Where the Brain meets the Market
Written By: Gabrielle Bennett
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................................ 3
INTRODUCTION W/ HISTORY/BACKGROUND .............................................................................................. 3
Why is it important? ............................................................................................................................. 5
METHODS OF RESEARCH ............................................................................................................................. 6
Who is already capitalizing on it? ...................................................................................................... 7
Growth potential? ................................................................................................................................. 8
Future, Benefits & Issues ........................................................................................................................ 8
CONCLUSIONS ........................................................................................................................................... 9
WORKS CITED .......................................................................................................................................... 11
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Executive Summary
Everyday companies spend millions of dollars on advertising and marketing research.
We’ve all heard of traditional methods of market research but what if there was a more accurate
method of gaining customer intelligence and understanding consumer behavior. What if there
was a way try to predict consumers purchasing decisions. Well there is—“Neuromarketing aids
in decoding the processes that take place in the consumers mind in order to discover emotions,
desires, wishes and the hidden reasons behind why they make the decisions that they make.” But
where did this field of neuromarketing come from? Neuromarketing is the next generation of
market research and is developing more every day.
Introduction and Background
A marketing professor at Rotterdam School of Management at Erasmus University
named Ale Smidts coined the term ‘Neuromarketing’ in 2002 based on ideas from studying
neuroscience. Before we dive into next generation, let’s discuss the traditional methods of
market research. The most popular/ traditional methods of market research are surveying
consumers and using focus groups. According to NeuroFocus, each year, hundreds of thousands
of focus groups are organized around the world, and about $4.5 billion is spent globally on
qualitative market research. With both methods, researchers are depending on consumers to be
able to accurately express their opinions and also express the reasoning behind those opinions.
However, according to True impact people can’t easily express how they feel in real time
(second by second). It can be impossible to identify or remember specific emotions and people
aren’t always aware about what influences their decisions. There was a study done in 1999 by
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Adrian NoĤrth, David Hargreaves, and Jennifer McKendrick about the influence that music has
on your purchasing decision. The study was conducted over a two week period in a wine store.
The store would alternate French and German music on different days. On the days that French
music was played, the percentage of French wine sales increased and when German music was
played the percentage of sales increased for German wine. What’s really interesting about this
study is that when the customers were asked about the reason they purchased each specific wine
(from each region), the customers were completely unaware of how the music (and type of
music) influenced them. Most of the customers actually said that the music had NO effect on
their purchasing decision. . According to Ragans PR Daily “It’s not that numbers lie; people
do—or they mislead, at least, consciously or not. People are often wrong, inexperienced,
shortsighted, and biased. People bring unspoken agendas to the table, consciously or
unconsciously”. According to Lindstrom, 85% of our daily activity is un-conscious.
Another issue with creating questionnaires is that it can be a lengthy process. About 40%
time spent formulating the right questions. The process is time consuming and you want to make
sure the question doesn’t influence the answer. Let’s take a look at Walmart’s “Project Impact”.
In 2009 Walmart used traditional market research and surveyed their customers about how they
felt about the Walmart stores. The customers responded by saying that the stores seemed to be
cluttered with too many products and hard to navigate so Walmart made a plan for Project
Impact. Project Impact was intended to reduce clutter, make the jammed aisles easier to navigate
and improve the overall look of the stores. But when Walmart began to implement Project
Impact at 600 of their stores sales suddenly declined. Walmart re-surveyed their customers and
results showed that the customers wanted more product. In the end, Walmart decided to ‘go
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back’ to the amount of product that was carried before Project Impact and sales began to rise
again. In all, it seems like Project Impact was a $2 Billion dollar waste of time.
Why is this field important to marketers or in general?
So what differentiates neuromarketing from tradition market research, how could
neuromarketing be better? In order to truly understand neuromarketing, we have to understand its
history. Looking deeper into emotional research, Antonio Damasio started to look into emotions
and decision-making research and his research has helped to clarify the neural basis for the
emotions and has shown that emotions play a central role in social cognition and decisionmaking. Ale Smidts (as mentioned earlier) coined the term Neuromarketing and continues to
study this method today. According to True impact, emotions shape your opinions by shaping
your behavior”. Emotional measurement break down into the following market indicators:
purchase intent, perceived product value, emotionally salient features, right pricing strategy,!`
attention activation of design, uniqueness among competitive displays, strength of brand
reputation and compatibility with brand.
Neuromarketing focuses on studying the emotions and unconscious reasons that people
make certain purchase decisions by studying physiological responses in the brain and body as
well as by using questionnaires. Karmarkar says. “Studies have shown activity in that brain area
can predict the future popularity of a product or experience”. Mediasauce describes the brain as
being broken into 3 sections; the new brain, the middle brain and the reptilian brain. The new
brain is built to process facts figures and data. The middle brain is where we feel and process
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emotions. The reptilian brain is fully subconscious, it operates purely to help us survive. It is also
the core of decision making.
Methods of Research
Neuromarketing uses brain imaging technologies such as Electroencephalography (EEG)
and Functional magnetic resonance imaging (FMRI). Other tools are used in this method of
research including; eye tracking, GSR and facial coding. EEG measures the surface of the scalp
with electrodes. The electrical waves produced by the brain track emotions (such as excitement,
sorrow, anger, etc.) through fluctuations of activity. EEG readings are instantaneous and
neuromarketers can track electrical waves as they relate to emotions, memory and attention from
specific areas of the brain. Once the brain waves are collected, complex algorithms can sift
through the data to connect each reaction to a specific moment. One issue with EEG is that it
only measures on the surface and cannot reach the pleasure center in the brain.
FMRI tracks brains blood flow as subjects respond to audio and visual cues. The more
desirable something is, the more significant the changes in blood flow in that part of the brain.
The resulting blood-oxygen-level-dependent, or BOLD signal is what allows neuromarketers and
Researchers to know which brain regions are responsible for processing an image of a preferred
shirt color, or emotional response to a song heard during a commercial. Radio pulses can be sent
every one or two seconds, which provide an output of multiple images that can be analyzed for
changes in BOLD signal over time. Some of the benefits of fMRI include the great resolution
that is provided from resulting images, and that unlike scalp recordings from EEG, fMRI can
obtain information from areas deep within the human brain which process emotion and
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automatic reflex responses. Galvanic Skin response (GSR) is defined as “A physiological
measure based on the face that skin's ability to conduct electricity changes in response to an
emotional stimulus like fright anxiety or stress”. Using GSR allows researcher to monitor and
measure stress levels, fear, anger and anxiety levels while exposing them to marketing material
and market research questions. In addition to this, GSR can be used as a method of lie detection
to assist in ignoring inaccurate responses. Eye tracking can be used by analyzing a participant’s
gaze pattern in order to determine their cognitive state. The eye movements observed may reveal
if the participant is distracted, confused or involved. Information gathered using these methods is
more reliable and in real time. Neuromarketers and researchers can use this information to
increase brand performance, improve memorization of publicity messages, maximize the impact
of publicity, improve TV commercials, and operationalize the branding. Because this method of
gathering information is more reliable, companies are able to ‘cut down’ on their advertising
budgets by being able to more accurately predict success with ads vs. using a method of trial and
error.
Who is already capitalizing on Neuromarketing?
A number of companies have decided to use the neuromarketing method and are
benefitting including Proctor and Gamble, Motorola, Buick, Delta airlines, Google, Microsoft,
Disney, yahoo, Hyundai and Frito-Lay. One of the most recognizable campaign is the Frito-Lay
campaign for Cheetos. In 2008 Frito-Lay decided to hire a neuromarketing firm to look into the
consumer response of Cheetos. They used EEG technology on a group of subjects and contrary
to what I expected- the subjects responded strongly to the fact that eating Cheetos turns their
fingers “orange with residual cheese dust.” “The EEG patterns indicated a sense of giddy
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subversion that consumers enjoy over the messiness of the product.” After receiving this data,
Frito-Lay decided to move ahead with a campaign they called “The Orange Underground” where
Chester the Cheetah “encourages consumers to commit subversive acts with Cheetos. (In one
commercial, an airline passenger quietly sticks Cheetos up the nostrils of a snoring seatmate.
Problem solved.) The campaign garnered Frito-Lay a 2009 Grand Ogilvy Award from the
Advertising Research Foundation.
Growth Potential
Being that this field is so new and cutting edge, there is A LOT of growth potential. New
devices continue to be developed. Some companies invented a smaller more portable devices (for
EEG specifically). One company in particular created the Mynd which is currently being used by
home panelists across the country. These panelist are paid to wear these EEG devices as they
shop, watch TV and do other daily activities. “The firm will collect the resulting streams of data
and use them to analyze the participants' deep subconscious responses to the commercials,
products, brands, and messages of its clients. NeuroFocus data crunchers can then identify the
products and brands that are the most appealing (and the ones whose packaging and labels are
dreary turnoffs), the characters in a Hollywood film that engender the strongest emotional
attachments, and the exact second viewers tune out an ad“. Also, the neuromarketing Science
and Business Association was established just last year as the very first association to bring
specialists together from around the world.
Future, Benefits and Issues
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From looking at the research, it seems like neuromarketing could be too good to be true.
Neuromarketing benefits marketers by giving them a more reliable option for research and
benefits consumers by being able to appeal to their needs/wants. Although there are many clear
benefits, there are issues as well. One issue with the EEG equipment is that it only measures
surface of the scalp and it cannot reach the pleasure center. One issue with FMRI is that it’s
extremely expensive every time it’s used. Also, the subjects have to lie completely still in a big
machine that makes a lot of people uncomfortable, especially those who are claustrophobic.
Neuromarketing also faces some issues with future growth from consumers who are worried that
this type of research is sneaky. For consumers, the idea of giving advertisers additional insight
into the subconscious mind might prompt privacy concerns. Consumers are worried that
neuromarketers would be able to control someone and “push a magic buy button” in consumers’
brains. In particular Gary Ruskin of Commercial Alert (anti-marketing activist) has waged a
campaign against the practice, lobbying Congress and the American Psychological Association
(APA) and threatening lawsuits against one neuromarketing firm and other practitioners. He says
it could eventually lead to complete corporate manipulation of consumers -- or citizens, with
governments using brain scans to create more effective propaganda.
Conclusion
In my opinion, consumers don’t need to worry about being ‘brainwashed’ just yet.
Increased activity in the brain doesn't necessarily mean that individuals won’t be able to resist
the urge to buy every product on the market. No amount of neuromarketing research can
transform otherwise rational people into consumption-driven aliens. Consumers are constantly
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influenced by the various messages around them but that doesn’t take away their freedom of
choice. Neuromarketing is a tool that can truly benefit the companies that decide to use it and
consumers can’t let fear stop them from keeping their minds open to the world that continues to
grow around us.
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