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Research Insights: Special ‘Value of Marketing’ Edition

Marketing News Staff

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Highlights from the AMA journals—and what the findings mean for practitioners

Understanding the Marketing Department’s Influence Within the Firm

By Peter C. Verhoef and Peter S.H. Leeflang

Appeared in Journal of Marketing, 73 (March 2009)

In a nutshell: This study investigates the influence of the marketing department and assesses its determinants and consequences.

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Practitioner takeaways: The authors suggest a dual relationship between the marketing department’s influence and market orientation. A marketing department’s influence is related positively to market orientation, which in turn is related positively to firm performance. How can a marketing department be more influential? The accountability and innovativeness of the marketing department are the two major drivers of influence.


The Chief Marketing Officer Matters!

By Frank Germann, Peter Ebbes and Rajdeep Grewal

Appeared in Journal of Marketing, 79 (May 2015)

In a nutshell: Skeptics from marketing academia and practice alike are unconvinced about the CMO’s performance implications in terms of firm outcomes. The authors set out to address these skeptics: Using data from 155 publicly traded firms over a 12-year period (2000–2011), they find that firms can indeed expect to benefit financially from having a CMO at the strategy table.

Practitioner takeaways: The authors conclude that firms benefit from having a CMO among the top management team. Conservatively, the data and analyses suggest that Tobin’s q of firms that employ a CMO is approximately 15% larger than that of firms that do not employ a CMO, and CMO presence has a positive impact on excess stock returns.


Marketing Department Power and Firm Performance

By Hui Feng, Neil A. Morgan and Lopo L. Rego

Appeared in Journal of Marketing, 79 (September 2015)

In a nutshell: Using a new objective measure of marketing department power and a cross-industry sample of 612 public firms in the U.S. from 1993-2008, this study shows that, in general, marketing department power increased during this time period. This finding matters because the authors also show that a powerful marketing department enhances firms’ longer-term future total shareholder returns beyond its positive effect on firms’ short-term return on assets.

Practitioner takeaways: Senior managers should value a powerful marketing department because it contributes to a firm’s short-term profitability and longer-term shareholder value (even beyond its effect through marketing capabilities).


When Do Chief Marketing Officers Affect Firm Value? A Customer Power Explanation

By D. Eric Boyd, Rajesh K. Chandy and Marcus Cunha Jr.

Appeared in Journal of Marketing Research, 47 (December 2010)

In a nutshell: Which kinds of firms benefit most from having a CMO? This research identifies a few firm characteristics signifying that a CMO is a good fit.

Practitioner takeaways: In general, firms should consider appointing a CMO when customer power is low. If a firm faces considerable customer power, a CMO with the right background and experience can still help; role-specific experience is most important in this case. Moreover, CMOs will be more successful in firms with a larger scope and size and greater past performance. Recruiters should investigate the experiences of prospective CMOs when they consider whom to pick for the job, and CMO candidates should carefully assess the level of discretion that would be available to them before they plunge into a new CMO job.


When and How Board Members with Marketing Experience Facilitate Firm Growth

By Kimberly A. Whitler, Ryan Krause and Donald R. Lehmann

Appeared in Journal of Marketing, 82 (September 2018)

In a nutshell: Boards with members who have deep marketing experience are better positioned to make growth a firm-wide priority and to increase the effectiveness of revenue growth strategies. The authors’ data shows that firm re​​​venues increased by 5.8 percentage points annually when a marketer is on the board.

Practitioner takeaways: The theorizing and analyses can help CMOs better understand how those above them affect their ability to deliver results. This research illuminates the value of having marketing-experienced board members and should motivate CMOs to inspect board composition and other factors that will enable them to exercise their skill sets and wield influence before they accept a CMO position.