Why CEOs Still Don't Get Modern Marketing

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Introduction

# The marketing C-suite is in crisis. Only 66% of Fortune 500 companies had a CMO last year, down from 71% the previous year. Marketing budgets have shrunk to just 7.7% of revenue, and only 31% of CMOs believe their CEOs understand their marketing strategy. Kathryn Rathje, Partner at McKinsey & Company, reveals why this disco ect exists and how marketing leaders can rebuild credibility by thinking like investors and aligning metrics with business outcomes.#n#n1

The Fragmentation Problem

# Marketing's complexity has led to a proliferation of C-suite roles - Chief Digital Officers, Chief Data Officers, Chief Growth Officers, and Chief Revenue Officers now share responsibilities that once belonged solely to the CMO. As Rathje explains, "When everybody owns the customer, nobody owns the customer." This fragmentation creates accountability gaps despite research showing that companies with a single executive accountable for customer experience grow at 2x the rate of their peers.#n#n1 The disco ect stems partly from perception. While 65% of CEOs claim they deeply understand modern marketing, 70% of CMOs disagree. This gap exists because marketing is uniquely vulnerable to what Rathje calls the "Monday morning marketer" phenomenon - everyone feels qualified to critique marketing because they experience it as consumers, yet no one emails the CFO about accounting strategies.#n#n1

Aligning Success Metrics

# The fundamental issue lies in misaligned definitions of success. Only 30% of CMOs say their organization has a clear definition of marketing ROI. When asked about success metrics, 70% of CEOs prioritize year-over-year margin and revenue growth, while only 35% of CMOs include these in their top KPIs. This disco ect creates a situation where marketing and executive leadership literally speak different languages about value creation.#n#n1

Building the CFO Partnership

# Rathje emphasizes that fixing this alignment requires more than CEO-CMO conversations: "The best thing you can do as a CMO is go make best friends with the CFO." This partnership transforms marketing from a cost center into an investment for growth. The goal is creating what she calls an "aligned little trifecta" of CEO, CFO, and CMO working from the same playbook.#n#n1

Measuring What Matters

# Modern marketing measurement has evolved beyond the "50% of my marketing works, I just don't know which 50%" dilemma. Today's tools enable tracking of both short-term performance and long-term brand building. Rathje advocates for full-fu el marketing tests that measure the interco ected impact of brand spending on downstream metrics over 2-6 month periods, providing concrete proof of marketing's business impact.#n#n1 The key is avoiding what she calls "alphabet soup" metrics (LTV, CAC, CPC) in favor of business-aligned measurements. Marketing leaders must understand whether their company is in "margin harvesting mode" or "growth mode" and adjust their metrics accordingly. This requires creating a single-page view of how marketing metrics relate to each other across different time horizons and co ect to CEO priorities.#n#n1

Avoiding Shiny Object Syndrome

# The most common mistake Rathje sees is "shiny object syndrome" - piloting countless vendors and AI solutions without a coherent strategy. She notes that "everybody's calling everything AI, whether or not it's actually AI," creating distraction from fundamental marketing workflow improvements. Success requires a clear vision of marketing's future state while making strategic choices between reversible "two-way doors" and permanent "one-way doors."#n#n1

Conclusion

# The path forward for marketing leadership requires CMOs to act as integrators across the C-suite, bringing customer insights to every function while speaking the language of business outcomes. By aligning metrics with CEO priorities, partnering closely with CFOs, and focusing on measurable value creation rather than tactical metrics, marketing leaders can reclaim their seat at the executive table. As companies that maintain unified customer leadership grow at twice the rate of their fragmented peers, the business case for empowered CMOs remains compelling - if they can prove their worth in terms the C-suite understands.#n#n1