What You Should Know About Neuromarketing

The notion that all human emotions, ideas, and behaviors—even consciousness itself—are only the byproducts of neuronal activity in the brain is known as the astounding hypothesis, according to Nobel laureate Francis Crick. The promise of this theory for marketers is that it can lessen the ambiguity and guesswork that have previously hampered efforts to understand consumer behavior. In order to forecast and possibly even influence consumer behavior and decision-making, the field of neuromarketing, also referred to as consumer neuroscience, analyses the brain. Neuromarketing, which was up until recently thought of as an extravagant “frontier science,” has been strengthened over the past five years by a number of ground-breaking research that show it has the ability to benefit marketers.

Marketers continue to question if neuromarketing is worthwhile even though its validity is well proven. What equipment is most helpful? How is it done properly? Marketers must comprehend the variety of strategies at play, how they are applied in both academics and industry, and what future prospects they may offer.

The Neuromarketing Tools

The term “neuromarketing” is used informally to describe the measurement of physiological and neural signals to obtain knowledge of customers’ motivations, preferences, and decisions. This information can then be used to inform product development, pricing, and other marketing areas as well as creative advertising. The two most popular techniques for measuring are brain scanning, which measures neural activity, and physiological tracking, which monitors eye movement and other proxies for that activity.

The fMRI and EEG are the two main methods for scanning the brain. The former (functional magnetic resonance imaging) is carried out when a person is lying inside a machine that continuously records data over time in order to follow changes in blood flow across the brain. Using sensors attached to the subject’s scalp, an EEG (electroencephalogram) may follow variations in activity over fractions of a second, but it has difficulty identifying the precise location of the activity or measuring it in deep, subcortical parts of the brain (where a lot of interesting activity takes place). An fMRI can look deep inside the brain, but it is laborious and only records activity over a period of a few seconds, so it can miss transient neuronal occurrences. (Furthermore, fMRI machines typically cost approximately $5 million with considerable overhead, vs about $20,000 for EEG equipment, making them far more expensive.)

The tools that can be used to measure the physiological proxies for brain activity are typically more accessible and less expensive. Facial expression coding, which reads the minute facial muscle movements, can measure emotional responses. Heart rate, respiration rate, and skin conductivity can also measure arousal. Eye tracking can measure attentiveness (through the fixation spots of the eyes) and arousal (by pupil dilation).

When business school researchers began to show that branding, advertising, and other marketing strategies can have measurable effects on the brain, interest in consumer neuroscience exploded. In 2004, Coca-Cola and Pepsi were provided to participants in an fMRI scanner by researchers at Emory University. The researchers observed a consistent brain reaction when the drinks’ identities were obscured. The limbic structures (brain regions linked to emotions, memories, and unconscious processing), however, displayed increased activity when subjects were able to view the brand, indicating that brand awareness impacted how the brain evaluated the beverage. Four years later, a team led by Hilke Plassmann of INSEAD conducted brain scans on test subjects as they drank three wines with varying costs; the neural signals revealed a preference for the more costly wine. Actually, the three wines were all identical. Another academic study using fMRI found that consumers’ value judgments may vary when they saw a price: The brain data showed two different mental computations when the price was shown before exposure to the product: “Is this product worth the price?” when the price was presented first, and “Do I enjoy this product?” when the product was presented first.

Diminished Pessimism

Diminished Pessimism

Marketing professionals have been sluggish to employ EEG and fMRI devices despite these encouraging academic findings. For instance, just 31% of respondents to a survey of 64 neuromarketing companies said they used fMRI machines. According to Carl Marci, the head neuroscientist at Nielsen Consumer Neuroscience, “I know of three or four providers who have made fMRI their major service offering, and they’ve all failed.

This resistance stems in part from a general lack of confidence in the technique’s capacity to produce insightful data that goes beyond what conventional marketing strategies can provide. Ming Hsu, a marketing professor at UC Berkeley, stated in a 2017 article in the California Management Review that “the prevailing attitude…can be described as… ‘neuroscience either tells me what I already know, or it tells me something new that I don’t care about.” Brain imaging, for instance, can demonstrate that the same beverage with different price tags may cause varied reactions in test subjects, but so can more straightforward techniques: According to a behavioral experiment conducted in 2005, respondents performed poorly when given an energy drink with a discounted price than when given the identical drink at the full price. Does it really take telling marketers that consumers’ brains respond differently to Coke and Pepsi to make them comprehend the significance of branding?

The conflict between cautious academics and exuberant marketers hasn’t lessened skepticism over brain scans. On the basis of fMRI research, branding expert Martin Lindstrom suggested in a New York Times editorial from 2011 that the way iPhone users felt about their phones was comparable to romantic love. A letter to the Times with 44 academic cosigners sharply criticized the editorial.

But for two reasons, this skepticism might soon disappear. First off, during the past five years, science has made great strides and has started to corroborate some of the outrageous “mind-reading” claims made by Lindstrom and other pioneers of neuromarketing. The Wharton Neuroscience Initiative’s Michael Platt reports that a team from the University of Pennsylvania is close to proving that, on a neurological level, people do, in fact, love their smartphones as much as Lindstrom claimed. Brain scans are anticipated to become more popular with marketers as the science becomes more established and as more neuroscience PhDs move from academic labs to industry.

The effect of creative content is increased via eye tracking and facial coding.

Diminished Pessimism

These strategies are costly and technically challenging to implement, thus they haven’t yet made it into common marketing toolkits. However, Uma Karmarkar, a neuroeconomist at UC San Diego, thinks that the incremental advantage over conventional approaches makes brain scans worthwhile in some high-stakes circumstances, such as a significant product launch by a huge consumer goods company. She recently claimed that the idea that only a small number of people may be able to precisely predict how a sizable consumer base will respond “should be extremely interesting to marketers.” Cerf concurs, saying that neuroforecasting “is actually a viable competitor when accounting for all the time, effort, cost, and quality concerns of the usual techniques of getting at the individual’s opinions.”

Physiological Signal Measurement

Despite these advancements, neuro marketers have been eager to adopt less expensive methods like eye-tracking and face coding. For instance, Nielsen, one of the top consultancies in a crowded market, claims it uses facial coding and eye tracking to ensure that advertisements actually elicit the response they were intended to elicit and that customers’ attention is focused at the right times and on the right things (such as a logo when it appears) (though Nielsen rarely uses any of its tools in isolation).

In fact, the information that physiological instruments often provide—such as whether someone is experiencing a strong emotion, paying attention, or remembering the content given a particular stimulus like an advertisement—is especially helpful for creating commercials. According to Horst Stipp of the Advertising Research Foundation, “excellent creative is more crucial than anything else for advertising effectiveness.” And there is ample proof that using marketing research techniques based on neuroscience can really increase the effectiveness of advertising.

However, a lot of academics favor using brain scans instead of physiological stand-ins for their studies. According to Knutson, measurements will be worse the further away from the actual brain they are taken. However, due to their long history, lower cost, easier administration, and ability to be combined with more conventional marketing research tools like surveys, focus groups, and so-called implicit association measures, physiological measuring techniques will probably continue to be used in industry (for example, the time it takes to respond after being asked a question).

It Sells Neuro

Should businesses invest in neuromarketing, whether through expensive methods like brain imaging or less expensive ones like fMRI? Some have already: Technology firms like Microsoft, Google, and Facebook have lately established divisions; NBC and Time Warner have been using them for years. According to Karmarkar, most enterprises still cannot afford to have the in-house near capability, but smaller businesses can choose to partner with specialized consulting services.

She cautions, however, that the industry is plagued by suppliers that overstate what neuromarketing can accomplish. “There’s still a lot of snake oil out there,” adds Cerf, who also reports that more than 50 businesses have contacted him about their “neuroscience product” and asked for his endorsement. Only six, he claims, “meet a fundamental threshold I would consider helpful for managers.”

Industry associations are making an effort to assist marketers in evaluating the worth of various neuromarketing techniques. For instance, the Advertising Research Foundation published a significant academic study in 2017 to determine whether traditional methods like focus groups and implicit association tests, and neuroscientific technologies were more effective at forecasting market-level behavior: Traditional marketing studies were put to the test against a range of “neuro” techniques by researchers at Temple University and NYU, including eye-tracking, skin conductance, heart rate, EEG, and fMRI. A further investigation revealed that while other techniques were helpful for enhancing ad originality and effectiveness, fMRI offered the most notable upgrade in prediction power above conventional techniques.

Although neural manipulation may appear sinister, it already has an impact on customers.

Although neural manipulation may appear sinister, it already has an impact on customers.

Companies wishing to work with experts to benefit from these tools should carefully manage those interactions. Karmarkar advises engaging internal neuroscientists to supervise the process in order to assure high-quality feedback from neuromarketing experts. According to Cerf, a checklist can aid in producing good quality: Participate in the study of actual neuroscientists? Are any of the consultancy’s techniques, information, or resources published in scholarly journals? Is the subject pool representative (a crucial question for international brands)? Do the consultants have both scientific knowledge and marketing expertise? Do they have a successful track record? And can they demonstrate that their insights will go beyond what can be learned from using conventional techniques?

Adapting Thoughts

Marketers have historically tried to alter consumer preferences in addition to merely measuring them. An area of inquiry that sparks interest, as well as ethical problems, is the investigation of whether the brain may be utilized to influence purchases by neuroscientists. Here are some potential future applications of neuroscience to affect consumer behavior:

  • improved segmentation Marketers are interested in learning which demographic groups are most receptive to their branding and advertising initiatives. Traditionally, this segmentation is carried out in accordance with demographics (such as age and wealth) or psychographics (impulsivity). Segmenting consumers based on variations in their brains might be more effective: Researchers at INSEAD discovered changes in the brains of those who are susceptible to marketing messages.
  • Bedtime nudges. Researchers in the field of neuroscience have shown that we are susceptible to influence during certain periods of sleep. According to a 2015 study, smoking was reduced for many days after smokers were exposed to the scent of cigarettes combined with rotten eggs during “phase 2” (the body’s preparation for deep sleep). Since then, comparable research has demonstrated the capacity to boost consumer preference for particular goods or encourage particular behaviors.
  • hormone trickery. Neuromodulators—brain hormones like testosterone, cortisol, and oxytocin—and neurotransmitters—chemical messengers that enable communication between brain cells—have an impact on brain activity. Currently, scientists are looking into how these neuromodulators affect consumer behavior. In 2015, researchers observed that giving testosterone to customers enhanced their liking for luxury items. They reasoned that testosterone increases people’s sensitivity to status and that luxury goods serve as social identifiers.
  • neural inhibition that is momentary. TMS devices use magnetic fields to stimulate or depress nerve cells in the brain, momentarily “knocking out” specific regions in a manner similar to that of a brain injury. Researchers showed that repressing activity in the posterior medial prefrontal cortex using TMS decreased the degree to which persons engaged in socially acceptable conduct. Moran Cerf has worked with people whose fear and disgust was suppressed or amplified to see if they displayed differences in their reaction to things that might typically be frightening (insects, for example, or long-term disasters), and to learn what can be done to make people more susceptible to messages encouraging them to engage with those things—for example, to eat food made from insects, which is a good source of protein with low environmental impact.
  • Although neural engineering may seem sinister or even dystopian to some, proponents point out that marketers already employ strategies to sway customers without their knowledge. Michael Platt, whose organization recently put together a conference on neuroethics, asserts that a man will be influenced by the extraneous model if he sees an advertisement for a truck with a sexy woman standing in front of it. “We need to have these discussions with folks who work in the legal and consumer protection fields. However, I’m not overly frightened at this time. He and others point out that using neuroscientific methods to physically alter people’s brains without their consent is currently all but impossible.

Other modes of control, however, are subtle. The lack of transparency surrounding what goes on in neuroscience labs at huge corporations, notably tech behemoths like Facebook, Google, and Amazon, is Cerf’s main source of worry. For example, Facebook 2012 secretly changed almost 700,000 users’ newsfeeds to affect their mood states, drawing criticism for conducting experiments without users’ permission. If these businesses go bad, that’s what worries me, adds Cerf. “They are already hiring neuroscientists from my lab and those of others, but neither I nor other academics have much knowledge of what they are doing. When I warn people that we should all start panicking the moment a tech firm releases an EEG to link with their home-assistant device, I’m only half kidding.

Numerous start-ups in Silicon Valley are attempting to make certain medical procedures, including brain imaging, more flexible and affordable, even as marketers struggle with the moral complexity. A portable, reasonably priced fMRI would completely alter the field, claims Cerf. He and others assert that the pursuit of understanding consumers’ thoughts is still ongoing and moving quickly and that marketers should at the very least stay current with the underlying science. Brian Knutson declares, “I’m amazed at how far science has advanced in the last 15 years. We’ve advanced so quickly and far. And I truly believe that we are only beginning to scrape the surface.

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