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Digital Marketing Performance Increasingly Affects CMO Compensation [Study]

  |  August 1, 2014   |  Comments

The Chief Marketing Officer Council’s new CMO Compensation Report suggests that CMO base compensation tends to increase as a company’s digital marketing performance improves. More than one-third of CMOs who earn $350,000 a year or more responded that their digital marketing performance is "excellent."

As digital performance becomes increasingly important to companies, chief marketing officers (CMOs) earning the highest level of base compensation are required to develop exceptional digital marketing skills in order to drive business performance, according to the Chief Marketing Officer Council.

In its newly released CMO Compensation Report, the CMO Council analyzed responses from 345 senior-level marketers from companies all around the world. It found that most CMOs earn a base compensation between $100,000 and $350,000 per year, and their base compensation is likely to increase as their firm's digital marketing performance improves.

"The data shows a relationship between the amount of money you make, and your ability to manage digital," says Dr. Kimberly A. Whitler, author of the report. "It makes sense because more and more companies today are looking for CMOs who can steward digital operations within their firm. And those who have demonstrated they can manage digital are going to be worth more in the marketplace."

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                                                 Image Credit: CMO Council

CMOs who earn a base compensation of more than $500,000 annually focus on driving business performance, including effectively launching new products, growing or obtaining market share, as well as driving top-line growth, says the report. But the highest paid CMOs also help their companies build digital capabilities and improve the yield of their marketing strategy. In fact, 36.9 percent of CMOs surveyed who earn more than $350,000 per year responded that their digital marketing performance is excellent.

Interestingly, the report reveals that CMOs in B2C companies receive a higher base compensation than their B2B or hybrid-company counterparts.

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                                                    Image Credit: CMO Council

Commenting on the findings, Dr. Whitler explains that CMO compensation is based on many factors. For example, CMOs receive base compensation as well as bonuses (85 percent of CMOs from large companies surveyed receive bonuses). And some of them may earn commission and long-term equity.

At the base compensation level, B2C CMOs surveyed earn more than CMOs in B2B or hybrid companies. But if you look at other compensation components, B2B CMOs in the study are more likely to receive bonuses, the most common type of compensation beyond base salary.

"It looks like B2B CMOs tend to be compensated on their short-term performance, while B2C CMOs are likely to receive long-term compensation like long-term equity," Dr. Whitler notes.

According to her, this could be because CMOs in B2C companies focus on innovation and brand building, which can take a long time to deliver results. In comparison, their B2B counterparts focus on driving their company's revenue on a yearly basis.

The report also shows that CMO compensation relates to reporting structure. CMOs who make more than $500,000 annually report directly to chief executives (CEOs) while also working closely with chief information officers (CIOs) and chief financial officers (CFOs).

To learn more, request the full report from the CMO Council.

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ABOUT THE AUTHOR

Yuyu Chen

Yuyu Chen is a junior reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.

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