Chief Growth Officer 2019: The state of the CGO

CGOs are growth catalysts.

The rise of the chief growth officer is a clear signal of the value that companies place on accelerating profitable growth. Increasingly, we’re seeing the rise of marketing science, and the use of a marketing intelligence platform to enable it.

Driving that change is a growth leader, often a CGO. And based on our survey of 700 marketers at companies with over $151 billion in combined annual sales, brands are getting significant return on their CGO investments.

How?

CGO-led companies:

• Play in mobile-focused and tech-heavy verticals
• Have almost 2X larger marketing teams
• Spend more on advertising
• Demand granular customer-level marketing data

In addition, they are:

• 36% more likely to prioritize new skills training
• 65% more likely to be investing in new marketing tech
• 48% more likely to be building AI and machine learning driven tools for marketing

Massive technological change, accelerating business timetables, and an increased focus on marketing delivering growth have made it critical for brands to give the CMO help. Sometimes that’s a marketing technologist. Sometimes that’s a CRO who can expand beyond sales.

Increasingly, it’s a Chief Growth Officer.

We’re all familiar with CMOs, who lead marketing and brand, and are increasingly driving digital transformation in established companies as well as growth in young companies. But the chief growth officer is a relatively new phenomenon.

Why?

With massive technological change, huge digital transformation efforts, and short tenures, it’s becoming clear that the CMO needs help.

Sometimes, that comes from a Chief Digital Officer. Occasionally it’s via a chief marketing technologist.

But increasingly over the past few years, we’re seeing that help for the CMO in delivering growth via largely digital channels is coming to be owned by the Chief Growth Officer. In fact, interest in the term “chief growth officer” has doubled from four or five years ago, with an inflection point in early 2017:

And a search for “chief growth officer” on LinkedIn now returns over 900,000 results, plus 2,830 open jobs:

That’s a significant uptick. On a global scale though, the CGO is still a rare species. In fact, only 14% of the 700 companies we studied currently have a CGO on staff. (More, of course, are likely to have VPs and Directors of Growth, or similar titles.)

That seems to be increasing, however, and it’s important to remember that many CGO-type roles are led by people with VP and SVP-level titles: SVP of Growth, Head of Digital Marketing, VP Acquisition Marketing, VP of Performance Marketing, and so on.

In fact, 29% of companies have a VP, director, or head of growth, and 41% have a growth marketing manager. Over time, some of these high-level roles will likely transition into a CGO role.

Our goal in this report is to understand what a CGO does, and how having a CGO changes a brand or enterprise.

It’s probably easiest to define a CGO in context of a CMO.

A chief growth officer is a growth catalyst.

Where a CMO leads all marketing initiatives for a company, a chief growth officer catalyzes growth. A CGO leads growth with an emphasis on performance marketing, and a heavy reliance on marketing technology. And a CGO is tasked with a cross-functional role: building growth into product, service, and support as well as marketing.

“CGOs are valuable because they are committed to disrupting the status quo.”

– Vista Equity Partners [1]

That means working with the CMO — and often reporting to the CMO — but also with the CRO. The CGO doesn’t typically run sales, but does work closely with sales to ensure they have the tools and processes necessary to succeed. In some cases, CGOs may directly to the CEO with a combination of sales, marketing, product and operations as reports.

Interestingly, CGOs are often found in tech-heavy companies. That might be one reason why, according to Google Trends, they’re particularly common in California and New York.

There’s probably no one better to say what a CGO does … than a CGO.

Summing up what a number of chief growth officers have told us, it’s primarily three things: a role for companies that want to grow fast, need a leader to spearhead that growth, and are willing to bridge different departments, roles, and groups in the singular pursuit of growth.

In smaller companies, pieces of this role might be given to a CMO or a CRO.

The larger the company, the more the roles diverge, according to Peter Lalonde, a former CMO, CRO, and CEO, and current venture capitalist with Positive Venture Group. But a key difference between the CGO and CMO roles is in how the CGO bridges multiple departments to impact growth.

Critically, that includes product design and experience.

Matt Fitzgerald, CGO, Buchanan Group (Home Tester Club)
“The CGO role is a hybrid role designed to work across departments, with a focus on sales, marketing, and product … the fastest growing area of our business is a tech platform called HomeTesterClub.com … in a fast-moving space, it was important to have a position that could work cross-functionally to help departments work together as efficiently as possible, to ensure we’re innovating, communicating and executing on clients’ equally fast-changing needs, and driving tangible growth across the business.”

Chris Renton, CGO, SnapPay
“Traditional functional silos can slow a company down while they gather consensus amongst respective leads. For companies that are growing extremely fast, the CGO focuses on short, medium and long term strategic initiatives, partnerships, products, marketing, and sales to drive growth.”

Ajay Thakur, CGO, Stackraft
“The terms ‘growth’ or ‘growth hack’ are getting abused by startups that want to grow fast inorganically with no product market fit … the growth role isn’t a magic hack to boost business performance overnight, but a disciplinary and cross-functional role which requires both art and science to identify the most efficient growth channel for the company, implementing hooks within product design, features & overall taking data-informed approach …”

“… growth is a practice to bridge the gap between product, marketing, sales, and enforcing efficient data-driven execution methodology where different teams are optimizing for higher ROI against time and capital investment.”

“My primary focus as Chief Product & Growth Officer is to make sure every initiative we take in the product and community adds value to our primary growth goal.”

What defines a CGO-led company?

Overall, they’re more focused on digital, they’re more mobile, they have larger teams, and they have larger budgets. The data suggests that companies with a CGO are more likely to be using tools to unify their data and generate intelligent insights from it for growth.

Apps are critical
CGO-led organizations are 30% more likely to have an app critical for delivering customer value or generating revenue than organizations without a CGO. Mobile apps are revenue generators and customer value creators for 77.2% of organizations that have a CGO.

For organizations that don’t have a CGO, that number drops to 59.3%.

Larger teams
CGOs tend to work for companies that have larger marketing teams.

The average marketing team size for a company with a CGO, among those we surveyed, is 27 people. That compares to just 16 at companies without a CGO. In addition, companies with a CGO were 2.4 times more likely to have a marketing team of more than 50.

In contrast, very small marketing teams almost never have CGOs.

Less than 3% of marketing teams with five or fewer people have a CGO. That makes sense: they probably don’t have a CMO either. But from 31 to 40 people, 25% of marketing teams have a CGO.

And over 50, that number jumps to 31%.

Larger budgets
CGO-led organizations tend to have larger marketing budgets.

But there’s an interesting double peak in the data: brands with $5-10 million in annual ad spend have CGOs 21.3% of the time. And companies with over $50 million in annual ad spend have a CGO on-staff just a little more: 21.4% of the time.

Smaller companies spending less than $5 million a year in advertising have CGOs just 11.1% of the time, while companies that spend between $5 and $50 million annually have a CGO 15.6-17.7% of the time.

More fraud-aware
Organizations with CGOs were 35% more likely to list detecting and preventing fraud as a challenge. In fact, fraud was one of their top challenges. 43.6% of marketing teams with a CGO said fraud was critical solve versus 32.4% of those without a CGO.

This makes sense.

They run bigger marketing teams and they also have bigger budgets,. Therefore, they have more exposure to fraud. There’s one other likely reason: CGO-led organizations tend to be more performance-driven, and that kind of marketing is a tempting target for fraudsters.

Focused on granular data
CGO-led marketing organizations’ top desire is the ability to connect user-level data with aggregate spending data. 56.4% of brands with CGOs selected this as a top need, while companies without CGOs say their top need is to spend less time exporting data into Excel for analysis.

Why is that important?

Granularity drives optimization. When you know precisely what’s creating both desirable and undesirable results in your marketing campaigns, you know what to tweak, test, and improve.

In addition, CGO-led organizations’ second most-desired capability is better granularity into publishers and/or creative performance (52.8%). That, obviously, is critical to accurate understanding of ad performance and customer acquisition costs.

Focused on AI and automation
CGO-driven companies were 24% more likely to list AI/machine learning insights that would drive ROI as a key desire, and 11% more likely to request better granularity into publishers and creative performance.

In contrast, CGO-led mobile marketers were 17% less likely to list spending less time in Excel as a key need, and 11% less like to request the ability to connect siloed data. Why? Because they’re already using sophisticated growth stacks — like a Marketing Intelligence Platform — to aggregate and analyze their data … and then optimize for growth.

Looking forward, companies with CGOs plan to do more of almost every activity that we studied than their non-CGO counterparts.

More new skills training
All marketers know that with new technology, new platforms, and new channels, ongoing training is essential. But CGO-led organizations are particularly focused on developing new skills via training.

While 43.7% of non-CGO companies said that they were planning to invest additional marketing budget in new skills training, 59.4% of those who had a CGO planned to double down on skill development.

Much more marketing technology investment
Martech investment is the most clearly differentiating area between CGO-led brands and companies without a chief growth officer.

CGO-led companies are 65% more likely to be investing in new marketing technology tools in the coming year than non-CGO companies. That’s massive.

That’s significant, because as marketing becomes more digital, it’s increasingly obvious that those with the best tools generating the best insights for growth achieve the highest levels of growth.

Only 28.2% of marketing teams that do not have a CGO are looking to add to their tech stack. But 46.5% of those with a CGO are planning to add new tools in the coming year.

Significantly more AI and machine learning investment
CGOs are investing in new marketing technology, and that includes AI and machine learning tools to help them target, reach, understand, and react to customers better.

Many marketers are keen to add AI to their bag of tricks, with 30.7% of companies that do not have a CGO saying they’re adding AI and ML in the coming year. But 45.5% of CGO-led brands are planning to invest in AI — and very likely, the rest already have.

More events, more people, and more digital ads
CGO-led companies are 17% more likely to be increasing their digital advertising in the coming year. They’re 25% more likely to be growing their already-larger teams and adding marketing headcount.

But they’re not forgetting offline, face-to-face, and high-fidelity real time events. CGO-led organizations are also 21% more likely to be planning more meet and greet events.

Summing it all up, organizations with CGOs appear to be on a path toward what Forrester calls “analytics mastery.”

CGO-led organizations are investing in marketing technology, including analytics tools, at significantly higher rates than other companies. And that has significant impact.

Think 3X impact.

The “mastering” companies Forrester studied saw nearly a 3X improvement in business decision-making speed and time-to-market with new products, higher marketing ROI, greater marketing efficiency, and new customer insights compared to companies with less sophisticated analytics cultures. [2]

Speed is critical today.

ROI has never not been critical.

And new customer insights drive engagement, value, and loyalty.

One other thing that Forrester says in “How An Analytics Culture Drives Exceptional Business Results?” A key quality of companies that master marketing analytics is “analytical insights are delivered via self-service platforms or dashboards.”

That’s hugely significant, and that’s a key part of what a CGO-led organization uses to succeed: a growth stack that delivers the insights they need automatically, repeatedly, reliably.

CGOs break down silos in the pursuit of growth. They use new technologies, and they expand the skillsets of their larger marketing teams. They also spend more in digital channels, while not forgetting traditional marketing channels.

But it’s not magic.

As Ajay Thakur, CGO at Stackraft put it, the CGO role is “a disciplinary and cross-functional role which requires both art and science to identify the most efficient growth channel for the company.”

That’s marketing, sure. But it’s also product, and service, and support.

And … all the other places a brand touches a customer.

Driving marketing science requires data. It requires technology like a marketing intelligence platform that ingests, processes, and presents that data — and insights generated from that data — to enable brands to grow.

Increasingly, CGOs are accelerating that growth.

The data used in this report was drawn from a Singular survey of 700 marketers in early 2019. 85% of them are in the U.S., with the balance in Canada and the UK, and just over 1% in Australia. Depending on the number of respondents to each question, of course, if we assume there are 2 million marketers in those countries, the results should be 95% accurate with a confidence interval of 3.7.