Neuromarketing

Neuromarketing
Communications and Leadership Conference
Western New England College
April 7, 2010

Agenda

Neuromarketing Defined

Controversies

Case Studies

Take Aways

Cautions on Applications

Western New England College | April 7, 2010 | Copyright © 2010 Bidwell ID, Inc. and Verilliance | 2

Neuromarketing Defined
Strict Definition: Measuring brain response to marketing ads.

Expanded Definition: Additional use of biometrics to include heart
rate, breathing rate, and galvanic skin response.

Loose Definition: Marketing tips/decisions based on neuroscience,
neuromarketing, behavioral economics, psychology, etc. knowledge
but not actual measures.


Neuromarketing Biometrics/Tools
EEG: Measures brain waves to determine what parts of the
brain are activated.

Eyetracking: Measures where a subject is looking.

fMRI
• Functional Magnetic Resonance Imaging.
• Measures brain activity in real time.
• Vastly more expensive and cumbersome than EEG, but gives
more accurate picture of the brain.

Measures what?
• Attention.
• Retention (memory).
• Emotion (positive vs. negative).

How Data Is Used
To determine what parts of an ad (still or moving) show
the highest engagement across the three measures:
attention, retention, and emotion.

Firms are also collecting proprietary data to determine
patterns. For example, one firm has seen that dark
backgrounds consistently result in lower engagement.


Controversy: Pseudo-science
Some claim neuromarketing is a pseudo-science because
there is a paucity of information sharing. This lack of
information is because:

• Private vs. academic. No requirement for peer review.

• Neuromarketing clients rarely release data or
results to the public. Concerns about negative
perceptions by consumers (mind-control, manipulation)
and giving knowledge away to competitors.

• Any “results” released to the public is in
reference to ROI, not comprehensive.


Controversy: Big Brother/Mind Reader
Books like Neuromarketing–Find Your Customer’s Buy Button
or Buyology can overstate findings to suggest to marketers that
neuromarketing can identify magic bullets.

Advocacy groups have been quick to believe neuromarketing
hype leading them to believe neuromarketing will lead to
consumer mind control.


Controversy: Ethical Concerns
Either of the above two theories regarding neuromarketing lead to
ethical issues.

• Should marketers have access to our unconscious minds?

• Should the technologies be limited to adult consumers?

• Who should determine standards and regulation?

• Should businesses be forced to disclose use?

• How can businesses be protected from faulty claims and large
expenditures of money?


The Truth
Lies somewhere in between. Neither pseudo-science nor mind control.
It is morally ambiguous and complicated.

Big business has already used marketing in harmful ways by targeting
the animal brain, particularly when selling addictive substances.

• Big tobacco.
• Alcohol.
• Big pharmaceuticals.
• Video gaming industry.
• Sex industry (sex sells when it’s selling sex!).
• Gambling.


The Truth
Neuromarketing has potential to advance what we know about
decision making much more quickly than academia.

Though not peer reviewed, ROI is a review process. Firms
or techniques that don’t work will be quickly discarded in favor
of results.

Neuromarketing has just as much potential for good.

• Education.
• Producing better products.
• Creating better usability and design.
• Use by social movements.
• Educating consumers about their own
irrational decision making.

Example: Campbell’s
Problem
• Need to sell more soup.
• Budget-conscious consumers have little tolerance for
price increases.

Goal
• Increase soup sales 2% over the next two years.


Studies
2-year study and over 1,500 subjects.

Various teams were brought in at different stages to
conduct different types of analysis, and each interacted
with the other to triangulate the data.

Multiple methodologies (triangulation)
• Focus groups are not enough.
• Traditional consumer feedback.
• Neuromarketing techniques.
• Deep interview process called ZMET (The Zaltman
Metaphor Elicitation Technique).
• In-store consumer behavior.
• Biometrics.

Example: Coca-Cola (vs. Pepsi)
Study
• Understand the cognitive processes behind the choice
between Coca-Cola and Pepsi.
• 67 people had their brains scanned while being given
the “Pepsi Challenge,” a blind taste test.


Findings
• Half the subjects chose Pepsi.
• Pepsi tended to produce a stronger response than Coke
in their brain’s ventromedial prefrontal cortex, a region
thought to process feelings of reward.
• When the subjects were told they were drinking Coke
three-quarters said that Coke tasted better.
• Their brain activity had also changed.
The lateral prefrontal cortex, an area of
the brain that scientists say governs
high-level cognitive powers, and the
hippocampus, an area related to
memory, were engaged.


Results
• While Pepsi’s and Coca-Cola’s success was similar in
blind tests, a strong bias toward Coca-Cola was found in
brand-cued tests.
• Demonstrated that Pepsi should have half the market
share, but in reality consumers are buying Coke for
reasons related less to their taste preferences and more
to their experience with the Coke brand.


Example: Frito-Lay
Situation
Marketing to women, who snack twice as much as men.

Research and Inferences
• Communication center in women is more developed, leading to
infer that women can process ads that contain more info.
• Hippocampus—the memory and emotional center—was larger,
and concluded women look more for characters they can
empathize with.
• Anterior cingulated cortex, which processes decision-making
was larger in women, so they are more susceptible to feelings
of guilt.


Example: Frito-Lay
Research
100 women kept journals for a couple of weeks—showing
women feel guilty a lot about a lot. Conclusion: we can’t
alleviate guilt, but we must be sure not to trigger it.

Marketing changes
• Tone down packaging: not shiny yellow,
but beige.
• Show off healthy ingredients.
• Cartoon ads with empathetic figures,
like animated Sex in the City. Only in a
Woman’s World series.
• Not girlie: no pink, no big calorie count.

Results?

Take Aways
Rules
Neuromarketing is not exempt from marketing good practices.
• Always triangulate.
• Context: audience, media, social climate.
• There will always be exceptions/outliers. Example: less is not
always more.


Take Aways
Keep it simple.
• Poor memory for detail.
• The “good idea”.
• Less really is more.
• Cognitive fluency.
• Tips for keeping it simple.

You don’t have much time.

Subliminal messages do influence.

Be aware of bias.
• Social validation.
• Confirmation bias.
• Hindsight bias.


Take Aways

Stories are how we remember and decide.
• Narrative is the foundation for both memory and decision making.
• Narrative overrides facts (refer back to Coke vs. Pepsi).

There’s no escape from stereotyping.
• The brain groups data, takes mental shortcuts.
• Men vs. women.
• The best marketing is not gender neutral—it speaks to both
genders.
• Taps into stereotypes in a transcending way
(i.e., Old Spice ad).


Take Aways

We’re wired for nostalgia.
• It’s good for our health and promotes positive feelings.
• The mind is predisposed to positive mood.
• Music is especially powerful.
• Nostalgia surges in tough times.
• Fake nostalgia works too.
• Tips for using retro to invoke nostalgia in your marketing.

Engage all the senses.
• Sound often ignored in marketing.
• Sound directly affects the brain and emotions.
• How to market with music.


Take Aways
Emotion brings recall and relationships.
• Emotional responses influence brand recall and liking.
• Positive emotions work best.
• Make sure the emotion fits the brand.
• Emotions interest, facts justify.
• Sharing emotion builds relationships.
• How to encourage customers’ emotional participation.


Cautions on Application
• As more proprietary data is gathered and released we can more
confidently apply findings.

• Much is still unknown.

• The brain is complex, and results in a lab may not hold true in
various real life contexts.

• Data from neuromarketing is still best used when triangulated
with more traditional data such as interviews, questionnaires, and
historical data.

• Level of engagement is the best predictor we have so far, but it
is imperfect. It is not a cause and effect. Engagement does not
guarantee conversion.


Contact Information

Jennifer Williams, Owner | Verilliance | www.verilliance.com/blog

John Bidwell, President | Bidwell ID | www.bidwellid.com


Neuromarketing

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