1. The document discusses neuromarketing and the use of neuroscience techniques like fMRI to understand consumer behavior and brain activity in response to marketing and brands. 2. Several studies are summarized that found different brain regions activated based on factors like product prices, packaging attractiveness, and brand familiarity. 3. Controversies around neuromarketing are mentioned, with some arguing it is meaningless or could manipulate consumers, while the field is growing with many consultancies using the approaches.

1. You Should Get Your Head Examined Dr. Michael Minor UTPA September 30, 2008

2. What is Neuromarketing? Using neuroscience methods to analyze/understand human behavior in relation to consumption activities. Using fMRI and related techniques to understand what consumers do.

3. Why Get Involved with fMRI? Wife’s illness Interested in psychophysiological measurement potential Wang/Minor (2008) research, based on 2006 class assignment Drawn to lunatic fringe of research, anyway.

4. Measures as Function of Scale Large-Scale (100s, 1000s) Secondary Data Survey Small-Scale (<20) Qualitative Analysis, Ethnographic Studies, Focus Groups http:// www.pbs.org /frontline/shows/cool Mid-Scale (About 30) Psychophysiological Measures

5. Top Ten Psycho-Physiz Measures Central Nervous system Nonhemispheric Brain Wave Analysis (EEG) Hemispheric Lateralization (EEG, SSPT) Brain Imaging (fMRI, PET, MEG) Autonomic Nervous System (Organ Functions, Involuntary Control) Pupillary Response Electrodermal Analysis (GSR, SCR, EDA) Voice-Pitch Analysis Heart Rate Response (EKG) Vascular Activity (Blood Pressure, Pulse) Somatic Nervous system (Muscle Functions, Voluntary control) Facial Muscle Activity (Electromyography, EMG) Eye Movement

6. Basic Neuro Facts I Your brain is it, no other organ results in ideas. Human behavior is at some point biological behavior (Butler 2008). Different functions partitioned to various regions (controversial). Neurons communicate by electrical and chemical signals. We can track electrical (easy) and chemical (hard) signals.

7. Basic Neuro Facts II In humans, looking at regions of brain, not individual neurons. Study started with Phileas Gage and a rod through the brain. Basically a frontal lobotomy. Gage walked away but no longer Gage, not a nice person. Another case called H. M. still alive, but only has 30 seconds of memory. Fifty First Dates (Drew Barrymore character), Dory in Finding Nemo .

8. Brain Regions

9. Basic Neuro Facts III Hans Berger (1873-1941) started recording electrodes to scalp, the first EEGs (electroencepelograms). Important in study of sleep. Problems – Berger didn’t understand electricity. Can’t tie EEG to particular areas of the brain. Then CAT scans (developed about 1970). Glorified 3-D x-rays. Still doesn’t show activity but can see e.g. injuries. From there to PET scans in late 1970s, early 80s. Measures blood flow using radioactive oxygen, very indirect measurement, and can’t resolve events shorter than a few minutes.

10. Basic Neuro Facts IV Then breakthrough was fMRI. MRIs developed in 1970s but only showed structure, in 1990 AT&T developed (f) to measure events.

11. Christian’s Brain on fMRI

12. Our Story So Far <second Millimeters O2 Con-sumption fMRI Minutes Centimeters Blood Flow PET Scans Parts of seconds Surface Electrical Activity EEG IN.. SIZE MEASURES APPROACH

13. fMRI Measures BOLD (Blood Oxygenation Level Dependent) contrast.

14. What are you in?

15. … To Neuromarketing In 1990s, Gerry Zaltman began scanning brains for corporations. Zaltman and Stephen M. Kosslyn applied for a patent in 1998. This patent was actually issued eight years ago in 2000.

16. “ Results” of Neuromarketing Research Customer loyalty associated with activity changes in neural reward system (Plassmann et al. 2007) Excessive prices lead to changes in the nucleus accumbens (NCC) Attractive packages induce activity in areas related to visual attention, memory, and reward-related areas, unattractive packages change activities in areas associated with uncertainty, disgust, expected risk (Stoll et. al 2008).

17. Results II “ Big brand requires less brain work (top) than weaker one.” Abstract products like insurance can excite as much as cars. Christine Born study (2006). Kevin Helliker,”This Is Your Brain on a Strong Brand: MRIs Show Even Insurers Can Excite,” WSJ , Nov. 2, 2006, p. B1, B4.

18. Results III 78-80% accuracy in guessing what a person is thinking about (Wise 2007). DARPA funded research into “lie detector MRI.” “ No Lie MRI” firm in San Diego, California.

19. Results IV U. New Mexico – Recorded activity in Broca’s area after asking clients “to think of a word beginning with a letter flashed on a screen above their faces.” Thus - can reliably detect a single thought forming in an individual’s brain. 2003 – Read Montague at Baylor, Pepsi and Coke. Half liked Pepsi better. But when told were drinking coke, medial pre-frontal cortex of 75% “lit up like a Christmas tree.” Brand beats quality. (Meskauskas 2005).

20. “Buy Center” No one place in the brain.

21. Atlantic Monthly Correspondent Jeffrey Goldberg

22. More Goldberg

23. Yet More…

24. Rewarding…?

25. The Boss…

26. Va..Va..Voom

27. Controversies I fMRI is Meaningless – “… looking at a fireworks display and trying to deduce the reason for the celebration from the pattern of the display” (Fugate 2008 p. 172). fMRI is Sinister – Ralph Nadar, Consumer Alert – consumers can be induced to respond to marketing influences they aren’t aware of (Fugate 2008), generating “legions of consumer zombies controlled by omnipotent corporations,,, (Editorial 2008). Screening terrorists fMRI is Snake Oil – William Uttal – book on shortcomings of localization and fMRI, The New Phrenology (Wise 2007). Perhaps 100,000 studies using fMRI.

28. Controversies II Late August 2008 – inventors Zaltman and Kosslyn sell the “core patent” for neuromarketing to firm Neurofocus. Zaltman had stopped doing fMRIs and moved on to ZMET (Zaltman Metaphor Elicitation Technique) in 2000s. Did Zaltman find something better, or lose interest, or does he see a problem?

29. Future? 90 neuromarketing consultancies in U.S., more in Europe. Brighthouse Neurostrategies Group, Neurofocus, Neuroscience Marketing… University study Emory, Stanford, Harvard, Baylor in Houston… McDonald’s, movie studios, large banks, political campaigns have used it. ACR has new content area code for neuroscience Googling “neuromarketing” yields 800,000 hits.

30. Future: Improvements Scientists used a new type of brain imaging called diffusion spectrum imaging , along with mathematical analysis, to build a map of the cortical architecture of the human brain, shown here. The blue lines represent neural fibers connecting different parts of the brain. To make the map easier to understand, only the strongest connections are shown. Letters indicate anatomic subregions of the brain. Credit: Indiana University , University of Lausanne, EPFL Uses MR to track movement of water molecules in the brain.

31. fMRI Difficulties Must lie horizontal, perfectly still. $3,000-4,000.

32. Future: Rival Devices I EmSense , founded in 2004 to develop video-game controller. It tracks brain activity using a single electroencephalography sensor (EEG) at the forehead, as well as other sensors that monitor breathing rate, head motion, heart rate, blink rate, and skin temperature. Coke used EmSense to decide which of two commercials to use in 2008 Superbowl. Kate Greene, “Brain Sensor for Market Research,” Technology Review, Dec. 7, 2007).

33. Rival Devices II OTX Research, Innerscope Innerscope vest instead of a headset, measures heart rate, breathing but not brain waves. An NBC employee watching ads in fast-forward. Just as engaged as a regular speed. Steve McClellan, “Mind Over Matter,” AdWeek , February 18, 2008, pp. 16, 17.

34. Rival Devices III Neurofocus, EEG baseball cap Joint effort with the Neilson Co.

36. Rival Devices, Lunatic Fringe? Hypnosis for Focus Groups Brandvisioning, New York Qualitative and Quantitative Research, Laguna Hills, CA Avrett Free Ginsberg, New York One critic: “I have a particular venom for this area.”

37. Other Uses: CalTech/Baylor Trust Game I Colin Camerer: Decide to invest or keep up to $20. If invest $10, will triple in value: 2 nd player decides to keep it or pay it back. Both understand the rules. No enforcement: Pure trust, relies on moral obligation. Economic theory: No trust, no investment. But trust occurs. What areas of brain are active at what stage of the game.

38. CalTech/Baylor Trust Game II What about brains of entrepreneurs? Some easily risk large sums of money, others can’t. What about Warren Buffett’s vs. Jimmy Buffett’s brain? http://www.abc.net.au/rn/scienceshow/stories/2006/1595651.htm#

39. Warren vs. Jimmy: What’s Inside?

40. Future: Sources I Martin Lindstrom, Buyology , due October 21, 2008 . Neuromarketing study, 2000 customers across five countries. Smell, sound “much stronger than we ever thought.” Starbucks study (1) sour milk smell (2) clanking machines (3) tactile cup sensation Then (No. 4) coffee smell.

41. Future: Sources II My neuromarketing website www.baclass.panam.edu/neuromarketing