CMO Perspectives: Chris Novak Of Eden Collective On Where to Assign Your Marketing Budget and Why
An Interview With Kieran Powell
Frequency is a crucial component in planning a media buy. If you’re looking to maintain awareness, a lower frequency might suffice. However, if the goal is to gain consideration or purchase intent, you might increase the frequency. While it’s obviously important to avoid over-frequency, we’ve found that maintaining a minimum frequency is equally important, depending on the channel.
In an age where marketing landscapes are rapidly evolving and consumer behaviors are constantly shifting, Chief Marketing Officers (CMOs) play a pivotal role in steering their organizations’ marketing strategies towards success. With a plethora of channels, platforms, and techniques at their disposal, the decision on where to allocate the marketing budget is more critical than ever. We’re seeking to explore questions like: What factors influence their decisions? How do they balance between digital and traditional marketing channels? What role does data play in their decision-making process? And importantly, why they choose to invest in certain areas over others? As part of this series, we had the pleasure of interviewing Chris Novak.
CHRIS NOVAK blends science and art to create a conduit between the audience and the creative in the constantly evolving world of media. He thrives on challenging preconceived notions of how media works based on new signals and data. Chris repositions problems from the “unsolvable” to the “solvable” and uses a systematic approach to arrive at solutions. Throughout this process, Chris focuses on collective thinking, with the client bringing knowledge of their business to his understanding of media to drive the big ideas and achieve scalable growth.
At Eden Collective, a boutique media science firm supporting high-growth brands, Chris is the expert in media strategy and analytics. Using a media performance mindset, he has guided clients, including the nationally recognized Farmer’s Dog pet food brand. He is recognized for developing media buying processes for clients. By developing a systemic buying process clients can make bigger decisions — ultimately driving exceptional revenue increases. Through this process-based approach, clients have been able to continue to develop learnings that can be reinvested into the business.
Previously, Chris was the SVP of Analytics at Dentsu International, one of the largest global media agencies providing comprehensive services to Fortune 500 companies. He utilized data-driven methodologies and predictive modeling for brands including Microsoft and AB-InBev. Earlier, Chris was VP of Analytics at Merkle, a data-driven marketing company with clients including Diageo, GSK Consumer Health, L’Oreal, Office Depot, and Nestle. In this role, he guided companies in integrating 1st-party data into their media activation and measurement processes. Chris began his career as a quality management consultant and auditor, including a brief stint as an actuary at a benefits consulting firm.
Chris recently led a session at the CommerceNext annual conference on “How the Farmer’s Dog reinvented their TV measurement models to accelerate their exponential growth.” He received a BS in film & video and an MS in mathematics from Drexel University.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’ve had a wide and varied background that has all come together enabling me to draw from these experiences in my current work. As an undergrad, I majored in both mathematics and film which helped form a logical foundation for my thinking while also understanding narrative structure.
I started my marketing career at the bottom of the funnel in paid search. It was here that I was able to build forecast and bidding algorithms in an environment where the impact occurred close to the time of exposure. This expanded to looking at CRM efforts as the agency where I worked was bought by Merkle. Through their expansion, I had the opportunity to grow the breadth of my marketing experience learning the ins and outs of people-based marketing. When Merkle was eventually bought by Dentsu I was able to make the leap to the top of the funnel looking at the impact of higher-reach channels like TV, OOH, and Radio for some of the largest advertisers in the world.
It was here that I was able to challenge my thinking on people-based marketing vs. large-scale reach. Performance Marketers spend a great deal of effort on tightening their audiences, while larger advertisers continue to look to expand their addressable market. Now that I’m at Eden Collective I get to help companies strike the right balance making sure that companies aren’t spending 80% of their time focused on just 20% of volume.
It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Looking back one of the funniest mistakes I made was when I was working in paid search and would say that “paid search drove X amount in revenue.” While it seems somewhat innocuous and maybe a peculiarity of the English language, by saying with a level of certainty that paid search definitely drove X in revenue, I was really implying that all of that revenue was incremental. Being new to marketing I hadn’t thought through the entire funnel and overall ecosystem of which paid search is just one small piece. When a colleague finally asked me, “but where do those searches start from?” I immediately realized the folly of my ways and became obsessed with understanding not just the marketing ecosystem but the overall forces that impact revenue growth.
Are you working on any exciting new projects now? How do you think that will help people?
The most exciting project I’m working on now is building Eden Collective. We were formed to fill a gap in cross-channel strategy and analytics available to a vast number of brands in the middle market. This function is typically found at large holding companies serving global and national enterprise brands, but for many emerging brands that work with smaller shops with specialized expertise, it’s hard to find groups that can integrate these efforts like a large holding company would.
Essentially, what we’ve built is a standalone strategy and analytics function that helps guide media planning while also being able to measure its real impact on the business bottom line. This is going to be immensely helpful for our clients. Many of them have expressed relief and excitement, saying things like, “I didn’t know a shop like yours existed.” They’re happy because they no longer have to upgrade to a large holding company, where they would be a small client. Instead, they can maintain their deep relationships with channel experts while also benefiting from our expertise to ensure everything is integrated. We create media investment strategies rooted in strong audience planning approaches and have the capability to measure their success.
Thank you for that. Let’s now shift to the central focus of our discussion. Can you share an experience where a unique or unconventional budget allocation led to unexpected success in your marketing campaign?
I’m actually working through this with a couple of clients right now. One of which just launched some new creative on Linear TV. This led to a major growth in response to their website. This correlated with a rise in ROAS on their FB Remarketing campaigns. We quickly started to shift dollars from FB Prospecting (where we were seeing $50 CPMs) and into Linear TV (where we had $5 CPMs). So even though there was slightly more “waste” in Linear TV, the channel’s ability to deliver 30 seconds of uninterrupted video on a large screen to a relatively attentive audience combined with an attractive CPM, efficiently primed a broad audience to buy. They already knew more about the product than what they were able to learn from the lower attentive, scrollable FB Prospecting ad, making the remarketing much more effective.
How do you balance investing in emerging marketing trends versus traditional, proven strategies in your budget decisions? Can you give us an example?
The overall concept and strategy of marketing hasn’t fundamentally changed. We are utilizing media to connect creative to audiences. We look at trends in emerging media and marketing channels primarily through a lens of how it’s contributing to the fundamental approach of reaching the right audience with the right creative. If we see that our audience’s media consumption habits are shifting then we will evaluate the costs associated with the new media, develop a pro-forma based on potential impact, and then evaluate whether it’s worth testing. The challenge with trends is that it’s easy to get caught up in just wanting to test everything new. Just because something is new and may have your audience, doesn’t necessarily mean it’s the next best place for marketing spend. We need to evaluate the trade-offs between cost and expected performance. As with any new trend, you won’t necessarily know the performance until you run, but you can definitely know what performance would have to be for the channel to be successful and whether it’s even in the realm of possibilities to achieve results. The trick is to avoid thinking about testing as a head-to-head comparison of old vs. new, but rather to define and measure its impact against the unique potential the emerging trend can contribute.
An example of how we are balancing this is how we are looking at influencers. Balancing the use of influencer channels in marketing involves recognizing both their potential benefits and limitations. Many organizations have seen great success with influencer channels, often partnering with influencers whose popularity was rising just as the companies were taking off. While many companies hope to find the next big influencer, this is more of an outlier than the norm. For us, we look at the channel because it’s still important, but we recognize it for what it is. We might partner with someone who has a large number of followers, but we understand that only a certain percentage of them will see the organic posts. We also consider all the ways we can realize benefits. If we were to evaluate this channel solely based on reach and direct attribution, we might see that it’s not a strong channel in our mix or has limited scalability and ROI. However, it’s important to look at all aspects of what a channel can do for you and determine when it’s worthwhile to hop on a trend. If we partner with a strong content creator, we can deploy those assets into our paid social channels, which are more scalable. The value we see can extend far beyond just that one specific channel.
In what ways has data-driven decision-making influenced your approach to allocating marketing budgets, and can you provide an example of this in action?
Data-driven decision-making happens at all stages of developing marketing budgets. If I were to break it into three main stages — pre-campaign, in-flight, and post-campaign — there are opportunities to use data in each of these phases. The first question to consider is where the data is coming from, the level of confidence I have in it, and the types of decisions I can make based on it.
In the pre-campaign phase, we often use syndicated data sources like MRI to understand the audience we aim to reach. This helps determine the media investments needed to effectively reach them. At this point, we also look at past campaigns to identify what was successful and to help set goals for reach and frequency. This allows us to build a pro forma and have clear expectations going into the campaign, providing benchmarks to guide us.
During the in-flight phase, having these benchmarks is crucial. I know the definition of performance, the impact variables, and what costs to include in my spend. This enables me to monitor whether my execution matches my strategy and make necessary optimizations. Knowing these details helps ensure that the campaign is on track and performing as expected.
Finally, in the post-campaign phase, the post-wrap report is vital. It feeds into the next campaign and helps answer larger strategic questions such as whether the media mix was sufficient, what changes should be made, and what new insights can inform future campaigns. All of this comes back to effectively analyzing the data at each stage.
How do you evaluate the ROI of different marketing channels and decide where to invest more or cut back?
This question hits on one of the biggest icebergs we steer clients around every day. We are just now emerging from the era of “attribution” in which brands felt that they could perfect their marketing mix strategies by attributing every sale to every dollar spent and then setting up an algorithm to optimize. Now they are realizing that there doesn’t exist a singular ROI metric and that almost each platform and channel has its own unique system and method for measuring ROI. An even greater challenge is that channel or platform-reported ROI is often not correlated with actual business performance.
Just this past month we have been working on a test with an e-commerce client laser-focused on new customer acquisition and bound by strict ROAS targets within each channel. To achieve these targets meant restricting audience targeting parameters that limited our ad exposures only to customers “ready to buy now.” By optimizing sales conversions at the bottom of the funnel, their META campaign was able to deliver on its ROAS target with budgets up to $30,000 per week. However, once we reached this $30,000 threshold, the direct ROAS (as reported in the META platform) would decline to 25% below the established target.
To address this intractable “fail to scale” problem, we reexamined the measurement strategy — was that target ROAS even the right KPI? We asked the question: what would happen to ROAS if we optimized to a landing page visit (people who may be interested but not yet ready to buy) rather than bottom-funnel conversion? Certainly, our platform reported ROAS would drop, but by how much? And ROAS did drop, precipitously. However, so did the cost of media. For the same $30,000 per week, we were able to reach 3x the number of prospects with CPMs that were a fraction of the cost. While those prospects did not convert at first, by adding them to our remarketing pool, we were able to remarket to them over time, achieving an attractive ROAS within 30 days at a much higher volume than before.
In other words, only by shifting our measurement strategy, were we able to rethink the Media approach and have the confidence to test into reach/volume-building activities whose results looked “poor” through the lens of our existing KPI structure, but in fact yielded much greater performance results over time.
Based on your experience and success, what are the “5 Things To Keep in Mind When Deciding Where to Assign Your Marketing Budget, and Why?”
- Budget:
Determining the appropriate budget size is crucial for deciding where to allocate funds. While finance and marketing often collaborate to finalize budgets, it’s essential to run multiple scenarios to understand three key numbers: What is possible? What is necessary? What is affordable? Knowing what is possible ensures that the business understands how marketing can support topline revenue generation. Understanding what is necessary ensures that marketing dollars aren’t wasted if there isn’t sufficient reach to move the needle. Affordability is where finance and marketing align to ensure that marketing can deliver on business outcomes. Once budgets are determined, it’s important to identify opportunities by channel. Where can you find your target audience? How do CPMs vary by channel? What has been the historical impact based on channel mix? Addressing these questions is critical for strategic budget allocation and ensuring that marketing efforts are both effective and efficient.
A new client, a startup in the personal care category, asked us to advise them on the optimal strategy for deploying TV (encompassing linear and streaming) to drive new leads among a target demo of Women 25–54 with the caveat that their budget was limited to $20,000 per week. They were particularly enthusiastic about testing linear TV for its efficient CPMs and high reach potential against the target audience. While we agreed that linear could be a fantastic match for this product, given its broad appeal, we advised that $20,000 per week, even in the Direct Response inventory market, would not afford them the appropriately sized networks, dayparts, and spot frequency levels to make strong use of the channel. With this budget, we refocused the client on building a video business case via programmatic CTV with which we could laser in on a tight geo and audience in which we could better achieve demonstrated business impact. With this small budget, we selected two important mid-sized markets and narrowed our audience to their highest potential target audience, W30–49 with HHI $75K+. By delivering a frequency of 3x per week to a significant, but focused audience in a narrow geographic area, we were able not only to implement a conversion lift study to ad exposed vs. non-exposed consumers, but also evaluate session and conversion lift at the market level vs. markets that did not receive this incremental budget. Once we have firmly established the business case for video impact, we will then be able to confidently roll out scale investment through more efficient video channels, such as linear TV and lower-cost national, direct-to-publisher CTV.
2. Audience:
Identifying the target audience for a given campaign is crucial. It’s important to know where they spend their time and the costs associated with reaching them on those platforms. Within these platforms, different ad stocks, lag effects, and other factors that influence how the message is delivered and received must be considered. Brands often mine their current audiences well but limit their market opportunities by focusing on what has worked within their performance channels. When experimenting with new audiences, these brands often use valuable working media budgets to “test” new audiences, which can be an expensive and wasteful approach, akin to throwing darts against a wall. Hundreds of thousands of dollars can be wasted this way. There is a better way.
For a recent healthcare client, a consumer research partner was enlisted to design a conjoint analysis, which provided more precise targeting and improved ROI. Initially starting with a broad audience of men aged 35+, the analysis led to targeting a subset of this group, specifically those most likely to be influenced by social media. “Nutrition nuts” were identified as the prime target, who have vastly different media consumption habits than “couch potatoes.” They are more active on social media and prefer YouTube over linear television. By using well-designed quantitative consumer research upfront to identify this high-potential segment, it was possible to immediately reach a receptive audience without wasting dollars, leading to better ROI and increased sales.
3. Reach:
What channels can reach my audience? What’s the cost of reaching them on those channels? If I’m seeing a 50% overlap between CTV and Linear TV against the same audience but Linear TV is 1/10th the cost, then that’s the channel to start in. In an environment of unlimited resources, it can be fine to define your audience in the broadest terms possible. But our clients (and most brands) are operating within an environment of constrained budgets, and strict CAC or ROI parameters. It goes without saying that a clear audience definition is mission-critical to the creative message and the channel. We like to walk clients through a thought experiment of audience economics by juxtaposing two imaginary products and their associated audiences.
An example of this in the dog food category is to define the first as just dog food and the other as a food specially designed for diabetic dogs. It’s not as simple as “Where can we find this audience?” We examine the costs, benefits, and implications of targeting costs and tech fees associated with hyper-targeting. Only after we’ve done the math can we determine whether the incremental cost to “eliminate waste” is worthwhile.
4. Frequency:
Frequency is a crucial component in planning a media buy. If you’re looking to maintain awareness, a lower frequency might suffice. However, if the goal is to gain consideration or purchase intent, you might increase the frequency. While it’s obviously important to avoid over-frequency, we’ve found that maintaining a minimum frequency is equally important, depending on the channel.
For performance channels, frequency can be determined by the algorithms. However, for broader reach channels, you risk wasting money if you don’t spend enough.
With one of our DTC clients we observed that on their linear TV buy, the CPA decreased as impression volume increased, up to a point. This allowed us to determine the minimum frequency threshold before even turning on linear TV. When planning our budget, we can say, “If I have a certain amount left over and can’t reach the minimum threshold, then this isn’t a viable channel.” This is a crucial measure to track in our budgeting process.
5. Creative:
Studies show that Creative accounts for 60% or more of marketing effectiveness. Aligning the right message with the right audience is essential. Central to the creative question is whether the format matches the communications challenge at hand. Are we selling a straightforward consumer product such as a sponge, or introducing an entirely new category, like a marketplace for day passes to pools and spas? The former might be easily delivered in a 6-second social video, whereas the latter requires the depth of story and consumer attention only available through 30-second large screen, non-skippable streaming, and linear TV formats. While an audio format might be great for a local furniture retailer, it is not optimal for a personal care or beauty brand, where showing is as important as telling.
Existing levels of brand awareness must also be considered with the creative product. The Farmer’s Dog Super Bowl spot is a great example of this. With only light product branding, the emotionally resonant spot managed to win the love of consumers nationwide. Part of its great success was predicated on the substantial, multi-year prior investment in educating consumers about both the brand and the value of fresh food versus kibble.
Could you discuss a challenging budget decision you faced, how you navigated it, and the impact it had on your overall marketing strategy?
One challenging budget decision was determining whether to move dollars from Facebook prospecting to linear TV or vice versa. For linear TV, the budgets were getting low enough that the minimum reach thresholds required for success were not being met. If the budget decreased any further, it wouldn’t make sense to keep investing in TV, and it would be better to allocate everything to Facebook prospecting. Conversely, to keep TV fully funded, dollars would need to be moved from Facebook prospecting into TV.
To navigate this decision, we analyzed all potential outcomes and the impact of the marketing. This involved a simple channel-level analysis, looking at the correlation of Facebook prospecting with sessions, direct sales, retail sales, and Amazon sales, and doing the same for TV spend. Prior learnings indicated that TV had an impact beyond just direct sales, while Facebook had a more limited impact on retail compared to TV.
We built scenarios to show the business the potential outcomes. Investing in TV would likely result in a drop in ROI for direct sales, but overall sales would increase. Conversely, increasing the Facebook prospecting budget would see year-over-year gains in the direct sales channel, but the holistic return for the business would be lower. Ultimately, the decision was made to continue investing in TV, knowing it had a broader impact on the overall business. As returns came in, reinvestment in Facebook prospecting was possible.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
To bring the most amount of good to the most amount of people we can adopt the same principles we have for marketing to life. Open the time horizon in which you are trying to measure impact and realize how actions today can pay off further into the future.
How can our readers further follow your work online?
They can follow me on LinkedIn. I write a lot about marketing and media and always post updates.
This was very inspiring. Thank you so much for joining us!
About The Interviewer: Kieran Powell is the EVP of Channel V Media a New York City Public Relations agency with a global network of agency partners in over 30 countries. Kieran has advised more than 150 companies in the Technology, B2B, Retail and Financial sectors. Prior to taking over business operations at Channel V Media, Kieran held roles at Merrill Lynch, PwC and Ernst & Young. Get in touch with Kieran to discuss how marketing and public relations can be leveraged to achieve concrete business goals.
