Neuromarketing

An overview

K Ganapathy, President, Apollo Telemedicine Networking Foundation

Advances in neurosciences are re-defining and enhancing our understanding of how we make decisions in general and how consumers make decisions from a marketing perspective. Some neuroscientists claim that identifying location of the ‘Buy Button’ in the brain may be possible. This overview summarises current concepts on Neuromarketing.

Neuromarketing is the branch of neuroscience research that aims to better understand the consumer through his cognitive processes and has applications in marketing, explaining consumer's preferences, motivations and expectations, predicting his/her behaviour and explaining successes or failures of advertising messages. Neuro science can help marketers by providing confirmatory evidence about the existence of a phenomenon, generating more fundamental (i.e., a neural level) conceptualisation and understanding of underlying processes, refining existing concepts of various phenomena, and providing methodologies for testing new as well as existing theories are in the offing.

The term Neuromarketing was first used in a June 2002 press release by an Atlanta-based advertising firm, BrightHouse, announcing the creation of a business division using fMRI for marketing research. The annual advertising market in the USA alone in 2014 was US$475 billion. Traditionally marketers have watched what we do in stores or tracked how purchases rise or fall in response to promotional campaigns, changes in pricing, endless surveys and focus groups, asking us what we buy and why. In Neuromarketing one understands patterns of brain signals (electrical, blood flow, O2 and blood utilisation in specific regions) as a function of time (milliseconds) during observation of commercial advertisements, leading to information about cognitive and emotional processing of information in the brain. The neurophysiological changes in the complex neuronal network, during a simple decisional process, involved in purchase of a specific product is studied. The response to advertising (how the message is encoded) matters more than the stimulus (the ad itself ) because the response is what the ad leaves behind.

Advertising productivity will increase if managers knew how advertisement stimuli (the unique selling proposition) were received and stored by the brain, and how they affect brand choices. Individuals with a high body-mass index (BMI) prefer a thin-shaped bottle, even if this drink is higher in price. Brains in obese people respond differently to nutrition labels. When given an identical milkshake, there is an increased brain activity in reward areas if the label reads ‘regular’ compared to ‘low-fat’. Neuroimaging has been used to identify structural and functional brain markers associated with racial biases, trustworthiness, moral reasoning, economic cooperation, social rejection, sexual preferences and even consumer brand attachment. While one school of thought says “Don’t just advertise. Neurotise", others believe that brain scans are only brain scams !!

Basis of Traditional Marketing

The main objective of marketing is to match products with people. Guiding design and product presentation to suit consumer preferences. Is it possible to examine what the brain does while making a purchasing decision?

Basis of Neuromarketing

Cognition describes the way our brain thinks, reasons and solves problems. Changes that occur in the brain while we focus, concentrate, maintain or divide attention can now be qualitatively and quantitatively measured. Learning, remembering new things, planning, executing, and regulating activities, understanding and using language, assembling and grouping things together all form the basis of neuromarketing studies.

Neuromarketing Tools

This is represented pictorially below. However, these studies can only be done in well-equipped neuro labs with considerable infrastructure and technical expertise.

Techniques of NeuroMarketing

Eye movement tracking is a standard tool deployed for understanding interaction with both online and bricks-and-mortar environments. Eye movement (fixed and interrupted) reveals focus and attentional bias, distribution and gaze time (of the look) and pupil dilation. These are surrogate markers of the subject’s attention and cognitive processing. A longer blinking interval would correspond to better processing of information. The ERP ANALYSIS: An Event-Related Potentials (ERPs) analysis, revealed that visuo cortical processing shows an increase in the early positive component (P1 of an ERP), at central and parietal sites, along with increase of the later negative component (N2 of the ERP), at parietal and occipital sites, related to the observation of disliked logos. Brain fingerprinting includes identification of the p300 wave in EEG and MEG and correlating this with observed responses when exposed to a marketing stimulus. Transcranial magnetic stimulation (TMS), a neuro enhancer, could even have potential for altering “Neuro responsiveness” to branding. The brain is the ultimate business frontier andtechnology is now letting marketing managers peek inside our heads. An EEG allows neuroscientists to track the electrical changes occurring in the brain when watching a commercial. Miniaturisation and portability of the equipment has made evaluation of potential customers easier.

Illustrations of Neuro Marketing

Subjects preferred Pepsi if they did not know what they were drinking, but preferred Coke if they did. Brain scans showed different activity in different areas. When tasting blind, the ventro medial prefrontal cortex responded more actively to Pepsi. When told they were drinking Coke, there was more activity in the medial prefrontal cortex — a part of the brain dealing with higher cognitive processing and memory. Positive brand associations could almost literally be seen overriding the basic pleasure response (taste)

Specific Documented Brain Changes when Seeing an Advertisement

Strong activation of the right inferior frontal cortex (Vocalisation), at 500ms, latency and in the left orbitofrontal cortex (Judgement) between 600 and 1200 ms after stimulus presentation has been recorded. Active involvement of the Anteriorcingulate Cortex (ACC) and Cingulatemotor Area (CMA) have been correlated to liking or disliking particular advertising logos. Ventromedial Prefrontal Cortex (VMPC) is critical for emotion and emotional regulation, playing a pivotal role in brand preference. The prefrontal cortex discriminates cognitive processes, encoding new complex stimuli (e.g., logos, products, testimonials, payoff, etc). Amount individuals were willing to pay (a measure of decision utility) correlated with activity levels in the medial Orbitofrontal Cortex (OFC) and Prefrontal Cortex (PFC). Similar activation in the OFC was observed when subjects anticipated a pleasant taste, look at pretty faces, hear pleasant music, receive money and experience a social reward. In a study of neural responses to sips of wine, medial OFC response were higher when subjects were told that wine was $90 per bottle vs. $5 per bottle. If an ad does not modify the brains of the intended audience, then it has not worked. This would be the way a marketing campaign is assessed

Neuromarketing: A Peep into the Future

MRI scans for neuromarketing studies are at present not regulated by US Food & Drug Administration (FDA) or an Institutional Review Board (IRB). Neuro-caution must be used in deploying the new neuro culture of neuromarketing, while appreciating the exciting discoveries about human behaviour using neurotechnologies. Commercial effectiveness indicators could be measured including emotional engagement, memory retention, purchase intention, novelty, awareness and attention. We make decisions based on our emotions. Emotional engagement is secondary to the emotional excitement. What happens in the brain when consumers respond differently to an ad, brand or campaign will be understood. Cerebral changes during the Emotional Reaction and Cognitive Processing component of seeing an advertisement can be studied. This is correlated with remembering / forgetting the Ad, attention sustenance, like/dislike. Marketers could exploit these tools in an ad pretest. The exact location/s of the “Buy Button” could be identified. Using. Principles of reverse engineering the BB could be stimulated and consumer behaviour modified. Improbable? Yes. Impossible? No.

--Issue 45--

Author Bio

K Ganapathy

K Ganapathy (Neurosurgeon) is a Past President of the Telemedicine Society of India. Former Secretary and Past President of the Neurological Society of India. Formerly an adjunct professor at the IIT Madras and Anna University, Chennai. He is currently Emeritus Professor at the Dr MGR Tamilnadu Medical University. He was formerly honorary consultant and advisor in Neurosurgery at Armed Forced Medical Services.

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