1. Neuromarketing: The Basics

2. • We are exposed to over 2 million
ads during our lifetimes
• $8 billion dollars was spent on
market research in 2006
• Expressed attitudes on surveys
and focus groups are easily
influenced by peer pressure and
not always a good predictor of
actual decisions or purchase behavior
• Over 50% of all purchasing decisions by customers are made
spontaneously (unconsciously) at the point of sale
• There are over 90 neuromarketing consultancies that work with Coca
Cola, General Motors, Home Depot, General Mills, Proctor and
Gamble, Eastman Kodak, Bank of America, and Nestlé.
It’s only business

3. $1000/hour
Functional magnetic
resonance imaging, or fMRI,
works by detecting the changes
in blood oxygenation and flow
that occur in response to
neural activity – when a brain
area is more active it consumes
more oxygen and to meet this
increased demand blood flow
increases to the active area.
FMRI can be used to produce
activation maps showing which
parts of the brain are involved
in a particular mental process.
• It is non-intrusive, and entirely passive
• Its temporal resolution enables causal
connections between continuous stimuli
and responses
• It is scientifically robust
• It is fast
• It is low cost
• Consumers like it
• Recordings can be obtained in a
naturalistic environment
MindSign Neuromarketing

4. Neuromarketing guru: Martin Lindstrom
Starting in 2004, Martin
Lindstrom and Oxford University
researchers began a $7 million
study of more than 2,000
people. They studied brain
activity when exposed to
product placement, subliminal
messages, brand logos, health
and safety warnings, and
provocative product packaging.
Presented in his book, Buy-ology,
Lindstrom argues that almost
90% of customer purchasing is
driven by unconscious
processing
Buy-ology Overview
Book Brief (6:36”)
Neuromarketing Conference

5. Examples of EmSense Company marketing research

7. Eye Tracking & EEG: Where
do eyes fixate and what do
they trigger?

8. Eye Tracking
Heat mapping shows
where the eyes are
repeatedly drawn
Gaze plots shows the
order of eye fixations to
better identify search
patterns

9. Bing Google• No differences on
informational searching, but
different on transactional
searches (e.g., booking trip)
• For sponsored links, ~42%
for Bing and ~25% for
Google
• Bing’s related searches on
left attracted 31% Ss during
search, Google only 5% of
related searches
• Bing’s left categories got
more attention (50% even
selected them), than
Google’s flyouts
So, what’s the big deal?

10. http://www.sutherlandsurvey.com/Column_pages/Neuromarketing_whats_it_all_about.htm

12. Order effect
affects orders–
so much for logic
http://www.futurelab.net/blogs/marketing-strategy-innovation/2009/09/order_effect_affects_orders.html
• A study by Alexander Felfernig et al., tested web buying behavior by
presenting a series of tents in a different sequence to see which order
was most effective. Each tent had unique characteristics.
• What they found was that rather than sequencing, it was first in order
that was most important. The first presented tent was chosen 2.5
times more often than any other.
• Although people would always come up with some explanation of
their choices, the first was preferred in any rearranged sequence.

13. Hey, that feels good!:
The brain’s pleasure circuit
When a reward is anticipated or
received a signal is sent to the
Ventral Tegmental Area (VTA) that
activates and releases dopamine to
the nucleus accumbens, septum,
amygdala, and prefrontal cortex.
When people are exposed to a stimulus
(product, message, etc.,) the brain reacts
spontaneously, usually outside our
conscious awareness, and reflects our
attentional and emotional predisposition

14. Nucleus accumbens:
part of the
dopamine pleasure
circuit involved in
reward anticipation
• A study at Carnegie Mellon University presented participants with $20 to
spend on a range of 80 products that, if they bought any of them, would be
shipped to them. If they made no purchases they would keep the money.
• For each item the nucleus accumbens (anticipation of reward) and insula
(anticipation of risk) were monitored ; the relative activity reflected the
perceived gains and losses
• The activation was a good predictor of actual purchases
Knutson, B., Rick, S., Wimmer, G. E., Prelec, D., & Loewenstein, G. (2007). Neural predictors of purchases.
Neuron, 53(1), 147-156.
Purchase decision– weighing benefits and risks
Anterior Insula:
associated with risk
aversion; activation
involves loss
prediction, pain,
anxiety, disgust;

15. I feel your pain…but
not as much as you do
In 2007 Sprint advertised a
“special deal” for new customers.
While this may have been
attractive to new users, it angered
and alienated their current loyal
customers.
Paying $99 dollars rather than
$250 set off the brain’s reward
circuit for new customers, but
conversely activated the pain
circuits!
http://www.neurosciencemarketing.com/blog/articles/how-to-increase-customer-pain.htm

16. Mirror neurons: Monkey see, monkey do
(or, “you’re fine, how do I feel”)
• Newborns as young as 72 hours old can
imitate some facial expressions
• A mirror neuron is a neuron which fires both
when an animal performs an action and when
the animal observes the same action
performed by another
• mirror neurons have been found in the
premotor cortex (motor behavior) and the
inferior parietal cortex (distinguishing
self/other)
• These appear to be involved in understanding
intentions of others, empathy, predicting
actions of others, and social bonding (e.g., “I
want what you have…”)

17. • Paul Slovik at the University of
Oregon studied the emotional
basis of donations
• He presented Ss with pictures of
sad and malnourished children
with the result of each person,
on average donating $2.50 to
Save the Children
• Alternately he provided Ss with
considerable statistics about
starving children– more than 3
million starve in Malawi, 11
million in Ethiopia, etc. However
the donation was 50% lower
• Statistics don’t activate our
moral emotions
Animal Allies Ad

18. • The average American spends 35 hours comparing
automotive models before making up one’s mind
• Ap Dijksterhuis at the University of Amsterdam had
Ss choose the best car among four used cars rated
on four categories, for a total of 16 bits of
information (e.g., mileage, transmission, sound,
handling, etc.). More than 50% chose the best car
• Then he got four cars with 12 categories resulting in
48 separate pieces of information. The result was
that Ss now chose the best car less than 25% of the
time (focusing on variables that don’t matter?)
• He developed a “complexity score” for a variety of
consumer products. More time on decisions led to
lower satisfaction; they did better when they
thought less and responded to their emotions
(unconscious preferences)
http://www.sciencemag.org/cgi/content/abstract/311/5763/1005
Thinking more and enjoying it less?

19. • In a 2005 study, researchers placed a lemon-scented
cleaning fluid in a bucker of warm water hidden behind
a barrier. Half of volunteers sat in the scented, and half
in unscented room. They were asked what they planned
to do that day
• 36% of Ss in the scented room listed an activity related
to cleaning, while only 11% did in the unscented room
• Another group were given a messy crumbly cookie to eat . Hidden camera
recorded those in the scented room were more fastidious.
• None of the groups were aware of the influence of scent on their behavior.
• Light floral scent was pumped into one room and not another where Nike
running shoes were shown. 84% Ss preferred the same running shoes they’d seen
in the floral room, and estimated that they were $10 more expensive
• Grass fragrance was sprayed into a home improvement store. 49% of all
customers surveyed before and later said the staff appeared to be more
knowledgeable about the store’s products
Sensory Branding: Makes scents…
Pepsi sensory branding ad

20. Does sex sell?
• About 1/5 of ads uses overt sexual content to sell
its products; it needs to be related to the product
• Ss shown sexually suggestive ads are no better at
recall of brand names & products (only about 10%
of men and women) than Ss who have viewed
unerotic ads
• The sexual content sometimes actually eclipses the
product & interferes with ad effectiveness
• Sex in advertising does not sell as much as the
controversy over it
• Women felt more negative about extremely
attractive models, and more positively about
wholesome ones
• Mirror neurons likely explain when the ads work
• Twice as many people buy products related to
“love” than to sex
• As we become desensitized to sex, they will shift
from explicit to subtle

21. • Brief exposure to images of smiling or frowning faces for as short as
16 milliseconds
• Ss did not consciously feel more positive or negative following the
expressions, but…
• Smiling doubled the amount of money people are willing to spend
on a beverage (twice as much as for frowning).
• They also poured significantly more drink from a pitcher and drank
more
Smile at your
customer!
(and server)
http://www.neurosciencemarketing.com/blog/articles/smiles-boost-sales.htm

22. Subliminal ads & the brain
Bush “rats” ad against Gore
• In 1957 James Vicary started an outcry against
manipulative advertising. He claimed to have
increased sales of popcorn and Coca Cola by inserting
frames with a message flashed so fast that viewers
could not see it consciously, but were still influenced
to buy.
• Over 200 studies failed to replicate the study, and
Vicary finally admitted that he fabricated the story.
• Nonetheless, Vance Package with “Hidden
Persuaders” book, and others, fed the concern
• Subliminal promotions only seem to work when it is
related to a person’s current needs and goal seeking.
It may have a “priming effect” by making it easier for
a person to notice other related cues.

23. Negative Political Ads– do they
work, or are they just revolting?
Top 10 Negative Political Ads (video clips)

24. • 30 Ss, men & women, democrat & republican
randomly assigned to 2 groups
• Obama Treatment group watched 4 ads emphasizing hope & positive
outcome from Obama, and four ads by McCain emphasizing fear & negative
outcomes if Obama were elected.
• McCain Treatment group– reverse of the above
• Task: Ss had to identify the “real” Obama & McCain in the ads from look-
alikes
• Images were preceded by subliminal positive words (“leader, honest,
winner”) and negative words (“Loser, risky, danger”), or neutral
• If they had a positive view of a candidate the positive priming would facilitate
facial recognition, while negative priming would inhibit recognition (and vice
versa if they had a negative attitudes toward the candidate)
• The real question was how much hope and fear appeals affected recognition
and therefore micro-attitudes about candidates
The study
Facial coding in presidential campaigns (2:53”)

25. Brain worms and sticky music:
“I just can’t get you outta my mind”
• Nearly 98% of people have had tunes
stuck in their heads: lyrics stuck 74%,
commercial jingles 15%, instrument
tunes without words 11%
• Episodes last over an hour and are
frequent for 62% of young adults
• They tend to irritate & annoy women
more than men
• Nonetheless, they tend to prime the
brain for product recognition after we
may have forgotten the source
http://www.business.uc.edu/earworms/
Chili’s (Baby Back Ribs)
Who Let the Dogs Out?
We Will Rock You
Kit-Kat bar jingle
Mission Impossible Theme
YMCA
Whomp, There It Is
The Lion Sleeps Tonight
It’s a Small World After All
Head-on commercial
Head on revised
HTC commercial

26. http://lucidsystems.com/blog/2009/03/our-study-of-hope-and-fear-in-political-advertising-released/
As expected, after viewing
ads, Ss were more responsive
to their preferred candidate,
and less to the other. Also paid
less attention to the “other”
after viewing negative ads
More
activation
Less
activation
But…
Negative ads also subtlely
diminished their
responsiveness to their
preferred candidate as well

27. How to pour a Guinness: How to change
the emotional meaning of an act
• In the early 1990s Guinness was facing losses in pubs
because customers did not want to wait 10 minutes
for the beer head to settle.
• The company redefined the inconvenience:
• “Good things come to those who wait”
• It takes 119.23 seconds to pour the perfect pint”
• Commercials showing the “right” way to pour
• “We don’t want just anyone putting liquid in a
glass”

28. • With all these adverse ad campaigns,
why have global consumers
continued to smoke over 5.7 trillion
cigarettes annually?
• About a third of males smoke
globally
• 15 billion cigarettes sold daily (10m a
minute)
• Smoking related diseases affect
438,000 Americans annually

29. The brain scans revealed
increased brain activity when
exposed to cigarette packs as
well as the Western imagery
in a small region of the brain
called the nucleus
accumbens, which controls
pleasures and addictions.
However, the unbranded images
(e.g. cowboy) activated more
cravings among smokers than the
branded images (e.g. cigarette
packs).
When people aren’t consciously
aware they are being exposed to
advertising message, they let their
guard down.

30. • Cigarette warnings, no matter
how gruesome, actually
stimulated the nucleus
accumbens (“Craving spot”)
• Overt, direct, visually explicit
antismoking messages did more
to encourage smoking than any
commercial promoting smoking
could have
• Subsequent studies with subliminal images only related to cigarette
commercials elicited the same responses as the actual commercials
• In 1997 a British tobacco brand, Silk Cut, was portrayed against a purple
silk background in every ad. Following an advertising ban, billboards only
showed a logo-free swath of purple silk. 98% of consumers identified the
BB related to Silk Cut although the could not say why

31. • In 2004 P. Read Montague of Baylor College of
Medicine conducted a fMRI on 67 people
repeating the Coke Pepsi Blind Taste Test.
• Following tasting of each drink, the reward or
pleasure centers of both groups of subjects lit
up and showed about equal preference for the
two brands
• When the test was repeated and participants
were told which brand they were drinking, 3
out of 4 said they preferred Coke over Pepsi.
• In addition to the pleasure centers, the
memory regions of the medial prefrontal and
hippocampus showed broad association to
Coke
• Experience with ads, images and experiences
with Coke were so powerful that the
associations and memories overrode the
actual taste of Pepsi…again.

32. Cordless
Trackball
Cordless
Keyboard
1998 Cotes du
Rhone. “Received
86 points from
Wine Spectator,
flavor of red berry,
mocha, and black
chocolate; medium
bodied, medium
intensity, nicely
balanced red”
SSN$ _____
Yes / No
Bid _____
Popular
Design
Book
1 lb box Belgian Chocolates
by Neuhaus
Last 2 digits of SSN: ____
SSN$ _____
Yes / No
Bid _____
SSN$ _____
Yes / No
Bid _____
SSN$ _____
Yes / No
Bid _____
SSN$ _____
Yes / No
Bid _____
1996 Hermitage
Jaboulet La
Chapelle. “92-
point rating from
Wine Advocate,
Finest La
Chapelle since
1990, only 8,100
cases made”
SSN$ _____
Yes / No
Bid _____

33. Range of last two digits of SSN
Products 00-19 20-39 40-59 60-79 80-99 Correlations
Cordless
Trackball
$8.64 $11.82 $13.45 $21.18 $26.18 .42
Cordless
Keyboard
$16.09 $26.82 #29.27 $34.55 $55.64 .52
Design book $12.82 $16.18 $15.82 $19.27 $30.00 .32
Neuhaus
Chocolates
$9.55 $10.64 $12.45 $13.27 $20.64 .42
1998 Cotes du
Rhone
$8.64 $14.45 $12.55 $15.45 $27.91 .33
1996
Hermitage
$11.73 $22.45 $18.09 $24.55 $37.55 .33

34. • Once people are willing to pay a certain price for one
product, their willingness to pay for other items in the
same category is judged relative to the first price
(anchor) (e.g., pay more for keyboard than trackball).
• Initial prices are arbitrary and can be influenced by
responses to random questions. But once established
in our minds, they shape what we are willing to pay for an
item and related items.
• Implication: What is the purpose of manufacturer’s suggested
retail price (MSRP) for cars, lawnmowers, and coffeemakers,
or real estate’s statements on local housing prices?
• Just a price tag is not an anchor– but if we buy or seriously
think about buying, the decision becomes out anchor for that
category.
• Example: people who move from one city to another remain
anchored to the prices they paid in the former city. They
don’t adjust their spending to fit the new market.
Ariely, D. (2008) Predictably irrational. Harper Collins, New York.

35. Iowa Gambling Task:
The brain knows before you do
Task: Choose a card to win game money.
Decks vary in payoff: some pay constant
low reward, while others pay high but
also have large penalty.
• People have to turn over about 50 cards before they switch to a profitable deck
• It took up to 80 cards for people to be able to explain why certain decks were
favored
• Physiological monitoring showed that Ss showed signs of tension after only 10
cards, when they unconsciously began noticing “bad” decks.
• With increasing failure the dopamine levels began to drop
http://www.millisecond.com/download/samples/v3/IowaGamblingTask/default.aspx

36. “What I tell you three times is true” (Lewis Carroll)
The Frequency-Validity Effect
• If false information is repeated often enough, we
begin to believe it
• Over time when people remember the core piece
of information but not the details, they tend to
think of it as true
• If repeated false information goes unchallenged,
be finally accept hearing it and therefore become
primed to accept it
• The more we hear it, the more we think there
must be something to it
• It tends to be most effective for positive points,
when brief, with periods of delay, and strongest for
the first 10 exposures
(Brown & Nix, 1996)

37. So what?...
• Popularity of brain research applications in many fields is growing
rapidly
• There is some interesting evidence of brain processes reflecting
consumer behavior
• Some critics strongly question the evidence, accuracy, and
methodology
• Ethical issues are just beginning to emerge
• Competition will continue to drive exploration of methods that may
provide advantage
• Promotion of neuromarketing has become a promotable business in
itself

38. Current Status
Advertising Research Foundation (ARF)
NeuroStandards Collaboration Project conducted an
examination of several methods. It concluded that
more research is needed; that while there are
important insights, results are not definitive.
• As a business, it may engage science to
adopt it
• It must be simpler & reduce “noise”
• Its quantitative and qualitative methods
must be combined with other methods
• Utility will be based on broad samples and
populations (may not be as applicable for
individuals)
• Combining methods of monitoring may be
more useful and accurate
Review of the conference
Stop Neuromarketing! (7:34”)
Beware Neurobunk (11:18”)

39. The Ethics of Neuromarketing
Private research that promotes NM does not require peer review, results
are proprietary, results are usually framed in ROI not comprehensive, and
promises exceed evidence.
• Should marketers have access to our unconscious minds?
• Should the technologies be restricted to adult consumers?
• Should businesses be required to disclose use?
• Would you use NM? Why or why not?
• How can businesses be protected from faulty claims and large
expenditures of money?

40. “Dr. Swenson, may I be excused? My brain
is full.”
Cola Wars