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Neuromarketing

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Within the skull lies the most complex organ known to mankind -- the human brain. With a mass of only 6 kilograms, the brain contains over 100 billion living cells and 1 million kilometers of interconnecting fibers; but, exactly how does it function? Marketing and sales managers would love to know why consumers are attracted to certain advertising, packaging and brands. Martin Lindstrom, author of Buyology: Truth and Lies About Why We Buy, explains the marketing challenge, “When we walk down an aisle in a grocery store, our purchasing decisions are made in less than four seconds…there is no way we can think about that in a complete way. Those decisions take place in the subconscious part of the brain” (2008).
The drive behind neuromarketing is to discover how consumers are actually responding to marketing messages, not how they report they are responding, or will respond. Neuromarketing studies consumers' response to marketing stimuli and matches that response to different areas of the brain. This research will explore neuromarketing history, levels of the brain, neuroimaging techniques used, advertising effectiveness of neuromarketing and some challenges facing this new field.
History
In 1991, Dr. David Lewis-Hodgson, Minilab chairman and director of research, began Neuromarketing research in the United States, after stumbling upon it when he was researching treatments for phobic anxiety and stress (Lewis, 2010). Shortly after, marketers from large companies such as Coca-Cola, Levi-Strauss, Ford and Delta Airlines became interested in these findings and created research labs specialized in neuroscience. These companies were very interested in how the brain was affected by media stimuli. In 2001, Bright House Neurostrategies Group was among the first to market commercial studies fundamentally on neuromarketing. However, the actual term, “neuromarketing”, was not coined until 2002 by Dr. Ale Smidts, Professor of Marketing Research, at the Rotterdam School of Management. Word spread to Baylor Medical School in Houston, where, in April of 2004, they organized the first international symposium dedicated to the use of marketing in neuronal imagery (Lewis, 2010).
Branding the Brain
Three Brains One Decision Maker
Figure 1 As Figure 1 illustrates, our brain can be categorized into three parts: The old, middle, and new Brain. The new brain thinks and processes rational data. The middle brain processes emotions and gut feelings. The old brain takes into account the input from the new and middle brain and ultimately is the part of the brain that triggers the decision. The old brain is our “fight or flight” instinct; it is also referred to as “the reptilian brain”, because it still exists in reptiles today. “According to leading neuroscientist Robert Ornstein, our old brain is concerned solely on survival, as it has been for millions of years” (Renvoise & Morin, 2007). Essentially, neuromarketing is trying to figure out what the consumer’s old brain wants or perceives to need. “Much evidence now indicates that the old brain is the main switch determining what sensory input will go through the new brain, and what decisions will be accepted” (Renvoise & Morin, 2007).
Six Stimuli There are six stimuli that the old brain comprehends. First of all, the old brain is self-centered. Its only concern is its own well-being and survival. A marketer’s message should be 100% on the target audience. The consumer must hear what will be done for them before they will listen. Secondly, the old brain is sensitive to contrast, such as risky/safe hot/cold, fast/slow. The brain is hard wired to proactively scan the surroundings for disruptions or changes of state. These disruptions signal important clues as to what is going on in the environment. The old brain does not like to “think” about making a decision. “Avoid using neutral statements such as “we are one of the leading providers of…” (Renvoise & Morin, 2007). The old brain needs tangible input; it is constantly scanning the environment for what is concrete or recognizable. The old brain also has a short attention span. It likes beginnings and endings and tends to drop the information in the middle. Therefore, placing the most important context in the beginning and restating it at the end is a must to grab the consumer’s old brain’s attention. The fifth stimulus is visual. The old brain is very visual; this may be because the optic nerve is directly connected to it. “About 70% of the body’s sense receptors are in our eyes. To a large degree, we understand our world mainly by looking at it…we have evolved to put our visual senses at the top of our sensory hierarchies, and therefore, visual components tend to trump all others” (Pradeep, 2010). The old brain reacts to an object before your new brain physically recognizes the object. The last stimulus is emotion. When consumers experience strong emotions like happiness, sadness, anger or joy, a flood of emotions rushes into their brain and impact the synaptic connections between the neurons making them faster and stronger. As a result, consumers will remember events better when they have experienced them with strong emotions.
Analyzing Neuroimaging Techniques In order to measure the brain effectively, neuromarketers use the latest technology that assess the brain’s activity most accurately. Although there are apparently many techniques that scientists propose, only a few have stood the test of time and are being used most widely. The three techniques are Electroencephalogram (EEG), Functional Magnetic Resonance Imaging (fMRI) and Biometrics.

Electroencephalogram (EEG)
Figure 2 EEG is the most widely used technique that has been around since the 1920s. EEG measures and records the electrical activity of the brain. Scientists put a cap on a test subject’s head, which has sensors that measures different activities such as memory, attention and emotion (see Figure 2). The subject then watches an advertisement for a short period of time. The sensors pick up electrical activity from the brain which gets recorded as data. Once the information is recorded, scientists analyze the data and find what aspects of the advertisement enticed the most attention, memory and emotion, which is exactly what advertisements are meant to enhance (Burkitt, 2009). This information allows marketers to see what parts of advertisements are most effective. For example, Hyundai wanted to know what consumers think about a new car it was planning. Thirty men and women studied a sporty silver test model of a 2011 Hyundai. The 15 men and 15 women were asked to stare at specific parts of the vehicle, including the bumper, the windshield and the tires. “Electrode-studded caps on their heads captured the electrical activity in their brains as they viewed the car for an hour. Their brain activity showed preferences that could lead to purchasing decisions” (Burkitt, 2009).
Functional Magnetic Resonance Imaging (fMRI)
The first marketer to use fMRI was Gerry Zaltman at Harvard in 1999; fMRI is similar to EEG in that it measures the brain activity and pinpoints what parts of the brain light up when positive emotions are being expressed. “In this imaging technique, harmless magnetic fields and radio signals are used to measure blood flow in regions of the brain, with such flow indicating brain activity levels” (Hardman, 2004). fMRI requires a large machine rather than a cap put on test subjects’ heads, and is therefore more expensive to use. DaimlerChrysler showed pictures of their cars in an fMRI scanner to study how consumers perceive their cars. “They found that sports cars stimulated the ‘reward’ centre of the brain, which is also reportedly stirred by alcohol, drugs and sex. The front view of these cars lit up the area of the brain that handles faces (headlights like eyes)” (Sutherland, 2007).
Another example is when researchers repeated the famous Pepsi/Coca-Cola blind taste test. “The researchers scanned the subjects' brains using fMRI. In the experiment, sips were preceded by either ‘anonymous’ cues of flashes of light or pictures of a Coke or Pepsi can” (Hardman, 2004). While the subjects were not made aware of which beverage they tasted, the subjects seemed to favor Pepsi with revealing activation of the “reward” center of the brain. However, when the subjects were aware of the beverage they tasted, they favored Coca-Cola with activity in the emotion and memory parts of the brain. This led researchers to realize that a preference for Coca-Cola is led more by brand image than taste itself (Hardman, 2004).
Biometrics
Biometrics is an overall term that represents measurements of physiological responses in the body. It measures things like downstream biological activity, such as Galvanic Skin Response (electrical resistance in skin), heart rate and the tension in skin muscles. Campbell’s Corporation used biometrics to help them develop a new appealing soup can label. Over the course of two years, Campbell's videotaped 40 random customers in their homes and while shopping for soup. They showed the subjects video of themselves shopping, all the while measuring the moisture of their skin, their heart rate, pupil dilation, posture, breathing pace and a range of other involuntary body functions. Using the results of this research, Campbell's believes they have designed a can label that will cut straight to the consumer's old, lizard brain (Sutherland, 2007).
Measuring Advertising Effectiveness of Neuromarketing
Now with all the information that has been gathered from the various types of neuroimaging devices, marketers have to turn those results into a logo design or product display that will grab the interest of the consumer.
Product Appeal
Product appeal is one of the main factors leading a customer to make a purchase. One might think that a bigger, brighter or more colored logo or box display will have the “WOW factor” in the consumers’ eyes, but studies show the exact opposite. A study was done by one of Oxford’s brightest neuroimaging scientists, Gemma Calvert, where subjects were hooked up to fMRI machines and were shown non-explicit related images of cigarettes (Lindstrom, 2008). The subjects consisted of smokers, former smokers and people considering smoking. They were first shown images of non-explicit images such as a red Ferrari and a cowboy on a horse. Next, they were shown images of different logos and mascots of various cigarette brands. The results were fascinating; when smokers were exposed to the non-explicit images associated with cigarettes, there was immediate activity in the craving regions of their brains. These non-explicit images triggered more cravings among smokers than the logos or the images of the cigarette packs themselves (Lindstrom, 2008). Thus meaning that ads, commercials or box displays, which do not display their logos, are more attractive to consumers than the logos themselves.
Brand Selection
What can be done to entice the customer to choose a certain brand as suppose to others? Having a consumer select a particular brand is a big commitment and can possibly lead to a lifetime one. Studies have shown that emotions are deeply tied with brand names and that the strong, positive emotions create brand loyalty (Lawton & Wilson, 2010).
Figure 3
The famous Coke vs. Pepsi taste test, which was presented above, is a great example of brand loyalty, because tasters preferred the Pepsi taste when they blindly tasted it, but when they were told which one was Coke, their answers changed. Amusingly illustrated in Figure 3, researchers performed fMRI scans during the taste test and found reactions in the cortex system, which is responsible for rational thinking, when they blindly tasted the two and preferred Pepsi. When they were told which one was Coke ahead of time, the scans showed reactions in the limbic system, which deals with emotions. (Lawton & Wilson, 2010) This shows that selecting the brand goes deeper than rational thinking and emotions play a key role in the consumers’ decision-making process. Marketers can make the assumption that potential customers do not choose a particular brand because it had great consumer reviews, but more likely on the positive emotions or memories they have with that brand name. Advertisements and commercials are not created to just sell the company’s product, but rather create a relationship with the consumers. When the relationship is established and reinforced by building positive emotions or memories, then the bond between consumer and company basically becomes highly resistant to change (Lawton & Wilson, 2010).
Identifying Challenges Facing Neuromarketing
Ethical Issues
Since neuroimaging has made it possible for scientists and businesses alike to be able to garner information about the subconscious mind and tendencies of customers, there are a number of concerns that have been raised regarding the practices of neuromarketing.
The most common concern is that neuromarketing will allow companies to “reveal the ‘buy button’ in the brain,” enabling commercial messages to be created that are so persuasive and so precisely targeted as to prove irresistible” (Lewis, 2010). Unfortunately, it is not known whether or not neuromarketing is currently being used to trigger the brain’s “buy button” or will be used to do so in the future. Many researchers believe that neuromarketing is currently only used to target the areas of the brain that control attention, emotion and memory (Lewis, 2010). This means that the old brain still has to make the decision on its own, but neuromarketing allows advertisements to be communicated effectively. Nonetheless, it would be impossible to say that with further technological improvements and a better understanding of the human brain that one day neuromarketing could trigger the “buy button in the brain”.
Perhaps one of the most controversial ethical issues in neuromarketing is the effects that the testing has on its subjects. In this area two problems that arise:
There is a 1-2% rate of subjects receiving abnormal readings from fMRI or EEG monitoring (Illes et al. 2007). Despite the fact that these scans can reveal metal afflictions like Alzheimer’s disease, Parkinson’s, Huntington’s, schizophrenia and many others; subjects do not have to be informed of these findings. This is because the two regulatory organizations that this type of situation would concern do not have rules stating that subjects need to be informed of the findings. In fact, the US Food and Drug Administration (FDA) has approved of neuroimaging techniques to be used for clinical use; and because there is no diagnosis being made, there is no need for the technician to warn the subject. Also, since neuromarketing is considered to be a marketing method, not experimentation, it does not have to overseen by the Institutional Review Board (Ariely & Berns. 2010).
The second problem that arises, from instituting such techniques, is since this very personal information is being recorded for use by a business, the security of such data is questionable. There is simply no guarantee that the information is secure, confidential and anonymous. One of the largest concerns of these types of scans is that the information will be sold to health insurance firms so that health insurance companies can raise prices for high risk individuals. If a company was even more reckless with the information from a brain scan, and the data was made public, it could adversely affect the subject’s ability to get a job or stay employed (Rapp et al. 2009).
Costs
Much like any other business decision, costs must be factored into the equation. In the case of neuromarketing there are costs in different areas. First, there is the cost of the actual equipment that is being used--for fMRI scanners that can range from $1-1.5 million and for EEG $20-200 thousand (Ariely & Berns. 2010).To go along with the equipment costs, there are also labor and other indirect expenses. These can range from a couple hundred dollars per hour to over a thousand dollars per hour depending on the technicians expertise, content of the scan and the amount of data that is being processed. These high costs are the reason why marketing and other consulting firms are partnering with university neuroscience programs to conduct studies for Fortune 500 companies. A full study can range in cost from $80 thousand to $250 thousand to complete; but, because universities and businesses are sharing information, the development of neuromarketing has been expedited (Ariely & Berns. 2010).
A true neuromarketing plan involves actually implementing changes based upon what the data reveals. So, if the purpose of the scan was to develop an effective television ad-campaign the costs would also be added into the advertising budget. On the other hand, if the purpose of the scan was to discover what the consumer prefers the headlights on their car to look like, the costs would be funneled into actually adding headlights into the car. In this sense, neuromarketing is not like any other marketing plan because it can have a role in the advertising or development of a product.
Neuromarketing is a field of marketing that studies consumers' response to marketing stimuli and matches that response to different areas of the brain. Researchers use neuroimaging technology to measure changes in activity in different parts of the brain, and other sensors to measure changes in one's physiological state. They do this in order to learn why consumers make the decisions they do, and what part of the brain is telling them to do it. Marketing analysts use neuromarketing to better measure a consumer's preference, as the verbal response given to the question, "Do you like this product?" may not always be the true answer since many of our preferences are unconscious. This knowledge helps marketers create products and services designed more effectively and marketing campaigns focused more on the brain's response.
Neuromarketing faces some challenges concerning ethical issues, from skeptics who question its validity and in the costs involved to implement.
Marketers have found that predicting consumer behavior has proven difficult despite well designed traditional market research measures. However, advances in neurosciences and neuromarketing have not only demonstrated the inner workings of the brain, but have been able to demonstrate and quantify emotional and cognitive processes associated with decision making. In particular, they have been able to highlight the role of emotion and unconscious processes in decision making and consumer choice.

References
Ariely, D. & Berns, G. S. (2010, April) “Neuromarketing: the hope and hype of neuroimaging in business,” Nature Reviews Neuroscience 11, 284-292
Burkitt, L. (2009, October 09). Neuromarketing: companies use neuroscience for consumer feedback. Retrieved from http://www.forbes.com/forbes/2009/1116/marketing-hyundai-neurofocus-brain-waves-battle-for-the-brain.html
Hardman, H. (2004, October 13). Coke versus Pepsi: it's all in the head. Retrieved from http://www.hnl.bcm.tmc.edu/cache/eurekalert.org.htm
Illes, J., Rosen, A., Greicius, M. & Racine, E (2007), “Ethics Analysis of Neuroimaging in Alzheimer’s Disease,” Annals of the New York Academy of Sciences, 1097, 278–295.
Lawton, G., & Wilson, C. (2010). Mind-reading marketers. New Scientist, 207(2772), 02. Retrieved from Academic Search Complete database
Lewis-Hodgson, D (2010, June 14). How Neuromarketing was invented. Retrieved from http://www.themindlab.org/
Lindstrom, M. (2008). You may love the logo, but it’s a dying breed. Advertising Age, 79(44), 19. Retrieved from Communication & Mass Media Complete database
Lindstrom, M. (2010). Buyology: Truth and lies about why we buy. New York, NY: Broadway Books.
Pradeep, A. K. (2010). The Buying brain: Secrets for selling to the subconscious mind. Hoboken, NJ: Wiley.
Rapp, J., Hill, R., Gaines, J., & Wilson, R. (2009, December 01). Advertising and Consumer Privacy- Old Practices and New Challenges. Journal of Advertising. Volume 38, 51-61. Retrieved from Web of Science database
Renvoise, P., & Morin, C. (2007). Neuromarketing: Understanding the "buy buttons" in your customer's brain. Nashville, TN: Thomas Nelson, Inc.
Sutherland, M. (2007, February). Neuromarketing: what's it all about? Retrieved from http://www.sutherlandsurvey.com/Column_pages/Neuromarketing_whats_it_all_about.htm

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