July 2007 - Marketing Methods

Direct Response Marketing Can Solve CMO Woes

By Peter Koeppel

Amazingly, the average tenure for a chief marketing officer (CMO) is now a mere 23 months, according to a recent study by executive search firm Spencer Stuart and reported in BtoB magazine. The report also found that while nearly three-quarters of CEOs and board members consider their marketing departments “highly influential and strategic” in the enterprise, nearly two-thirds say that their top marketers don’t provide adequate ROI to gauge marketing’s true performance.

Another recent survey reported that only seven percent of senior-level financial executives are satisfied with their company’s ability to measure ROI. Revenue magazine’s Marketing Management Analytics and Financial Executives International Survey revealed that less than 10 percent of these executives indicated that their company had a separate budget allocated for measuring marketing effectiveness.

“I worry about what will happen to the future of marketing leadership because of the turmoil-the short life span [in CMO tenure], the pressure and the high expectations,” says Spencer Stuart’s Greg Welch. The steady stream of departures among high-profile senior marketing executives is evidence of this “turmoil.” Just this year, Macy’s CMO, AT&T’s CMO, Verizon’s VP of marketing and the CMO at Wachovia all left their positions.

The mounting pressure on CMOs, combined with corporate executives’ growing dissatisfaction with the lack of measurement of ROI, creates the perfect opportunity for more companies to adopt direct response marketing initiatives. This also represents a terrific opportunity for our industry to step in and help these companies develop such programs. Since the direct response marketing model is all about measuring ROI, it seems like more of these marketing executives will now be open to testing direct response advertising.

Of course, many CMOs outside of the direct response industry are doing a good job. The BtoB article notes that Martin Etherington, VP-marketing at Tektronix, claims that his department is 100 percent accountable and measurable, and that it aligns its metrics with the strategic objectives of the company. However, it appears this level of measurement and accountability is not yet widespread, judging from the high turnover and the survey feedback.

As a direct marketer who lives in a world of total accountability, the need for better ways to measure ROI seems like a relatively easy problem to address. However, many of the Fortune 1000 marketers work with mega ad agencies that are slow to move away from traditional brand marketing and adopt the principles we hold near and dear. Perhaps the increasing pressure on CMOs will force them to take a more serious look at the power and accountability of direct response marketing.

Peter Koeppel is president of Koeppel Direct Inc., a full-service media buying agency based in Dallas. He can be reached at (972) 732-6110, or via e-mail at [email protected].


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