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Stock Market Values CMO in Top Management Team

Stock Market Values CMO in Top Management Team

Matt Weingarden

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Scholarly Insights: AMA’s digest of the latest findings from marketing’s top researchers.

Recent trends in the popular press have suggested Chief Marketing Officer (CMO) presence in the top management team may be a thing of the past (e.g., “The CMO Is Dead,” Forbes ). These news stories fuel the marginalization of the CMO role, but their presumptions are often based on outdated research or myopic forms of measurement. Given the negative hype, marketers will be relieved to learn of new research from marketing’s top scholarly journal showing the tangible financial value that CMOs bring to their companies.

In “The Chief Marketing Officer Matters!​,” published in the May 2015 issue of Journal of Marketing, authors Frank Germann, Peter Ebbes, and Rajdeep Grewal explain that firms in fact do show measurable benefit from having a CMO. With over 12 years of data in their samples, as well as unprecedented diversity in both the number and types of companies examined, the authors find “that Tobin’s q of firms that employ a CMO is approximately 15% larger than that of firms that do not employ a CMO.”*

Critically, the authors also argue that the benefits of CMO presence in the top management team should not be assessed through accounting-based measures such as sale’s growth. Instead, Tobin’s q, a capital market-based measure of firm performance, captures a broader valuation of CMO presence, one that incorporates elements of risk and other firm variables with which CMO presence interacts. “In brief, Tobin’s q seems to be improved by CMO presence in the TMT for (1) firms with relatively higher sales growth, (2) firms that are relatively smaller, and (3) firms whose CEO has relatively shorter tenure.”


The difficulty of measuring returns generated from CMO presence has created a lot of churn in the profession and uncertainty among top management. “The average tenure of a CMO is estimated to be two years, compared with five years for CEOs.” While it is perhaps easier to argue that CMO presence will ensure that customers’ voices are brought to bear on a firm’s strategic thinking, Germann, Ebbes, and Grewal’s timely work also indicates clear financial implications as well: the stock market will reward firms with CMOs! 

These encouraging results should help CMOs “bolster clout at the strategy table.” Marketers may also draw on these findings when arguing for CMOs to serve in top-tier decision-making positions as opposed to relegating the marketing function under some other leadership group.

Article Citation:

Frank Germann, Peter Ebbes, and Rajdeep Grewal (2015), “The Chief Marketing Officer Matters!​” Journal of Marketing, Vol. 79, No. 3 (May), pp. 1-22.

*Tobin’s q is a commonly used ratio between a firm’s stock market valuation and the replacement value of the firm’s assets. If Tobin’s q is greater than 1, the firm’s market valuation is greater than the actual value of its assets.

Author Bio:

Matt Weingarden is the Community Content Senior Manager for the American Marketing Association. You can reach him at

Matt Weingarden, Vice President, Communities & Journals, leads the diverse team that supports the AMA’s network of community leaders from its three broad communities and four scholarly journals.