Marketing Moves 2016: Q3 – Q4
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Trends and Moves Marketing Moves 2016: Q3 – Q4 2 Marketing Turnover Continues to Increase; Approaching Gender Parity in CMO Appointments To better understand current trends in the appointment and turnover of marketing officers, Russell Reynolds Associates tracked and analyzed 177 notable, publicly-disclosed marketing-leadership moves in the second half of 2016. KEY FINDINGS ɳ Record turnover continues. The year 2016 saw the highest level of marketing-leader appointments and turnover since Russell Reynolds Associates began comprehensively tracking all major appointments four years ago. 177 marketing-leader appointments were recorded in Q3-Q4, after 173 in Q1-Q2. This compares to 134 and 147 in the same periods of 2015, respectively. ɳ Gender diversity takes a leap. A record 47 percent of marketing-leadership appointments were women during Q3-Q4 2016. Women have typically accounted for 40 percent of these appointments in the past. ɳ External hires continue to increase. The majority of publicly reported chief marketing officer appointments continues to be external hires. The final two quarters of 2016 saw the highest proportion yet, at 74 percent. Healthcare companies exhibited the greatest tendency to recruit an external marketing leader, in 90 percent of appointments, followed by technology companies, at 88 percent. ɳ Outsiders in healthcare and industrial. Both continued a strong and persistent trend of appointing marketing leaders from outside their respective industry, with 78 percent and 67 percent, respectively, of their marketing- leader appointments pulling talent from outside the industry in Q3-Q4. The consumer industry provided the highest number of cross-industry hires into the healthcare industry, at 57 percent. ɳ Insiders elsewhere. The consumer and technology industries maintained their trend of appointing marketing leaders from within their respective industries. In addition, financial services reversed its long-standing trend of hiring industry outsiders in Q3-Q4, with 77 percent of its marketing appointments coming from inside the industry. ɳ Retail turnover slows, but still volatile. Among the top 30 US-based retailers by revenue, 33 percent have turned over their marketing leader in the last 12 months, down from 48 percent from July 2015 to June 2016. Retail accounted for 10 percent of all marketing moves in the past six months. ɳ Marketers gaining a seat at the table. Sixty-one percent of appointments report to the company CEO and, in turn, are a part of the executive committee. ɳ Internal promotions less common than external. Of the marketing leaders who left their role in Q3-Q4 2015, only 9 percent were internally promoted. Of those who left their company, 36 percent were “externally promoted” to a higher position at a new company. GENERAL TRENDS Industry Breakdown of Marketing Moves The consumer industry as a whole accounted for just under half – 49 percent – of the marketing-leadership turnover in the final six months of 2016, down from the 53 percent in the first half of the year. Within the retail sector, volatility among marketers slowed, down from 16 percent of all marketing moves in the first half to 10 percent in the second half. For the remainder of the sectors within consumer, 19 percent of marketing moves in Q3-Q4 were made by consumer digital and media companies, 9 percent took place within consumer products and services, and 11 percent were within leisure and hospitality. 3 INDUSTRY BREAKDOWN BY SECTOR 13.9% Consumer Digital and Media 18.6% 18.4% 14.9% 13.3% Consumer Products and Services Consumer 9.0% 11.6% 13.4% 48.6% Leisure and Hospitality 9.8% 11.3% 12.9% 19.4% Retail 9.6% 15.6% Financial Services 11.6% 9.0% 10.2% Healthcare 12.7% 5.6% 11.6% 10.4% Industrial and Natural Resources 6.0% 4.6% 2.7% 3.0% 2.9% 3.4% 4.5% 2.7% 4.0% 3.5% 9.0% Education/Nonprofit 5.8% 4.1% 0.7% 0.7% Professional Services 21.5% 17.9% 21.1% 19.4% Technology Q3-Q4 2016 Q1-Q2 2016 Q3-Q4 2015 Q1-Q2 2015 Internal vs. External Hires As has been the case for the last few years, the second half of 2016 saw companies looking externally for their marketing executives significantly more often (74 percent of the time) than they did in the first half (64 percent). In 2015, the second half saw an approximate increase of 9 percentage points over the first (72 percent versus 63 percent), and similar differentials occurred in 2014 and 2013, when RRA first began tracking these marketing- leadership changes. TYPE OF APPOINTMENTS: LAST TWO YEARS 6.8% 8.0% 6.8% 11.9% Open/Eliminated 19.7% 20.4% Internal 27.6% 24.6% External 73.6% 64.4% 72.8% 63.4% Q3-Q4 2016 Q1-Q2 2016 Q3-Q4 2015 Q1-Q2 2015 Healthcare and technology companies demonstrated a major aversion to the internal promotion of marketing talent, with 90 percent and 88 percent of their appointments being external, respectively. The financial services industry was not far behind, as companies have also shown a tendency to hire marketing leadership from outside their respective organizations (83 percent). 4 For internal appointments, the average tenure with the company prior to promotion was 6.27 years across all industries, a decrease from 9.88 years in the first half of the year, yet down only slightly from the 6.83 years of experience prior to promotion seen in the second half of 2015. Inside of Industry vs. Outside of Industry External technology and consumer appointments have maintained a trend of being largely from within the same industry (60 percent and 83 percent, respectively, in Q3-Q4 2016). There was some movement toward a 50-50 split in technology appointments during latter half of 2016, down from 79 percent in Q3-Q4 2015, but intra-industry moves still outweighed inter-industry. In contrast, consumer appointments have remained just over 80 percent intra- industry over the past 2 years. INTRA- VS. INTER-INDUSTRY MARKETING APPOINTMENTS (% refers to share of hires that came from within the same industry) 88% 84% 83% 77% 79% 72% 70% 67% 61% 60% 50% 50% 40% 38% 40% 40% 30% 33% 33% 33% 33% 22% 20% 17% 0% 0% 0% 0% Consumer Financial Healthcare Industrial Education Professional Technology Services and Natural and Nonprofit Services Resources Q1-Q2 2015 Q3-Q4 2015 Q1-Q2 2016 Q3-Q4 2016 Unsurprisingly, almost all other industries poached marketing talent from other industries in Q3-Q4, as has been the case for a while now. The industrial and natural resources industry stayed flat, at 33 percent intra-industry hiring, while healthcare dropped to 22 percent, from 33 percent in the same time period of 2015. There was one surprise, however: As noted above, just 23 percent of financial services marketing hires came from outside the industry; this was a complete reversal from the data of any prior time period. CONSUMER BREAKDOWN BY SECTOR (% refers to share of hires that came from within the same sector) 65% 67% 43% 73% Same Diff Same Diff Same Diff Same Diff Consumer Consumer Leisure & Retail Digital and Media Products Group Hospitality 5 Within consumer, three of the four sectors had a similar majority of appointments from within their respective sector. However, companies within the leisure and hospitality space tended to look to other sectors for marketing leadership more often than they did to their own. While there was no sector that stood out among these leisure and hospitality appointments, we note that non-consumer sectors accounted for exactly half. Where Do Chief Marketing Officers Go? To gain additional insights into marketing officers’ career paths, we analyzed the movements of marketing leaders who left their roles in Q1 or Q2 of 2016. Of those transitioning marketing leaders, approximately 9 percent were internally promoted, down from 23 percent in the previous six months.1 Over 60 percent left their company for a new opportunity. The remainder either retired (4 percent) or have not yet taken on a new role or not yet made their new employment public (24 percent). Outgoing marketing officers 63% 9% 4% 24% left to pursue a new were internally promoted to a retired undisclosed or have opportunity role such as president, chief not taken on a new customer officer, chief digital role officer, chief strategy officer, or chief executive officer 52% 48% 54% 20% 16% 10% same different marketing operating role other role (incl. work as industry industry leadership (GM, MD, chief growth, independent role President digital, customer consultants CEO) and strategy officer Of those who left to pursue a new opportunity, 52 percent stayed in the same industry, while 48 percent moved to a different industry. Of this same group of executives, 54 percent took on a marketing leadership role, 36 percent were externally promoted and 10 percent went to work as independent consultants. 1 One likely reason for this unusual drop was the large number of marketing moves labeled “undisclosed.” 6 CONSUMER SECTOR CONSUMER DIGITAL AND MEDIA 20th Century Fox Film has appointed Pam Levine as president, worldwide theatrical marketing. Levine was most recently chief marketing officer at HBO. The company has appointedBeth Goss as chief brand officer. Goss is responsible for managing and crafting opportunities for fan engagement around the Fox Film brands, including current releases, library titles and projects in development. She was most recently founding partner at 8.Eight Entertainment. A+E Networks has appointed Amanda Hill as chief marketing officer. Hill is responsible for managing marketing for A+E Networks’ portfolio of brands and businesses in the US, including brand strategy, consumer and business-to- business marketing and all creative executions.