Reed Hastings, one of Netflix’s founders, is giving up his co-CEO title and transitioning into the role of executive chairman.

The company announced the news in a letter to shareholders along with its Q4 earnings on Thursday.

Hastings spent 25 years building Netflix into the streaming giant it is today, transitioning it from a DVD mail service into a global powerhouse. Greg Peters, Netflix’s chief product and COO, will be the next co-CEO, joining Ted Sarandos, who has been in the role since 2020.

“In the last two and a half years, I’ve increasingly delegated the management of Netflix to them,” Hastings said in a statement, referring to Sarandos and Peters. “It was a baptism by fire, given Covid and recent challenges within our business.”

Hastings said that both Sarandos and Peters “managed incredibly well” throughout the pandemic, and he and the board believe it’s the right time to complete a succession plan that’s been in the works for several years.

The passing of the baton is effective immediately, with Hastings pointing to executives like Bill Gates and Jeff Bezos as other company founders who moved into chairman roles.

“We start 2023 with renewed momentum as a company and a clear path to reaccelerate our growth,” Hastings said.

Sarandos honored Hastings in a statement, noting both he and Peters learned “intellectual rigor, honesty and willingness to take big bets” from the former co-CEO, and the pair look forward to working with him “for many more years to come.”

In addition to the Hastings news, Netflix also upped Bela Bajaria to chief content officer from her current role as global head of television and named Scott Stuber—current head of film—the chairman of Netflix Film, a newly created position.

In other news

Besides a changing of the guard, the streamer also announced its fourth-quarter earnings, adding 7.66 million subscribers in its first quarter since adding ads.

The number blows past the company’s expectations of 4.5 million additions, bringing Netflix’s total to 230.75 million global paying customers, an outlook it believes points to a strong 2023.

After acknowledging that 2022 was a “tough year,” the letter to shareholders notes, “We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering.”

The company started the first half of 2022 by losing more than a million subscribers but snapped that streak to add 2.4 million customers in the third quarter.

Netflix didn’t provide guidance for subscriber additions for 2023, which is in line with the announcement it made last quarter as it pivots its focus to growing revenue. In terms of revenue, the company expects an increase of 4% in the second quarter and saw a year-over-year revenue increase of 2% in the fourth quarter, generating about $7.85 billion.

However, that number accounts for only $55 million in profit, a 90% year-over-year decline.

Adding ads

Netflix launched its ad-supported tier, Netflix Basic with Ads, in November, which was just six months after the company announced its advertising plan—something Hastings had adamantly opposed for years.

“We believe branded television advertising is a substantial long-term incremental revenue and profit opportunity for Netflix, and our ability to stand up this business in six months underscores our commitment both to give members more choice and to reaccelerate our growth,” the letter reads.

The company has seen “very little” switching from other plans to the ad-supported tier, in line with expectations, and that reaction from consumers and advertisers has confirmed its model going forward. However, the company expects the impact in 2023 will be “modest.”

Earlier this week, Netflix expanded its partnership with Nielsen to cover linear and streaming data across the U.S., Mexico and Poland and will add Digital Ad Ratings in the first half of 2023.

The company’s letter acknowledged that it’s still “early days” for ads, adding that it will work on improving targeting and measurement.

Seasoned content

As streaming competition continues to increase, Netflix had five of its top 10 most popular English-language seasons ever in 2022, helmed by Stranger Things 4 and newcomer Wednesday, which both surpassed one billion hours viewed.

Other major titles included Monster: The Jeffrey Dahmer Story, Season 2 of Bridgerton, Inventing Anna and Harry & Meghan, the company’s second most successful documentary series ever.

“Generating conversation is our primary marketing goal because we see that it drives acquisition and encourages existing members to watch more, which in turn helps with retention,” the letter reads.

Paid sharing is coming

To the chagrin of password sharers everywhere, paid sharing is on the way. Netflix previously said that account sharing affects over 100 million households and is working to crack down on it, testing in South America last year.

Later in the first quarter, Netflix plans to roll out paid sharing more broadly, which will limit the use of Netflix to a singular household. It will allow members to review which devices are using accounts and transfer profiles to new accounts.

In some countries, members will have the option to pay extra if they want to share Netflix with people they don’t live with.

“As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device,” Netflix said in the letter, adding that it expects some streamers to stop watching, which could impact near-term engagement.

Few CMOs remain at a single organization for very long. But Ann Lewnes, Adobe’s chief marketing officer and executive vice president of corporate strategy and development, is an anomaly. Her tenure spans an astounding 16 years, but will conclude next month when she retires.

In Silicon Valley, Lewnes led Adobe’s marketing organization as it transformed into the globally known digital behemoth it is today. The CMO sold the market on the company’s SaaS model and shifted its media investment into digital channels. Lewnes has been planning her departure for months, she told Adweek, and notified the company before the end of the year. Yet, she leaves Adobe without a new marketing leader to guide its global organization.

As a result, Adobe is searching for someone to fill Lewnes’ position. That individual will step into a very different organizational structure than the one Lewnes led for most of her Adobe tenure. In fact, a media agency RFP Adweek obtained describes the department as having recently undergone a “radical transformation” that streamlined regional marketing units into a single global entity.

“Initially, we were very centralized and that made sense,” Lewnes said. “Then we kind of decentralized [the marketing organization]. I think we’re looking for a much more efficient, cohesive model that has a strong center, but also empowered leadership in the regions.”

This, Lewnes said, will emphasize Adobe’s brand and messaging without compromising on its marketing efficiency.

Lewnes beat the odds

Over time, what it means to be a CMO changed significantly, to the extent that yesterday’s marketing geniuses might fail, should they now reassume their roles. A keen understanding of technology, partnerships and a crowded media space is crucial, not to mention the creative excellence and managerial intelligence that have always been on the top marketer’s job description. The new requirements make becoming an effective CMO a tall order for most. Few stay in the role very long, with CMOs in the U.S. departing their organizations on average every 40 months, according to a Statista study from late 2021.

That makes Lewnes, who assumed the role at Adobe in 2006, an exception. She’d previously served as Intel’s vice president of sales and marketing.

At the time she joined Adobe, the brand was still selling package creative and document desktop software. The leader oversaw Adobe’s marketing transformation when it moved its products to the cloud and pivoted to a subscription model.

“Our specialties were creative software, which we sold in boxes through a channel structure,” Lewnes said. “The company was, I would say, in a state where we needed significant growth … We decided to do something at the time that was crazy, because we were a very, I would say, conservative, but profitable company.”

The company’s digital transformation paralleled Lewnes’ own journey to digital-first CMO. In 2010, she risked investing 75% of Adobe’s marketing budget into digital channels—a prescient move considering how important digital investments are to today’s advertising economy.

“Marketing really became a force, and we’re responsible for driving all acquisition across the business,” she said.

Her legacy

While selling digital software to a still-hesitant customer base, the CMO took a customer-first approach and made Adobe its own case study. Using the company’s own products like Creative Cloud for content development and Experience Cloud for measuring KPIs, illuminated its customers’ needs.

“We talk about ourselves as ‘customer zero,’ because we use a lot of our own tech,” Lewnes said. “But without the people and process changes, you’re not going to get the value.”

Lewnes and her team executed that strategy through celebrated campaigns like Photoshop’s 25th anniversary spot, “Dream On.” After acquiring analytics company Omniture, Adobe became a digital marketing leader, standing out with pithy taglines like “Marketing is BS” and “Do You Know What Your Marketing Is Doing?”

A serious attention to detail and commitment to measurement and attribution also defined Lewnes’ strategy. A marketing and customer insights group became what Lewnes called “the brain trust and the center of our marketing.” The group calculated Adobe’s marketing ROI to help the CMO understand “down to $1” how much money to invest in marketing, in order to meet Adobe’s revenue goals.

“We’re changing out skills, and talent and processes—and these are not things typically that are particularly sexy—but that’s what made us be able to do this kind of marketing transformation,” she told Adweek.

Lewnes’ championed DEI initiatives during her time at the company, marketing Adobe’s “Diverse Voices” platform to spotlight underrepresented creators’ work.

The Adobe marketing org’s ‘radical transformation’

With Adobe’s success, its marketing organization sprawled.

Lewnes described the marketing organization as having a central strategy in the beginning. But when Adobe needed to grow, regional revenue became important. “What works in Germany doesn’t necessarily work in Japan, doesn’t necessarily work in Korea,” she said. The CMO considered how the brand’s regional marketing groups might have autonomy, while still tapping into Adobe’s guiding principles and relying on its stewardship. Over time, though, that strategy became less effective and most recently, Lewnes opted to reorganize and simplify what had become a complex and far-reaching department.

“What can happen then is, you can over distribute it, and it leads to inefficiency and also the potential for some misfiring on brand and what we want to convey internationally,” she said.

The changes resulted in Lewnes’ erecting a Global Center of Excellence and a Global Media Stakeholding Team, according to the RFP document Adweek obtained. While committed to a new, centralized strategy, Lewnes told Adweek she designed the new model to better equip regional groups to act on the overarching strategy.

These recent changes will impact Adobe’s expectations of its partners and how it interacts with the broader marketing ecosystem. It’s currently leading a global media review, and its agency incumbent Wavemaker is defending the business. It remains to be seen how Lewnes’ departure will impact the media review and its outcome, let alone how Lewnes’ successor will align with its chosen partner.

Veteran CMOs are familiar with the following scenario. The economy wobbles, companies consider cutting their marketing budget, marketers protest, industry groups produce reports showing why companies shouldn’t do that, then companies more or less do it anyway.

Well, as 2023 begins, marketing budgets are under pressure once again. GroupM, WPP’s media buying business, and Magna, IPG’s intelligence unit, have each lowered their 2023 U.S. ad spend forecasts. According to a recent global survey from marketing intelligence firm WARC, 2 in 3 marketers expect a recession will have a significant impact on their strategy.

“It’s the topic among CMOs: How am I going to convince my CEO and CFO to invest in marketing and not cut my budget?” said Pamela Forbus, chief marketing officer of Pernod Ricard North America, the spirits maker behind Kahlúa, Absolut and Jameson.

If the evidence indicates brands do more harm than good by shrinking marketing efforts during an economic downturn, why does it keep happening? Where is the disconnect?

Interviews with analysts, consultants and marketers themselves suggest one possible answer. CMOs aren’t skilled at defending their budgets to their CEOs and CFOs during recessions. They aren’t persuasive in proving their work generates a return on investment. They don’t speak in terms that sway anyone—aside from other marketers.

“The CFO has other metrics of business success they worry about beyond marketing,” said Tina Moffett, principal analyst at research firm Forrester. “A good marketing leader understands the dynamics of the business and can tell the story of how valuable marketing is within that context.”

In other words, CMOs need to help their CEO, CFO and other members of the C-suite understand the value of their work beyond short-term revenue growth. They need to build a business case that is not only compelling and easy to understand, but also engenders trust and confidence in marketing for the long term. Four guiding principles can help marketing leaders achieve these goals.

Build the business case based on data

To prove the impact of marketing spend, CMOs must be expert storytellers. That work starts with a proper framing of past data, which suggests reducing advertising dollars during a downturn is a mistake.

Sometimes maintaining ad spend is wise since a brand sticks out more amid a dearth of commercials from its competitors. Sometimes raising it is even better. Sometimes it costs less to keep customers during the bad times than trying to win them back as the economy recovers.

“There were a lot of lessons from 2008 that said brands that continued to invest, whether it was advertising or other ways, outperformed those that didn’t,” said Mary Zalla, global president of consumer brands at brand consulting and design firm Landor & Fitch.

According to recent research from WARC, it’s misguided for companies to scale back on advertising during a recession featuring high inflation—like the one that may occur this year—because advertising enhances brand equity, which impels shoppers to accept paying higher prices. Without a distinction in quality, consumers will be tempted to purchase the cheaper private-label version.

“It’s almost more important to keep marketing during this particular recession than in a normal recession,” said David Tiltman, WARC’s svp of content.

Learn to think—and speak—like a CFO

But, again, none of this matters if CMOs can’t turn other C-suite members into converts.

“While the advice is solid and well-founded, it is also often ignored,” noted Tiltman, who pointed out it’s less stressful for a company looking to reduce costs to run fewer TV commercials than close a factory.

The problem might be in the language CMOs are using to defend their budgets. Forbus explained some CFOs view marketing data and attribution models as “black box” science. “They don’t believe it,” she said.

One approach to overcoming this obstacle involves CMOs moving away from marketing jargon, which may have currency in some circles, in favor of vocabulary that appeals to those with the power to increase or decrease the marketing budget.

That means explaining how ad campaigns and event sponsorships affect financial metrics, such as volume, price and mix. It’s about linking brand power to a company’s stock performance. It can also entail embracing the jargon of other executives.

“If marketers can start talking the language of pricing, price elasticity and price premiums, they’re much more likely to cut through at a board level than talking about future brand sales because pricing and margins are currently some of the things keeping the CEO and CFO up at night,” Tiltman said.

Jason Galloway, who leads KPMG’s U.S. marketing consulting business, said marketers often come to him frustrated about budget cuts. They’ll show him healthy numbers for popular marketing KPIs, such as brand awareness or social engagement, and express confusion over why the CFO doesn’t seem to care.

To Galloway, there’s not much mystery there. “If you can’t connect your brand metrics to the bottom line, they don’t matter,” he said.

The Marketing Accountability Standards Board (MASB), an organization designed to set and maintain guidelines for measuring how marketing drives growth, has been fighting this since its founding in 2007. Brand and consulting veteran Joanna Seddon, who serves as MASB’s CEO, described the group’s purpose as intended “to change perceptions of marketing by turning it into a language that CEOs and CFOs can speak and understand.”

Its mission remains ongoing. A recent report from MASB implies CMOs, as opposed to chief financial officers, are the real asset managers at brand-centric companies. “Even if only partly true,” the authors wrote, “it calls into question the board compositions of many companies—which tend to have few, if any, marketing experts—and the pervasive lack of CMO participation in quarterly earnings calls.”

Be aware of the CEO perception gap

Some of this might stem from a larger issue, which is that CEOs don’t think too highly of CMOs. Why give a marketer more money and authority if you think they’re going to waste it?

According to a survey of 150 CEOs at U.S. companies with at least $250 million in annual revenue commissioned by full-service independent ad agency Boathouse Group, the majority of chief executives give their top marketers a B on overall performance. More CEOs handed out Cs than As.

Questions about a CMO’s ability to drive growth and translate company goals into marketing goals also received mixed grades.

John Connors, CEO and founder of Boathouse, said some of these weak results are due to the incongruous agendas of marketers and other corporate leaders. While CMOs often state they’re all about the consumer, Connors explained, CEOs are focused on investors, employees, government regulators and consumers, among other stakeholders.

“The CEO’s not looking for marketing’s definition of performance; the CEO is looking for the CEO’s definition of performance,” he said.

Or consider the average time CMOs dedicate to one company before moving on to another is now 40 months, according to executive search and leadership consulting firm Spencer Stuart. That’s the shortest duration in more than a decade. CEOs, by comparison, stay in their roles for an average of 85 months, more than twice as long.

Why is this the case? Some CMOs might be well liked, super successful and in high demand while others probably aren’t and are asked to leave.

“The CMO has the shortest tenure of any C-suite executive, and it’s because they don’t speak the same language as everybody else,” Galloway said.

It could also be that turnover rate stems from poor job descriptions and unclear expectations, meaning everyone’s at fault.

Whatever the reasons, a short tenure can cultivate a short-term mindset, which leads to less credibility and more job hopping.

“CMOs are too often in a resume-build mode when they arrive, which worsens their reputation,” Connors said.

Establish collaborative relationships with the C-suite

Because much of marketing deals with human emotion, psychology and behavior, it’s harder to put on a balance sheet than, say, the number of forklifts in a warehouse. It can be difficult to always know what’s working and what’s not.

Marketers can use this to their advantage since a good way to prevent budget cuts and convince others to accept your ideas—i.e., market yourself—comes down to being a decent human being who works hard, exhibits humility and treats colleagues with respect.

Maybe it’s obvious, but KPMG research showed companies produce better results when the CMO has a good working relationship with the CFO. Galloway therefore advised marketers to “make the CFO your best friend.”

Charisse Hughes, chief brand and advanced analytics officer at the Kellogg Company, said open and ongoing communication with her CEO and CFO is crucial to educating them on the value marketing brings to the company. And that doesn’t mean limiting conversations to just the victories. To do so would invite suspicion and doubt.

“As much as it’s about celebrating the successes, it’s also about sharing the learnings when you fail,” said Hughes, who noted the maker of Pringles and Frosted Flakes is dedicated to strengthening its marketing muscle through a test-and-learn approach. “There’s going to be some things that won’t work.”

At Pernod Ricard North America, Forbus is a living example of this guidance. As a first-time CMO coming from a background in data analytics, Forbus is close to her CEO, Ann Mukherjee, who joined the company in December 2019 and recruited Forbus about six months later. The two spent a decade working together at snack and beverage giant PepsiCo. Mukherjee also has experience working as a CMO at PepsiCo and consumer goods manufacturer S.C. Johnson, so she understands the role.

“I am so blessed,” said Forbus, who is also an active MASB board member. “My CEO believes in marketing, and she’s fighting to keep the marketing dollars for me. I don’t have to do that.”

To maintain transparency and accountability, Forbus has monthly meetings with members of the finance and analytics teams to review marketing data, make decisions and move money around.

Overall, the Paris-based Pernod Ricard sets aside around 16% of net sales for advertising and promotional purposes. For its fiscal year ending June 30, 2022, the company surpassed $10.7 billion in net sales for the first time, marking a 21% increase compared with the prior 12-month period.

“We’re not going to cut,” Forbus added. “We know it works.”

For a profession that often talks about crafting brand narratives for different consumer groups, it appears marketers still have room to improve in presenting certain stories aimed at a very specific audience: their superiors. Developing a basic literacy of finance and data analytics, while deepening bonds with other decision makers, will help tell that tale.

While the revolving door has slowed at Twitter of late, as there aren’t that many people left to go through it, product engineering lead Behnam Rezaei took his turn Tuesday after roughly five-and-a-half years with the company.

Rezaei tweeted about his departure Wednesday, saying in the comments that it was a personal decision, and the company was not undergoing another round of layoffs.

He joined Twitter in August 2017 as senior director of engineering, and he was promoted to product engineering lead in November after Elon Musk took over the company.

Prior to Twitter, Rezaei spent more than 10 years as founder and chief technology officer of technology startup NetSeer, which provided concept-based advertisement targeting solutions for advertisers and publishers and was acquired by Inuvo in February 2017.

Rezaei said in his tweet that he plans to take some time off and go “back to being a full-time papa bear.”

He was also complimentary of Musk, writing in his series of tweets, “It started with managing a recommendation team, then building a data-informed growth org with some of the best people at Twitter, leading to consistent causal audience growth. Then working with machine learning experts across the company to accelerate personalization and artificial intelligence in the core product and, most recently, working with Elon Musk to transform the company toward his vision and texting about product ideas or bugs with him at 3 a.m.”

Rezaei added, “I also learned from up close Elon Musk’s framework to scale the efficiency of a startup to a midsize company to achieve the unachievable. Thank you, Elon.”

He tweeted, “My respect and gratitude to great tweeps and engineers of the past who built Twitter’s core product and infrastructure. This site being here despite all the odds is proof of your excellence. #lovewhereyouworked My kudos to all the amazing people currently at Twitter. Your hard work, brilliance and the heart you bring to work every day to push the mission forward are the most unappreciated stories of the year. Be good, do good work and support each other. I will be rooting for you.”

M&M’s is officially returning to the Big Game, and it’s doing so with a new CMO at the helm.

Today, Mars Wrigley North America confirmed M&M’s participation in next year’s Super Bowl under the guidance of its newly appointed chief marketing officer, Gabrielle Wesley. The brand last participated in the event in 2021 with its spot, “Come Together.”

For Super Bowl LVII, which broadcasts on Feb. 12, 2023 on Fox, the candy brand will air a new 30-second spot from BBDO New York during the third commercial break in the second quarter. According to Mars Wrigley, the new work is just one factor in an “extensive, immersive campaign” that will roll out throughout the month surrounding the game.

While the Super Bowl is a massive undertaking for any first-time CMO, Wesley remains assured in her ability to follow the brand’s longstanding pursuit of fun, which she says ultimately guides all of M&M’s work, regardless of scale.

“Mars Wrigley has had a history of having a really iconic Super Bowl presence over the past decades,” Wesley told Adweek. “M&M’s is a brand that is all about fun, so I tell the teams all the time that if we’re not having fun, we’re not doing it.”

In a separate statement, Wesley noted that the new campaign will continue the brand’s purpose-led work from the past year—which delved largely into inclusivity with its recent character refresh and introduction of the new Purple spokescandy—while wading into “new creative territory.”

“We can’t wait for our fans to see what’s about to unfold,” she said.

Moving forward with purpose

Wesley, who has been with the company for over five years, succeeds Sarah Long, who left in October. In her new role, Wesley aims to maintain the brand’s cultural relevance by strengthening its relationship with younger audiences—a challenge that one might not readily associate with a tentpole snack brand.

“I think that it’s common knowledge that Gen Z is one of our most different generations, from how they shop and think to how they snack,” she observed. “So we have to adjust and stay relevant to all the generations of snackers. Some of our brands are 80 to 100 years old, and we continue to evolve.”

It’s a unique challenge that has pushed fellow legacy brands like Ocean Spray and McDonald’s to closely examine their creative approaches, resulting in campaigns guided by very specific humor or partnerships that are rooted in culture, respectively. In M&M’s case, Wesley says the brand will be expanding its presence in the music space by growing the M&M’s Music Lounge across major concert venues and exploring more partnerships with big artists, similar to its recent team-up with Lil Nas X for its limited edition packaging.

So far, the brand’s outreach seems be working: per Morning Consult’s 2022 ranking of favorite brands among Gen Z consumers, M&M’s placed fifth on the list. But overall, Wesley hopes all of the brand’s marketing efforts are seen as a unifier amongst younger and older fans alike.

She concluded, “I think that what you will see from our brands is that we will inspire moments of everyday happiness and meet our consumers where they are, regardless of what generation they’re a part of.”

German fashion brand Hugo Boss has announced Nadia Kokni will join as senior vp of global marketing, taking over from Miah Sullivan.

Kokni starts Jan. 1 and is joining from JD Sports Fashion where she was global group marketing director. At JD Sports, she is cited with placing a focus on elevating youth culture. Kokni has also held senior marketing roles at Tommy Hilfiger, H&M, Adidas and Bacardi.

JD Sports had not responded to Adweek about plans to succeed Koki.

Daniel Grieder, chief executive of Huge Boss explained: “With her [Kokni] extensive experience at several global fashion companies, she will support us in further increasing our brand relevance and becoming one of the top 100 brands worldwide.”

According to Hugo Boss, Sullivan will leave to “pursue other business opportunities” including joining Trey Laid’s agency Laird+Partners, which has already set up a partnership with the fashion house. As a result, she will continue to work closely with Hugo Boss, it said. She and Laird were “co-architects” of campaigns for the company including the introduction of its global refresh in January.

“Miah has been one of the key players in repositioning the Boss and Hugo brands in the global fashion market and also a major contributor to the new ‘social first’ approach within our campaigns,” added Daniel Grieder.

In November, Hugo Boss revealed a group sales annual increase of 18% for the third quarter with Grieder citing its “Claim 5” growth strategy as one element of its success. Announced ahead of its new brand refresh, the strategy is based on implementing five pillars: Boost Brands, Product is King, Lead in Digital, Rebalance Omnichannel and Organize for Growth.  

“As a brand, you have to constantly reinvent yourself to stay relevant to customers. Hugo Boss has lost relevance over the past few years, and we are reclaiming our position now. Our ambition is to become one of the top 100 global brands,” explained Grieder while speaking to Forbes in January.