CEO Decisions: Does Product Marketing Belong Inside or Outside of Marketing?
CEO Decisions: Does Product Marketing Belong Inside or Outside of Marketing?
How CEOs Can Decide the Best Placement for Product Marketing to Fuel Hypergrowth
Product marketing is a critical aspect of a company’s success. This group bridges product, marketing, and sales, and as such, it sometimes gets moved around to different departments. It’s hard to achieve impressive growth without a high-performing product marketing team refining the ideal customer profile, working as the voice of the customer to influence the product roadmap, understanding why the company is winning and losing in deals, and creating successful positioning for campaigns, sales materials, and customer support up-sell.
The product marketing alliance found in their 2023 State of Product Marketing report that 57% of product marketers report to marketing (their survey indexes mostly B2B SaaS companies). The second most likely reporting structure was to product management due to the close ties and collaboration, and third, 8.6%, report directly to the CEO, a very strategic alignment.
How Does Product Marketing End Up Outside of Marketing?
In my experience, there are a number of different organizational dynamics that can put a department that has MARKETING in their title outside of the marketing organization.
Just Building the Function of Marketing - Frequently, earlier-stage startups don’t have the money or draw to hire a single VP of Marketing or CMO with product marketing and demand generation expertise. In these cases, they often have peer functions, and product marketing may indeed report to the CEO, or to the head of product, or even a co-founder CTO.
Inexperienced Marketing Leader / CMO Turnover - Product marketing ends up outside of marketing most frequently when there’s a marketing leadership gap - be it from leadership turnover, or a marketing leader who is inexperienced and not considered capable of stewarding the function. Very often when a CMO departs, the function is given to another team for safekeeping.
General Manager Function - Sometimes if a company has a critical strategic initiative, they hire a leader to bring together cross-functional teams. The product marketing function, in this instance, is often the core of that team - the strategists, the message-makers, the market definers. We went through a stage like this at Atlassian where General Managers were brought in to focus on different audiences. Product marketers for their function were put into their groups, and only a platform product marketing team remained in marketing to create unified messaging on top of the different business units.
Deeply Technical Products with Technical Center of Gravity - At Oracle, the Product Marketing team sat outside of the CMO’s team because engineering and product management had so much gravitational pull at the company, and the marketing team was considered less technical. It was considered critical that product marketers were as close as possible to the technical aspects of the business.
How Product Marketing Ends Up in Product Management
Since product management is one of the primary partners of product marketing, product management often seems like a safe and strategic team to steward product marketing. I mean they do have PRODUCT in their name… Some real advantages can come from the arrangement: driving closer relationships and collaboration, getting them closer to influencing the roadmap, and getting product marketers deeper into technical understanding the intricacies of the product.
This is so impactful that sometimes, even when a new CMO is hired, product marketing remains in the product team because of a strong product leader or a philosophy of wanting the two functions closer together.
Yet many experienced CMOs won’t take the job without owning the function because it’s hard for a CMO to be strategic and insightful about the market and customers or to create effective content, advertising, and sales materials without a product marketing team directly supporting the same priorities. In marketing organizations without product marketing, I’ve often seen the formation of a ‘shadow organization’ - “content" people with deeper product or expertise brought in to help the marketing team be successful. This is rational for the marketing leader, but inefficient for the overall business.
CEOs need to carefully consider how reporting structure can affect the impact of product marketing on the company’s success and about potential side-effects
Advantages of Placing Product Marketing in the Product Organization
Enhanced Product Knowledge: Being part of the product team allows product marketers to gain a deeper understanding of the product’s technical aspects, leading to more accurate and effective messaging.
Improved Collaboration: Close proximity to product managers and developers fosters better communication and collaboration, ensuring that marketing strategies are aligned with product development.
Faster Feedback Loops: Product marketers can quickly relay market feedback to the product team, enabling rapid iteration and improvement of the product based on customer insights.
Disadvantages of Placing Product Marketing in the Product Organization
Potential Misalignment with Market Needs: Focusing too heavily on the product’s technical features can lead to messaging that resonates within your own internal echo chamber but less with the market, potentially missing broader marketing opportunities. Product marketers in product might not see all the things that really aren’t working in the advertising conversions, or in events and execution, they may drift farther from customer interactions in the field.
Resource Constraints: Product organizations may prioritize engineering and development resources, potentially underfunding product marketing activities. This is especially true in the scenario where product marketers are distributed to report to product managers instead of having a single senior product marketing leader guide the team. A gap of a senior product marketing leader creates a gap in a more unified, integrated vision for the product and company positioning. As nested individuals instead of a strong unified team, product marketers become more of ‘release announcement’ product marketers, aligned to the product manager’s objectives instead of providing a healthy counter-balance.
Limited Market Perspective: Product teams may lack the broader market and competitive insights that are typically more robust within the marketing organization. They can also be a bit further from the sales team.
Limited Accountability for Driving Revenue: A product marketing team in product might be more aligned with the product’s objectives than helping drive pipeline and enabling sales for selling. While they may assist with campaign work or pitch decks, their sense of urgency around the core KPIs of their top leaders are aligned differently.
Advantages of Placing Product Marketing in the Marketing Organization
Stronger Market Orientation: Marketing teams are generally more attuned to, and prioritize investments in market trends, customer needs, and competitive dynamics, ensuring that product marketing strategies are market-driven.
Unified Messaging: Centralizing product marketing within the marketing organization ensures consistent messaging across all marketing channels and campaigns, enhancing brand coherence and effectiveness.
Resource Allocation: Marketing organizations often prioritize investments in product marketing more than product organizations because market research, competitive analysis, and campaign execution underpin the success of the entire marketing organization. A weaker product marketing function doesn’t hurt the product management organization itself as directly, leading to a different resource allocation.
Should Product Marketing Report to the CEO?
While the product marketing institute says this is somewhat common (8.6%). I have only seen this at earlier-stage startups where the marketing function is still immature. Product marketing can be a huge strategic lever for a company, but usually, it would be done through a CMO with strong product marketing experience and reports to the CEO.
What if we see it as a helpful tour of duty?
As with many organizational designs, there are reasons some functions move out and in of different structurees. Large companies often swing on a pendulum between regionalizing teams and creating centralized headquarters designs. Similarly, the pendulum swings back and forth between General Managers who pull together cross-functional teams for big initiatives, and the re-distribution of those business units back into the core business for more integration in the larger strategy. It’s not BAD for product marketing to spend some time under the CEO or under a product management leader, especially if the leadership gaps, market demands, or strategic impact demand it. It CAN be helpful to harvest the benefits and relationships built by really embedding into another team.
Where Should CEOs Place Product Marketing?
Organizational design is very difficult because we must balance what is ideal with the people and situation we actually have in front of us. The decision on where to place product marketing depends on your specific context, leaders' strengths, size, market dynamics, and product complexity. There could be a time and a place for any of the orientations, and you can take specific measures to counter-balance some of the negatives with dotted line reporting, office sitting arrangements, shared KPIs, cross-team offsite, and more. However, the majority of mature, high-functioning marketing teams have product marketing as a core function. If it’s not on their team, you’ll find them trying to re-create it to get the benefits. Beware.
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