MKTG 556 | Session 3 | The Chief Marketing Officer Matters! - 2015

Frank Germann, Peter Ebbes, & Rajdeep Grewal

Introduction:

Marketing academics and practitioners alike remain unconvinced about the chief marketing officer's (CMO's) performance implications. While some studies suggest that firms financially benefit from having a CMO in the C-suite, others find that the CMO has little or no impact on firm performance. As a result, there have been strong calls for additional academic research on the CMO's performance implications. In response, the authors use various model specifications with different identifying assumptions (such as rich data models, unobserved effects models, instrumental variable models, and panel internal instruments models) and data from up to 155 publicly traded firms over a 12-year span (2000–2011). They find that firms can indeed expect to benefit financially from having a CMO at the strategy table. Specifically, their results show that the performance (measured in terms of Tobin's q) of firms with a CMO is, on average, approximately 15% higher than that of firms without a CMO. This outcome remains consistent across different model specifications. Given the ongoing uncertainty about the CMO's performance implications, these findings should pique the interest of marketing academics and practitioners. Additionally, the study enhances the methodology literature by consolidating diverse empirical model specifications—used to assess causal effects with observational data—into a clear and comprehensive framework.