive new breed of marketing executive might seek to shift responsibilities for media planning and buying back into the corporate fold, taking their business with them--but Landry said that doesn't appear to be happening: "The growth champion does have very broad responsibilities over innovation and tasks that might be typical of, say, a strategy group, a planning group... but generally, all of the creative and media work is outsourced."