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Marketing Moves: H1 2020

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Marketing Moves: H1 2020 Marketing Moves: H1 2020 To better understand current trends in the appointment and turnover of marketing officers, Russell Reynolds Associates tracked and analyzed 241 notable, publicly disclosed marketing leadership moves from January to June 2020. 2 Marketing Moves Jump by 15 Percent Despite COVID-19 COVID-19 has presented ongoing challenges to marketers as massive uncertainty, economic slowdowns and public health concerns persist. The initial wave of COVID caused a number of firms to slash their marketing spend, due to live TV and outdoor advertising grinding to a halt. Across the globe, marketing teams were reduced in size, and the big question on everyone’s lips was: Where is the future of marketing heading? To our surprise, the reduction in marketing spend during COVID did not translate into a reduction in executive marketing leadership moves. In fact, between January and June 2020, we have seen an increase in marketing moves by 15 percent at the senior-most level versus the same period a year ago. KEY FINDINGS ɳ Marketers have moved jobs during this crisis. The first half of NUMBER OF MOVES YOY 2020 saw a record number of marketing moves since we started tracking job changes in 2013. In total, there were 241 publicly- 241 announced marketing executive moves, up from 214 in the 209 214 second half and 209 in the first half of 2019. Not surprisingly, this 173 pandemic has given the technology sector a boost, accounting for 27 percent of all marketing moves in the first six months of 2020, with 65 new marketers hired into technology companies. ɳ Even in a crisis, CMO appointments remain predominantly external. Seventy-five percent of publicly reported chief marketing officer appointments in H1 2020 were external hires, H2 2018 H1 2019 H2 2019 H1 2020 a slight decrease over the same period last year. However, at the height of the pandemic, between April and June this year, that Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January- number jumped to 80 percent, as more companies looked June 2020. externally for new skills to adapt to rapidly changing consumer behavior. GENDER DIVERSITY ɳ Gender diversity equilibrium tips female. Continuing the trend 56% 53% we had seen in H2 2019—where 51 percent of marketing moves 52% 51% 48% 49% 47% were female—the first half of 2020 saw 53 percent of marketing 44% appointments go to female candidates. This is a five-percentage point increase from the same period last year. H2 2018 H1 2019 H2 2019 H1 2020 Male Female Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January- June 2020. 3 GENERAL TRENDS Industry Breakdown of Marketing Moves Consumer hires in freefall: The consumer industry accounted for 41 percent of the marketing leadership turnover in the first half of 2020, an 11-percentage point decrease from the same time period in 2019, where more than half of all marketing moves came from the consumer industry. Shelter-in-place and working from home has had a significant impact on consumer companies, which has negatively impacted consumer CMO opportunities. Technology hires driving the market: Technology companies have been crucial in coronavirus responses, as they partner with retailers and first responders to help streamline supply chains and increase data and analytics processes. In turn, the technology sector saw a 9-percentage point increase in marketing appointments from H1 2019 to H1 2020, the highest by far of any sector or industry and maintaining momentum from the previous quarter. Financial services and retail need a comeback: In contrast, the number of financial services moves decreased a full 7 percentage points, and the number of retail moves decreased by 5 percentage points from H1 2019 to H1 2020. This demonstrates the increased volatility in the financial services and retail sectors over the past few months as leaders seek to adjust to the current economic downturn and systemic changes prompted by the pandemic. Leaders across these industries are trying to get their bearings and maintain their balance sheet, leaving marketing as a second- thought. We can expect that as we emerge from the crisis, and the business landscape looks brighter, that retail and financial services companies will place a refocused lens on the marketing function in this new context. INDUSTRY BREAKDOWN OF MARKETING MOVES 9% 14% 13% 14% Apparel/Retail 10% 15% 13% 14% Consumer Digital & Media 13% Consumer Products & Services 11% 12% 17% 9% Leisure & Hospitality 13% 13% 10% Financial Services 14% 9% Healthcare 12% 10% 12% 13% Industrial & Natural Resources 7% 5% 7% 2% 8% 4% Education/Nonprofit 4% 6% 4% 2% 3% 2% 3% 27% Professional Services 3% 17% 13% 18% Technology H2 2018 H1 2019 H2 2019 H1 2020 Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January-June 2020. Internal vs. External Appointments The CMO succession crisis remains a major issue for marketers across all industries, yet H1 2020 showed a slight improvement for internal candidates. While external hires are still 75 percent of all marketing placements, this is down from 80-plus percent in the previous 18 months. Due to the uncertainty permeating the market and unpredictable hiring freezes, we find more executives are looking inside their organizations for step-up candidates and high potential marketers. 4 INTERNAL VS. EXTERNAL APPOINTMENTS 17% 20% 18% 25% Internal External 83% 80% 82% 75% H2 2018 H1 2019 H2 2019 H1 2020 Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January-June 2020. As digital transformation becomes a top priority for organizations, leaders are forced to not only have front-end capabilities but also the ability to understand data, analytics, and back-end systems more fluently. With a unique perspective on customer demands and behaviors, marketers must act as the cross-functional “glue” and lead customer experience initiatives across the broader organization. This has broadened the talent pool, but additionally, it has been a key factor in the volatility of the role. EXTERNAL APPOINTMENTS BY SECTOR 100% 100% 100% 100% 94% 96% 88% 93% 92% 92% 90% 92% 88% 86% 86% 88% 83% 83% 86% 81% 79% 81% 83% 83% 77% 75% 75% 70% 72% 70% 71% 68% 67% 69% 62% 57% 56% 57% 55% 54% Apparel/ Consumer Consumer Leisure & Financial Healthcare Industrial Nonprofit/ Professional Technology Retail Digital & Products & Hospitality Services & Natural Education Services Media Services Resources H2 2018 H1 2019 H2 2019 H1 2020 Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January-June 2020. Tech hiring tech: Over the past few quarters, marketing moves in technology companies have been slightly increasing, spiking to a peak in Q1 2020. However, the industry’s CMO appointments have been almost exclusively external hires. Only about one of every 10 CMOs appointed at technology organizations in H1 2020 were promoted from within. Notably, just 19 percent of those external CMO hires came from a non-technology organization, indicating a true “revolving door” for tech CMOs. 5 Healthcare, industrial and education also staying with what they know: In general, healthcare companies have been increasingly looking for marketing leadership outside of the organization, although there has been a slight decrease in this trend over the past year. As external CMO hires have decreased year over year, the percentage of healthcare appointments from different AVERAGE # OF YEARS TO industries has also decreased drastically, down 27 percent from H1 2019. PROMOTION This demonstrates the intense strain healthcare, especially drug and 9.8 pharma, companies are experiencing as they seek to find a vaccine for 8.2 6.8 the coronavirus. These organizations are looking for marketers with 6.9 industry-specific expertise and do not have the time to and non-profit/ education sectors significantly decreased external marketing leader appointments in H1 2020, and of the external appointments, a strong majority of appointments came from the same industry. H2 2018 H1 2019 H2 2019 H1 2020 As far as internal appointments, the average tenure within an Source: Russell Reynolds Associates' analysis of marketing executive job changes (n=241), January- organization prior to promotion to the CMO role decreased compared June 2020. to the previous six months. Across all industries, the average internally appointed CMO in H1 2020 had spent 6.9 years at their company. This is down from 8.2 years in the second half of 2019 and 9.8 years in the second half of 2018, though on par with the 6.8- year average for H1 2019. Gender Balance In the first six months of 2020, appointments of female marketing executives increased 5 percentage points from the same time period in the previous year – continuing to tip the scale towards female marketing leaders. Industrial & natural resources are laggards in gender diversity: Even though the gender balance is skewing female overall, there are still some industries that are less balanced than others. Healthcare companies showed impressive growth in female marketing hires, with women comprising 64 percent of CMO appointments during the first six months of 2020 – up from 36 percent in the second half of 2019. Non-profit and consumer have been steadily increasing in gender diverse appointments since the first half of 2019. Additionally, industrial & natural resources companies have made impressive progress since the second half of 2018, when all of their appointments were male. However, there was significant drop of female appointments in the first half of 2020 (17 percentage points) with men being appointed 61 percent of the time. This volatility is often a response to investor pressure and can demonstrate more of a tick-the-box approach than a long-term, integrated strategy.
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