Neuromarketing For Dummies [1 ed.] 1118518586, 9781118518588

Table of contents :
Cover
Title page
Copyright page
Contents at a Glance
Table of Contents
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Part I: The Brave New World of Neuromarketing
Chapter 1: What Neuromarketing Is and Isn’t
Defining Neuromarketing
Understanding the New Scientific Foundations of Neuromarketing
Exploring Where Marketers Are Using Neuromarketing Today
Explaining How Neuromarketing Measures Consumer Responses
Succeeding with Neuromarketing Studies
Chapter 2: What We Know Now That We Didn’t Know Then
How We Used to Think about Consumers
How People Really See and Interpret the World
Replacing the Rational Consumer Model with the Intuitive Consumer Model
Chapter 3: Putting Neuromarketing to Work
Building Better Brands with Neuromarketing
Designing Better Products and Packages with Neuromarketing
Creating Effective Ads with Neuromarketing
Understanding the Mind of the Shopper with Neuromarketing
Appealing to Brains Online with Neuromarketing
Producing Compelling Entertainment with Neuromarketing
Chapter 4: Why Neuromarketing Matters
Potential Dangers of Neuromarketing
Potential Benefits of Neuromarketing
Learning to Live with Neuromarketing: The New Realities
Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer
Chapter 5: The Intuitive Consumer: Nonconscious Processes Underlying Consumer Behavior
The Intuitive Consumer Is a Cognitive Miser
The Nonconscious Mind Anchors Us in the Moment
So, What Is Consciousness Good for, Anyway?
The Three Master Variables of Neuromarketing Research
Chapter 6: The Central Role of Emotions in Consumer Responses
Understanding Nonconscious Emotional “Markers”
Emotions and Attention
Emotions and Memory
Chapter 7: New Understandings of Consumer Goals and Motivation
Looking at How Goals Drive Us
Having Goals We’re Not Aware Of
Consumer Motivation, Goal Seeking, and Goal Attainment
Chapter 8: Why We Buy the Things We Buy
How People Make Decisions
Why Consumer Decisions Aren’t Rational
The Limits of Persuasive Messaging in Consumer Decision Making
Part III: Neuromarketing in Action
Chapter 9: Brands on the Brain
Brands Are About Connections
How Brands Impact Our Brains
Why Leading Brands Are So Hard to Displace
Using Neuromarketing to Test Brands
Chapter 10: Creating Products and Packages That Please Consumers’ Brains
How New Products Get Noticed
Neurodesign of Everyday Things
Neuromarketing and New Product Innovation
Using Neuromarketing to Test Product and Package Designs
Chapter 11: Advertising Effectiveness
Two Views of How Advertising Works
Driving the Direct Route to Advertising Effectiveness
Taking the Indirect Route to Advertising Effectiveness
Using Neuromarketing to Test Advertising
Chapter 12: The Shopping Brain and In-Store Marketing
Understanding the Mind of the Shopper
Making Stores More Brain-Friendly
Using Neuromarketing to Test Shopping Environments
Chapter 13: When Consumers’ Brains Go Online
Understanding How Online Marketing Is Different
Building the Perfect Website
Satisfying (Almost) All Our Needs Online
How to Use Neuromarketing to Test Online Experiences and Marketing Effectiveness
Chapter 14: Entertainment Effectiveness
Why Our Brains Like Stories
Neuromarketing Goes to the Movies
Product Placement in Movies, TV Shows, and Beyond
The Future of Entertainment: Immersive Games and Simulations
Using Neuromarketing to Test Entertainment
Part IV: Measuring Consumer Response with Neuromarketing
Chapter 15: Traditional Approaches: Why Not Just Ask People?
Understanding Why Asking Questions Is Risky Business
Introducing the Three Workhorses of Market Research
Other Ways to Ask Consumers Questions
Mixing and Matching Traditional and Neuromarketing Approaches
Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain
Understanding Where Neuromarketing Signals Originate
Capturing Signals from the Body
Capturing Signals from the Brain
Putting Technologies in Their Proper Place
Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers
Running Response-Time Studies
Leveraging Online Services to Tap Into the Wisdom of Crowds
Conducting Do-It-Yourself Behavioral Experiments
Balancing Costs and Benefits in Neuromarketing Studies
Chapter 18: Picking the Right Approach for Your Research Needs
Summarizing What You Can Measure with Neuromarketing
Matching Neuromarketing Approaches to Research Questions
Integrating Neuromarketing and Traditional Research Approaches
Part V: Living with Neuromarketing: Practical and Ethical Considerations
Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures
Experimental Design: Identifying How Good Experiments Work
Measurement Theory: Understanding Validity and Reliability
Reverse Inference: Connecting Brain Measures to States of Mind
Statistical Significance: Knowing When to Believe the Results
Normative Data: Linking Findings to the Real World
Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies
What Are Your Business Objectives for This Study?
What Hypothesis Are You Testing and What’s the Best Test to Use?
Are You Testing the Right Materials?
Are You Sampling from the Right Population?
How Will Your Results Change Your Business Actions?
Don’t Pay the Price of a Failure to Communicate
Chapter 21: Picking the Right Neuromarketing Partner
Knowing What You Need from a Neuromarketing Partner
Looking At Your Options
Neuromarketing Orientations and Specializations
Questions to Ask a Prospective Neuromarketing Partner
Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications
Doing Neuromarketing Ethically
Moving the Industry toward “Neuro-Standards”
Understanding Legal Issues Concerning Neuromarketing
Using Neuromarketing to Make Us Healthier and Wiser
Part VI: The Part of Tens
Chapter 23: Ten Mistaken Beliefs about Neuromarketing
Your Brain Has a “Buy Button”
Marketing Can Control You
Neuromarketing Can Implant Ideas in Your Head
Your Nonconscious Can Overrule Your Conscious Mind
Neuromarketing Will Kill Creativity in Marketing
Surveys and Focus Groups Are Dead
Neuromarketing Is Inherently Evil
Neuromarketing Isn’t Based on Real Research
Neuromarketing Is Only about Advertising
All Neuromarketers Always Tell the Truth
Chapter 24: Ten Scientific Pillars Underlying Neuromarketing
System 1 and System 2
Priming
Emotional “Somatic Markers”
Processing Fluency
Misattribution
Nonconscious Goal Pursuit
Low-Attention Processing
Implicit Memory
Implicit Decisions
Reverse Inference
Index
About the Authors

Citation preview

Neuromarketing

by Stephen J. Genco, PhD; Andrew P. Pohlmann; and Peter Steidl, MBA, PhD

Neuromarketing For Dummies® Published by: John Wiley & Sons Canada, Ltd. 6045 Freemont Blvd. Mississauga, ON L5R 4J3 www.wiley.com

Copyright © 2013 by John Wiley & Sons Canada, Ltd. All rights reserved. No part of this book, including interior design, cover design, and icons, may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd., 6045 Freemont Blvd., Mississauga, ON L5R 4J3, or online at http://www.wiley.com/go/permissions. For authorization to photocopy items for corporate, personal, or educational use, please contact in writing The Canadian Copyright Licensing Agency (Access Copyright). For more information, visit www.accesscopyright.ca or call toll free, 1-800-893-5777. Trademarks: Wiley, For Dummies, the Dummies Man logo, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc., and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: WHILE THE PUBLISHER AND AUTHOR HAVE USED THEIR BEST EFFORTS IN PREPARING THIS BOOK, THEY MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS BOOK AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES REPRESENTATIVES OR WRITTEN SALES MATERIALS. THE ADVISE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR YOUR SITUATION. YOU SHOULD CONSULT WITH A PROFESSIONAL WHERE APPROPRIATE. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. For general information on John Wiley & Sons Canada, Ltd., including all books published by Wiley , please call our warehouse, Tel 1-800-567-4797. For reseller information, including discounts and premium sales, please call our sales department, Tel 416-646-7992. For press review copies, author interviews, or other publicity information, please contact our marketing department, Tel 416-646-4584, Fax 416-236-4448. For technical support, please visit www.wiley.com/techsupport. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library and Archives Canada Cataloguing in Publication Data is available from the publisher. ISBN 978-1-118-51858-8 (pbk); ISBN 978-1-118-51897-7 (ebk); ISBN 978-1-118-51899-1 (ebk); ISBN 978-1-118-51900-4 (ebk) Manufactured in the United States of America 1 2 3 4 5 RRD 17 16 15 14 13

Contents at a Glance Introduction................................................................. 1 Part I: The Brave New World of Neuromarketing............. 5 Chapter 1: What Neuromarketing Is and Isn’t................................................................. 7 Chapter 2: What We Know Now That We Didn’t Know Then...................................... 21 Chapter 3: Putting Neuromarketing to Work................................................................ 37 Chapter 4: Why Neuromarketing Matters...................................................................... 59

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer....................... 71 Chapter 5: The Intuitive Consumer: Nonconscious Processes Underlying Consumer Behavior................................................................................... 73 Chapter 6: The Central Role of Emotions in Consumer Responses........................... 93 Chapter 7: New Understandings of Consumer Goals and Motivation...................... 105 Chapter 8: Why We Buy the Things We Buy............................................................... 119

Part III: Neuromarketing in Action............................. 137 Chapter 9: Brands on the Brain.................................................................................... 139 Chapter 10: Creating Products and Packages That Please Consumers’ Brains...... 157 Chapter 11: Advertising Effectiveness......................................................................... 175 Chapter 12: The Shopping Brain and In-Store Marketing.......................................... 191 Chapter 13: When Consumers’ Brains Go Online....................................................... 203 Chapter 14: Entertainment Effectiveness.................................................................... 219

Part IV: Measuring Consumer Response with Neuromarketing................................................ 235 Chapter 15: Traditional Approaches: Why Not Just Ask People?............................. 237 Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain...................................................................................... 249 Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers........................................................................ 269 Chapter 18: Picking the Right Approach for Your Research Needs......................... 285

Part V: Living with Neuromarketing: Practical and Ethical Considerations........................................ 297 Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures.................................................................................................. 299 Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies........... 317 Chapter 21: Picking the Right Neuromarketing Partner............................................ 327 Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications...... 343

Part VI: The Part of Tens........................................... 359 Chapter 23: Ten Mistaken Beliefs about Neuromarketing......................................... 361 Chapter 24: Ten Scientific Pillars Underlying Neuromarketing................................ 371

Index....................................................................... 379

Table of Contents Introduction.................................................................. 1 About This Book............................................................................................... 1 Foolish Assumptions........................................................................................ 2 Icons Used in This Book.................................................................................. 3 Beyond the Book.............................................................................................. 3 Where to Go from Here.................................................................................... 4

Part I: The Brave New World of Neuromarketing.............. 5 Chapter 1: What Neuromarketing Is and Isn’t . . . . . . . . . . . . . . . . . . . . . 7 Defining Neuromarketing................................................................................. 8 Neuromarketing versus marketing....................................................... 8 What neuromarketing is good for......................................................... 9 Brain science and the foundations of neuromarketing...................... 9 Understanding the New Scientific Foundations of Neuromarketing........ 10 Exploring Where Marketers Are Using Neuromarketing Today............... 12 Explaining How Neuromarketing Measures Consumer Responses......... 14 Succeeding with Neuromarketing Studies................................................... 16

Chapter 2: What We Know Now That We Didn’t Know Then . . . . . . . 21 How We Used to Think about Consumers................................................... 21 The rational consumer: Mr. Spock goes shopping........................... 22 Rational models for rational marketing to rational consumers...... 23 Measuring effectiveness the old-fashioned way............................... 24 When rational models fail.................................................................... 25 How People Really See and Interpret the World........................................ 25 Forming impressions: How we take in the world around us........... 27 Determining meaning and value: Creating connections in our minds................................................................ 28 Deliberating and analyzing: What we say when we talk to ourselves.......................................................................... 29 Speaking and acting: Finally, we act! (Or maybe just talk about it).... 31 Replacing the Rational Consumer Model with the Intuitive Consumer Model......................................................................... 35

vi

Neuromarketing For Dummies Chapter 3: Putting Neuromarketing to Work . . . . . . . . . . . . . . . . . . . . . 37 Building Better Brands with Neuromarketing............................................. 37 Brands are about connections............................................................ 38 How brands impact our brains........................................................... 39 Why leading brands are so hard to displace..................................... 40 Using neuromarketing to test brands................................................ 41 Designing Better Products and Packages with Neuromarketing.............. 41 How new products get noticed........................................................... 42 Neurodesign of everyday things......................................................... 42 Neuromarketing and new product innovation.................................. 43 Using neuromarketing to test new product ideas............................ 44 Creating Effective Ads with Neuromarketing.............................................. 45 The direct route: Impacting the sale directly................................... 46 The indirect route: Changing and reinforcing attitudes toward the brand.............................................................. 47 Using neuromarketing to test advertising......................................... 47 Understanding the Mind of the Shopper with Neuromarketing............... 48 Understanding the mind of the shopper........................................... 48 Making stores more brain-friendly..................................................... 49 Using neuromarketing to test shopping environments................... 50 Appealing to Brains Online with Neuromarketing..................................... 51 Going online: Something new for the old brain................................ 51 Building the perfect website............................................................... 53 Satisfying (almost) every need online................................................ 54 Using neuromarketing to test online experiences............................ 54 Producing Compelling Entertainment with Neuromarketing................... 55 Why our brains like stories................................................................. 55 Neuroscience goes to the movies....................................................... 56 Product placement in movies, TV shows, and beyond.................... 56 The future of entertainment: Immersive games and simulations..... 57 Using neuromarketing to test entertainment.................................... 57

Chapter 4: Why Neuromarketing Matters . . . . . . . . . . . . . . . . . . . . . . . . 59 Potential Dangers of Neuromarketing.......................................................... 60 Reading our minds, invading our privacy......................................... 61 Pushing our “buy buttons”.................................................................. 62 Making us want things that aren’t good for us................................. 63 Potential Benefits of Neuromarketing.......................................................... 64 Using neuromarketing to inform and educate.................................. 64 Making consumers’ lives a little easier.............................................. 65 Acknowledging the value of intangible value.................................... 66 Learning to Live with Neuromarketing: The New Realities....................... 67 Neuromarketing is here to stay.......................................................... 67 Consumers aren’t helpless.................................................................. 68 Seeing your world through a marketer’s eyes.................................. 69

Table of Contents

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer....................... 71 Chapter 5: The Intuitive Consumer: Nonconscious Processes Underlying Consumer Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 The Intuitive Consumer Is a Cognitive Miser.............................................. 74 Interpreting our world efficiently....................................................... 74 Catching our eye with novelty............................................................ 75 Comforting us with familiarity............................................................ 76 Keeping things simple with processing fluency............................... 78 The Nonconscious Mind Anchors Us in the Moment................................ 79 The survival value of nonconscious thinking................................... 79 Why we’re not conscious of our nonconscious................................ 80 How we make decisions without thinking about them.................... 81 The priming directive: Influence without awareness....................... 82 So, What Is Consciousness Good for, Anyway?.......................................... 86 Taking over from the nonconscious when necessary..................... 86 Talking to ourselves............................................................................. 87 Thinking about the past and the future............................................. 88 The Three Master Variables of Neuromarketing Research....................... 88 Attention: The doorway to conscious awareness............................ 89 Emotion: Arousal, attraction, motivation.......................................... 90 Memory: How we construct, retrieve, and reconstruct the past...... 91

Chapter 6: The Central Role of Emotions in Consumer Responses . . . . 93 Understanding Nonconscious Emotional “Markers”................................. 93 Nonconscious emotions versus conscious feelings......................... 95 I feel your pain: Emotions and body states....................................... 96 What emotions are good for................................................................ 98 Emotions and Attention................................................................................. 99 Aiming the spotlight of attention with emotional markers............. 99 Seeing why attention sometimes isn’t so good for marketers...... 100 Emotions and Memory................................................................................. 101 Emotions make memories memorable............................................. 101 How we remember memories........................................................... 102 Memory and emotional markers....................................................... 104

Chapter 7: New Understandings of Consumer Goals and Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Looking at How Goals Drive Us................................................................... 105 The new science of motivation......................................................... 106 Conscious and nonconscious goals................................................. 107 Goals and behavior............................................................................. 108

vii

viii

Neuromarketing For Dummies Having Goals We’re Not Aware Of.............................................................. 111 Operating under the influence of nonconscious goals.................. 111 Implications of nonconscious goals................................................. 113 Consumer Motivation, Goal Seeking, and Goal Attainment.................... 115 Approach and avoidance in the shopping aisle.............................. 115 Motivation and the intuitive consumer........................................... 117 Beyond the buying brain: Other goals marketers care about....... 118

Chapter 8: Why We Buy the Things We Buy . . . . . . . . . . . . . . . . . . . . 119 How People Make Decisions....................................................................... 120 Digging down into Kahneman’s System 1 and System 2................ 121 Understanding explicit and implicit decisions............................... 123 Why Consumer Decisions Aren’t Rational................................................ 126 Judgment heuristics: The way we’re wired..................................... 127 Including judgment heuristics in consumer decision-making models................................................................. 128 The Limits of Persuasive Messaging in Consumer Decision Making........ 130 Persuasion versus implicit consumer decisions............................ 132 Persuasion versus judgment heuristics........................................... 133 Persuasion versus habit..................................................................... 135

Part III: Neuromarketing in Action............................. 137 Chapter 9: Brands on the Brain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Brands Are About Connections.................................................................. 139 Seeing brands everywhere................................................................ 140 Understanding brand “equity” and connections in memory........ 140 Experiencing a brand......................................................................... 143 How Brands Impact Our Brains.................................................................. 144 Activating nonconscious thinking with brands.............................. 145 Brand-building over time................................................................... 147 Growing brain-friendly brands.......................................................... 148 Why Leading Brands Are So Hard to Displace.......................................... 149 Taking advantage of brand leadership............................................ 149 Leveraging habitual buying............................................................... 150 Understanding the upstart’s dilemma............................................. 151 Using Neuromarketing to Test Brands...................................................... 153 Measuring brand equity the old-fashioned way............................. 153 Probing brand connections with neuromarketing......................... 154

Chapter 10: Creating Products and Packages That Please Consumers’ Brains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 How New Products Get Noticed................................................................. 157 Standing out versus blending in....................................................... 158 Watching out for your neighbors..................................................... 160 Leveraging emotional connections.................................................. 162

Table of Contents Neurodesign of Everyday Things............................................................... 164 We’re hard-wired for good design.................................................... 164 Design tips from the lab..................................................................... 165 Beauty is in the wallet of the beholder............................................ 167 Neuromarketing and New Product Innovation......................................... 169 Why 80 percent of new products fail............................................... 169 Overcoming bias against the new..................................................... 170 Using Neuromarketing to Test Product and Package Designs............... 172 The eyes have it: Eye tracking and design testing.......................... 172 Choosing in the blink of an eye......................................................... 174

Chapter 11: Advertising Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Two Views of How Advertising Works....................................................... 175 The direct route: Impacting the sale directly................................. 176 The indirect route: Changing and reinforcing attitudes toward the brand............................................................ 179 Driving the Direct Route to Advertising Effectiveness............................ 180 Pay attention, I’m talking to you....................................................... 181 You are now officially persuaded..................................................... 182 Read it back to me.............................................................................. 182 Taking the Indirect Route to Advertising Effectiveness.......................... 183 Advertising and low-attention processing....................................... 184 Dissecting the feel-good ad................................................................ 184 Catch you later: Learning without listening.................................... 186 Using Neuromarketing to Test Advertising............................................... 187 Tracking attention, high and low...................................................... 187 Monitoring emotional reactions....................................................... 188 Testing for the right things................................................................ 188

Chapter 12: The Shopping Brain and In-Store Marketing . . . . . . . . . 191 Understanding the Mind of the Shopper................................................... 191 Shopping: A multisensory experience............................................. 192 Shopping and goal pursuit................................................................. 193 Personality and shopping styles....................................................... 195 Making Stores More Brain-Friendly............................................................ 197 Getting shoppers where they need to be........................................ 198 Making choices easier........................................................................ 198 Decreasing the pain of paying........................................................... 200 Using Neuromarketing to Test Shopping Environments......................... 200 Challenges in tracking the free-range shopper............................... 201 Neuromarketing alternatives to testing in-store............................. 202 Simulating the shopping experience................................................ 202

Chapter 13: When Consumers’ Brains Go Online . . . . . . . . . . . . . . . . 203 Understanding How Online Marketing Is Different.................................. 204 Embracing interactivity and consumer control.............................. 204 Aligning ads with online tasks and goals......................................... 206 Dissolving the gap between marketing and buying........................ 207

ix

x

Neuromarketing For Dummies Building the Perfect Website....................................................................... 208 How the brain consumes web pages................................................ 208 Website frustration, confusion, and rejection................................ 209 Nonconscious processing and the online experience................... 211 Satisfying (Almost) All Our Needs Online................................................. 212 Online search and limitless information.......................................... 213 Social networking and limitless sharing.......................................... 214 Online shopping and limitless choice.............................................. 215 How to Use Neuromarketing to Test Online Experiences and Marketing Effectiveness........................................................................... 216 Testing online ad effectiveness......................................................... 216 Testing website ease of use............................................................... 217

Chapter 14: Entertainment Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 219 Why Our Brains Like Stories....................................................................... 220 That reminds me of a story . . .......................................................... 221 Pacing and the brain........................................................................... 222 Stories and persuasion....................................................................... 222 Neuromarketing Goes to the Movies......................................................... 223 How movies synchronize our brains................................................ 224 How trailers trigger nonconscious goals......................................... 225 How movies influence behavior........................................................ 226 Product Placement in Movies, TV Shows, and Beyond........................... 227 Neuromarketing principles behind product placement................ 228 Product placement gets results........................................................ 229 The Future of Entertainment: Immersive Games and Simulations......... 230 Immersion and “presence” in online and video games.................. 230 Product placement in immersive games......................................... 231 Getting back to planet Earth: Aftereffects of game immersion..... 231 Using Neuromarketing to Test Entertainment.......................................... 232 Measuring physiological responses to entertainment................... 232 Measuring brain and behavioral responses to entertainment..... 233

Part IV: Measuring Consumer Response with Neuromarketing................................................. 235 Chapter 15: Traditional Approaches: Why Not Just Ask People? . . . . 237 Understanding Why Asking Questions Is Risky Business....................... 238 Introducing the Three Workhorses of Market Research......................... 240 Conducting in-depth interviews........................................................ 241 Seeking the wisdom of focus groups................................................ 242 Sampling opinions in consumer surveys......................................... 244 Other Ways to Ask Consumers Questions................................................ 246 Test marketing using experimental designs and targeted samples..................................................................... 246 Consumer panels................................................................................ 247 Observational studies........................................................................ 247 Mixing and Matching Traditional and Neuromarketing Approaches....... 248

Table of Contents Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Understanding Where Neuromarketing Signals Originate...................... 249 Getting to know your nervous system............................................. 250 Mapping neuromarketing measures to the nervous system......... 251 Capturing Signals from the Body................................................................ 252 Interpreting facial expressions......................................................... 253 Sensing facial muscles: Electromyography..................................... 254 Looking at it the right way: Eye tracking......................................... 254 Reading sweaty palms: Electrodermal activity............................... 257 Taking a deep breath: Heart rate, blood pressure, and respiration................................................................................ 257 Racing the clock: Behavioral response times................................. 258 Capturing Signals from the Brain............................................................... 259 Listening to blood flow in the brain................................................. 259 Plugging into the electrical brain...................................................... 262 Putting Technologies in Their Proper Place............................................. 266

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Running Response-Time Studies................................................................ 270 Seeing the logic of response-time studies....................................... 270 Measuring implicit brand attitudes with response-time studies.... 271 Measuring semantic and emotional connections with response-time studies............................................................ 272 Leveraging Online Services to Tap Into the Wisdom of Crowds............ 274 Activating the webcam: Online eye tracking and facial expression analysis.............................................................. 275 Using “gamification” in online research........................................... 276 “Crowdsourcing” with prediction markets...................................... 278 Conducting Do-It-Yourself Behavioral Experiments................................ 279 Setting up and running behavioral experiments............................ 279 Testing behavioral economics principles in real-world settings..... 281 Balancing Costs and Benefits in Neuromarketing Studies...................... 282

Chapter 18: Picking the Right Approach for Your Research Needs . . . 285 Summarizing What You Can Measure with Neuromarketing.................. 286 Matching Neuromarketing Approaches to Research Questions............ 287 Behavioral response-time studies.................................................... 290 Eye tracking......................................................................................... 290 Behavioral experiments..................................................................... 290 Biometrics............................................................................................ 291 Electroencephalography.................................................................... 292 Functional magnetic resonance imaging......................................... 292 Integrating Neuromarketing and Traditional Research Approaches..... 293 Taking a big-picture view of market-research requirements..............293 Thinking about capacity and capabilities for integrated studies...... 295 Building an organizational structure for integrated studies......... 296

xi

xii

Neuromarketing For Dummies

Part V: Living with Neuromarketing: Practical and Ethical Considerations........................... 297 Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures . . . . . . . . . . . . . . . . . . . . . . . . 299 Experimental Design: Identifying How Good Experiments Work........... 300 Three questions every good experiment must answer................. 300 Knowing what to let change and what to hold constant............... 301 Measurement Theory: Understanding Validity and Reliability.............. 304 Measuring the right thing and measuring it right........................... 304 Improving the validity and reliability of neuromarketing metrics.... 306 Reverse Inference: Connecting Brain Measures to States of Mind........ 307 Statistical Significance: Knowing When to Believe the Results.............. 310 Statistical tests commonly used in neuromarketing studies........ 310 Getting more mileage out of statistical testing............................... 311 Normative Data: Linking Findings to the Real World............................... 314 Friends don’t let friends make marketing decisions without normative data.................................................................. 314 Understanding how normative data puts study results in context............................................................................ 315

Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 What Are Your Business Objectives for This Study?............................... 317 What Hypothesis Are You Testing and What’s the Best Test to Use?..... 319 Are You Testing the Right Materials?........................................................ 321 Are You Sampling from the Right Population?......................................... 323 How Will Your Results Change Your Business Actions?......................... 325 Don’t Pay the Price of a Failure to Communicate........................................... 326

Chapter 21: Picking the Right Neuromarketing Partner . . . . . . . . . . 327 Knowing What You Need from a Neuromarketing Partner..................... 328 Looking At Your Options............................................................................. 331 When to enlist a neuromarketing vendor........................................ 333 When to enlist a neuromarketing consultant.................................. 333 Neuromarketing Orientations and Specializations.................................. 334 Technology specialists....................................................................... 335 Integrated solution generalists......................................................... 337 Questions to Ask a Prospective Neuromarketing Partner...................... 338 Culling the herd................................................................................... 338 Selecting the winner........................................................................... 339

Table of Contents Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 Doing Neuromarketing Ethically................................................................. 344 Protecting the rights of research participants............................... 344 Representing research accurately in media and marketing.......... 346 Providing evidence of validity and reliability to potential buyers.....347 Moving the Industry toward “Neuro-Standards”...................................... 349 Getting past the “Wild West” of early neuromarketing.................. 350 Embracing new standards for neuromarketing.............................. 350 Understanding Legal Issues Concerning Neuromarketing...................... 353 Should neuromarketing be banned?................................................ 353 Balancing accountability and free speech in the marketplace..... 354 Using Neuromarketing to Make Us Healthier and Wiser......................... 355 Neuromarketing and public service advertising............................ 355 Neuromarketing and public policy design and implementation..... 356 Neuromarketing and education........................................................ 357

Part VI: The Part of Tens............................................ 359 Chapter 23: Ten Mistaken Beliefs about Neuromarketing . . . . . . . . 361 Your Brain Has a “Buy Button”................................................................... 361 Marketing Can Control You......................................................................... 362 Neuromarketing Can Implant Ideas in Your Head.................................... 364 Your Nonconscious Can Overrule Your Conscious Mind....................... 364 Neuromarketing Will Kill Creativity in Marketing.................................... 365 Surveys and Focus Groups Are Dead......................................................... 365 Neuromarketing Is Inherently Evil.............................................................. 366 Neuromarketing Isn’t Based on Real Research......................................... 367 Neuromarketing Is Only about Advertising............................................... 368 All Neuromarketers Always Tell the Truth............................................... 368

Chapter 24: Ten Scientific Pillars Underlying Neuromarketing . . . . 371 System 1 and System 2................................................................................. 371 Priming........................................................................................................... 372 Emotional “Somatic Markers”..................................................................... 373 Processing Fluency....................................................................................... 373 Misattribution............................................................................................... 374 Nonconscious Goal Pursuit......................................................................... 375 Low-Attention Processing........................................................................... 376 Implicit Memory............................................................................................ 376 Implicit Decisions......................................................................................... 377 Reverse Inference......................................................................................... 378

Index........................................................................ 379

xiii

xiv

Neuromarketing For Dummies

Introduction

W

elcome to Neuromarketing For Dummies! Neuromarketing is one of those topics that a lot of people talk about, but few people really understand. It’s a brand-new field that sits at the intersection of three existing fields: marketing, market research, and brain science. In this book, we look at all these dimensions of neuromarketing, and consider its ethical and public policy implications as well. As you dig into this book, you see that neuromarketing isn’t about magical buy buttons in the brain, or about creating zombie consumers who are powerless to resist the enticements of brain-tickling marketers. It’s about some amazing new discoveries in the brain sciences that are fundamentally changing the way we think about thinking, and are inevitably impacting how we think about buying, selling, and experiencing products and services. That’s the revolution — and the excitement — that neuromarketing represents, and it’s what we try to capture in Neuromarketing For Dummies.

About This Book Our approach follows the tried-and-true format of the For Dummies series. We cover our topic in a modular way so you can jump in at any point and not feel lost. You can read the chapters in whatever order you like, because each chapter is self-contained. If we mention something that we cover in another chapter, we tell you where you can find more information. Sidebars (text in gray boxes) and anything marked with the Technical Stuff icon are skippable. Finally, we made some decisions regarding terminology that may hide some deep debates among scientists and researchers, but we did so to simplify our story and save you from a lot of philosophical arguing: ✓ We use the terms brain and mind interchangeably, even though some academics (and philosophers) would howl at such a simplification. ✓ We use the general term brain sciences to encompass the three major branches of science we include as foundations for neuromarketing: neuroscience, social psychology, and behavioral economics.

2

Neuromarketing For Dummies ✓ We often use the term consumers to describe the people neuromarketing wants to understand; sometimes we just call them people. ✓ People who participate in studies or experiments we usually call participants, because we don’t like the clinical term subjects, although we do use that term once in a while. Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just click the web address to be taken directly to the web page. Finally, in the grand tradition of the For Dummies series, we don’t take our subject matter or ourselves too seriously — which is particularly important for the topic of neuromarketing, because some people treat this topic as something that’s just too complicated for mere mortals to understand. Usually, when experts tell you something is too complicated for you to understand, it means you’re about to be charged a lot of money or they don’t want you to ask too many questions. We hope this book helps level the playing field between practitioners, consumers of neuromarketing services, and just plain consumers, so that everyone has a more grounded and realistic picture of what’s involved and what’s realistic to expect, in the brave new world of neuromarketing.

Foolish Assumptions We wrote this book for anyone who has an interest in neuromarketing, so we made very few assumptions about you and what you need to know to get the most out of this book. Here are the assumptions we made: ✓ We assume you don’t have a degree in psychology, economics, statistics, or neuroscience — but if you do, we don’t think it’ll hurt you too badly. ✓ We assume you’re interested in how people think and why they act the way they do, even when they don’t act very rationally. ✓ We assume you’re interested in how people are influenced by marketing and advertising, but we don’t assume you’re an expert in these fields.

Introduction ✓ We assume you’re interested in neuromarketing because you think it can help you in your business or because you think it can hurt you as a consumer. We cover both these perspectives in depth. ✓ We assume you’re willing to consider new ideas about your own brain that may seem completely counterintuitive when you first hear them.

Icons Used in This Book Icons are the little images in the margins of this book. We use them throughout the book to draw your attention to certain kinds of information. Here’s what each icon means:

The Tip icon marks any tidbit of information that you can use to help you apply neuromarketing principles in your business, design useful neuromarketing studies, or work successfully with a neuromarketing partner.

The most important points in each chapter are marked with the Remember icon. If you want to jump to the main points of each chapter quickly, just follow the Remember icons. We use the Warning icon to point out things you need to look out for. These may be cautions about interpreting scientific concepts presented in the book, or advice to help you get the most out of working with neuromarketing partners. Sometimes we can’t resist sharing some technical details with you that you really don’t need to know to understand the rest of a chapter. Often these are further details on scientific topics or particulars about how neuromarketing has been used in practice. We mark these with the Technical Stuff icon so you can skip over them if you want to. It’s your choice.

Beyond the Book In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere goodies on the web.

3

4

Neuromarketing For Dummies Check out the free Cheat Sheet at www.dummies.com/cheatsheet/ neuromarketing for tips on how to apply neuromarketing to advertising and information on the intuitive consumer model and how it differs from the rational consumer model (used in traditional marketing).

Where to Go from Here Although you can jump into this book at any point, we have some recommendations for where you may want to begin: ✓ For the basics, we recommend Chapters 1 and 2, because they provide an overview of the whole book and an introduction to the scientific foundations of neuromarketing. ✓ If you have a particular marketing area that interests you — like branding, product design, shopping, or entertainment — you can find the chapter that addresses that area in Part III. ✓ If you want to know how to get the most out of a neuromarketing study, check out Chapters 18 through 21. ✓ If you want to dive into the ethical and policy implications of neuromarketing, we suggest you start with Chapters 4 and 22. If you want to dig deeper into the brain sciences that provide the foundations for neuromarketing, we suggest two excellent introductions: Neuroscience For Dummies, by Frank Amthor, and Behavioral Economics For Dummies, by Morris Altman, PhD (both published by Wiley). For more reading suggestions, references for all studies discussed in the book, updates and additions to book content, and pointers to training opportunities and upcoming speaking engagements, please visit the authors’ website at www.intuitiveconsumer.com.

Part I

The Brave New World of Neuromarketing

H

In this part . . .

ere, we provide an overview of the new world of neuromarketing and the topics to be covered in more detail in the rest of the book. If you want a quick summary of what neuromarketing is and what this book is about, start here. Neuromarketing has emerged in market research today because of some amazing new discoveries in neuroscience, social psychology, and behavioral economics that have changed our understanding of how the human brain experiences, interprets, decides, and acts in the world. Perhaps it was inevitable that these discoveries would be applied to advertising, marketing, and consumer behavior. But there is still a lot of confusion about this new field, and more than a few misunderstandings about what it can and can’t do, and whether it’s a good or bad thing. In this part, we clear up the confusion and give you a solid foundation for understanding neuromarketing, what it’s good for, and how it’s impacting market research and marketing.

Chapter 1

What Neuromarketing Is and Isn’t In This Chapter ▶ Getting a definition of neuromarketing ▶ Making sense of the science behind neuromarketing ▶ Seeing how neuromarketing is being used today ▶ Understanding the basics of neuromarketing measurement ▶ Succeeding with neuromarketing research

N

euromarketing is a new field that is rapidly emerging in the world of consumer research. For some observers, it’s the “Holy Grail” of research technologies that will finally unlock the mysteries of consumer choice and behavior in the human brain. For others, it’s the root of all evil that will finally give marketers and advertisers ultimate control over our minds and pocketbooks. So, which is it: Holy Grail or root of all evil? As with most exaggerations, the truth lies somewhere in the middle. Neuromarketing does bring some quite powerful insights and techniques into consumer research, and in this book we discuss those contributions in detail. But neuromarketing is not a technique for turning people into “zombie consumers,” and we also discuss in detail why that’s the case. Neuromarketing is controversial, in many cases because it isn’t well understood. It’s also evolving and growing very rapidly, so it’s a moving target. At this stage in its development, there isn’t much consensus regarding what neuromarketing is, what it does, where it’s going, or what we should do about it. So, it makes sense to start with some clear definitions.

8

Part I: The Brave New World of Neuromarketing

Defining Neuromarketing Because we want this book to be a reference for all aspects of neuromarketing, our definition of the field is quite broad. We define neuromarketing as any marketing or market research activity that uses the methods and techniques of brain science or is informed by the findings or insights of brain science. (For more on brain science, see the next section.) Ultimately, neuromarketing is about solving exactly the same problems that all types of market research aim to solve: how a company should best spend its advertising and marketing budget to communicate its value to its customers, while generating revenues and profits for its shareholders. If neuromarketing is worth its salt, it has to help marketers solve these problems better than other types of research. In this regard, there is nothing mysterious about neuromarketing. It’s just another type of market research, subject to the same constraints of time, money, and usefulness as any other type of research that is performed every day.

Neuromarketing versus marketing Some people believe that neuromarketing is a field devoted to influencing people to buy things — often things they don’t really need — and that it’s, therefore, a bad and dangerous thing to do. Part of the blame for this misconception lies with the term itself. Neuromarketing sounds suspiciously like a different (and nefarious) type of marketing, but it’s not. Here’s the distinction you need to keep in mind: ✓ Marketing is a field devoted to influencing people to like things, and ultimately to buy things, including things they may not need. Marketers are aware that people have brains. Marketing, therefore, is now and always has been devoted to influencing brains. ✓ Neuromarketing is a new way to measure whether and how marketing is working. Neuromarketers believe it’s a better way to measure marketing because it’s based on a more realistic understanding of how consumers’ brains operate (we discuss the evidence for this claim in Chapter 2). So, if you believe that influencing brains is a bad thing, then, in our opinion, your complaint is with marketing, not with neuromarketing.

Chapter 1: What Neuromarketing Is and Isn’t

What neuromarketing is good for Taking this broad view of neuromarketing, there are three major ways that it can help us better understand marketing and consumer behavior: ✓ It can tell us what’s going on in people’s brains while they’re experiencing a marketing stimulus (any marketing material presented in a controlled research test). ✓ It can tell us how brains react to marketing stimuli presented in different situational contexts (for example, alone or next to competing products, at different price points, in a store versus online, and so on). ✓ It can tell us how brains translate those reactions into consumer decisions and behaviors (such as buying a product or switching loyalty to a new brand).

Brain science and the foundations of neuromarketing In this book, we use the term brain science to refer to all the scientific fields that underlie neuromarketing. We do this because we want to emphasize that the one obvious scientific source for neuromarketing — neuroscience — is not the only brain science that underlies neuromarketing. In fact, neuromarketing is built on top of at least three basic science fields, which, taken together, we refer to as the brain sciences, or simply brain science: ✓ Neuroscience: The study of the human nervous system, including the brain, its anatomy, functions, and the peripheral nervous system it controls. Neuroscience is most relevant to understanding the brain states and physiological reactions that accompany exposure to brands, products, and marketing materials. ✓ Behavioral economics: The study of how people make economic decisions in the real world. Behavioral economics is most relevant to understanding situational influences on consumer choice and behavior. ✓ Social psychology: The study of how people think and act in the (real or imagined) presence of other people. In recent years, social psychology has focused on the impact of nonconscious processes on human actions. It’s most relevant to understanding how conscious and nonconscious brain processes work together in consumer choice and behavior.

9

10

Part I: The Brave New World of Neuromarketing

Terminology: Brain or mind? Nonconscious, unconscious, or subconscious? Brain versus mind: The word brain tends to be used when people talk about anatomical structures or circuitry in the brain. The term mind tends to be used to refer to the subjective cognitive states a brain creates. For example, the prefrontal cortex is an anatomical part of the brain, but attention is a cognitive “state of mind” produced by activity in the brain. Generally, we use these terms interchangeably. We consider “nonconscious processes in the brain” to be equivalent to “the nonconscious mind.” Unconscious, subconscious, preconscious, and nonconscious: There is a lot of intellectual baggage associated with all the terms that can be used to refer to the “not-conscious” processes



in the brain. Unconscious has some bad connotations, in terms of both the Freudian unconscious and the association with anesthetized states. Subconscious, in turn, carries a “secondary” or “subsidiary” connotation, as if it’s something below and, therefore, less than the conscious. A similar term is preconscious, which often would be perfectly appropriate, but it implies that conscious always follows preconscious, and this isn’t always true. Given all these issues, we use the more neutral term nonconscious in this book. Using this term has the benefit of referring neutrally to “everything other than conscious”; plus, it’s the term that’s becoming the standard in the academic literature.

Other important disciplines, such as neuroeconomics and cognitive psychology, underlie neuromarketing, too, but we don’t cover those fields in detail in this book. Also, each of the fields listed here is regularly spawning new subfields or merged fields, such as consumer neuroscience, consumer psychology, social neuroscience, and decision neuroscience, to name a few. The point is that these are exciting times in the brain sciences, and neuromarketing is the beneficiary of all these fields.

Understanding the New Scientific Foundations of Neuromarketing Neuromarketing is a distinctive approach to market research because it’s based on new knowledge and findings from the brain sciences. This rich and rapidly growing body of knowledge provides many new perspectives on understanding consumer behavior. We call this new view of the consumer

Chapter 1: What Neuromarketing Is and Isn’t the intuitive consumer model, as opposed to the rational consumer model that underlies most traditional market research. (We discuss these two models in detail in Chapter 2.) In this section, we offer an overview of some of the key findings that underlie the intuitive consumer model and neuromarketing. Brain science tells us that the typical consumer is not a slow and careful deliberator when it comes to buying preferences and decisions, but instead is a cognitive miser, equipped with a brain that is adapted by evolution to conserve energy and produce fast and efficient consumer decisions and actions, not deep and logical assessments of marketing messages and purchase opportunities. Our consumer brains are attracted to both the new and the familiar, and they prefer the simple to the complex. These propensities are built into the circuitry of the brain, and they most often impact us below the level of conscious awareness. This new picture of the human brain changes our understanding of how people see and interpret the world around them. This understanding has many implications for market research, which we introduce in Chapter 2 and cover in detail in Chapter 5. The most important of these implications is that human beings actually have very little awareness of why they do the things they do. This means that when people are asked by researchers about what they like or what they’ll buy in the future, their answers are often guesses about what they think or will do. These guesses have been shown to be no more reliable and accurate than the guesses people make every day about what other people are thinking or going to do. People aren’t lying or trying to deceive researchers when they make these guesses; they’re literally unaware of the real causes and reasons for their actions. This finding sets the fundamental challenge for market research. It’s also the reason that neuromarketing has emerged in market research, because neuromarketing techniques hold the promise of measuring consumer responses that occur below the level of conscious awareness. Many additional insights flow from this new science-based picture of the intuitive consumer. We focus on three more aspects of this picture in Part II: how emotions impact consumer decisions and behavior, how nonconscious goals drive decisions and actions, and how consumers really make decisions. Modern brain science has made great strides in understanding the role of emotions in consumer behavior. Emotions operate at both conscious and nonconscious levels. They deeply impact our perceptions, beliefs, and attitudes, even when we aren’t aware of them. They heavily influence what we notice (by directing attention), as well as what we remember (by triggering memory). We cover this topic thoroughly in Chapter 6.

11

12

Part I: The Brave New World of Neuromarketing The way in which our brains direct us toward any kind of decision and action, including consumer decisions and actions, is through the activation, pursuit, and attainment of goals. This is the basis of the motivational system that drives us, a system that has evolved over millions of years. What we’ve learned from brain science, mostly in the last decade, is that goals can operate nonconsciously, as well as consciously. Contrary to our conscious experience, we’re constantly activating and pursuing goals that we may have no idea exist. This finding has huge implications for marketing and consumer behavior — for both marketers and consumers. We consider these implications in Chapter 7. Our understanding of human decision making has been revolutionized in the last 40 years. We used to see decision making as a conscious, deliberative process that could be reconstructed simply by asking a person to recount how he or she came to a particular decision. Today we know that people use different systems in the brain to make different kinds of decisions and that many decisions occur automatically, below the threshold of conscious awareness. Consumer decisions are also highly influenced by situational factors, such as how a product is presented in a store or what other products it sits next to. These situational effects have been studied extensively in the new field of behavioral economics. A large body of research shows that these effects also often occur without conscious awareness of their impact. With so many nonconscious influences on consumer decision making being uncovered, we need to take a new look at the power of traditional persuasion in marketing and advertising. We find that persuasion is probably less important in successful marketing and advertising than it was previously believed to be. Chapter 9 looks at consumer decision making in detail. Neuromarketing is built on these insights and many others derived from brain science. It borrows the tools and technologies developed in the brain sciences and applies them to the world of marketing and consumer behavior. The underlying science will continue to progress, and neuromarketing will continue to benefit from this vibrant scientific foundation.

Exploring Where Marketers Are Using Neuromarketing Today Neuromarketing is being used today by marketers in many research areas. In Part III, we tell you how it’s being used, what results are being achieved, and how it’s likely to be used in the future, in six key marketing areas:

Chapter 1: What Neuromarketing Is and Isn’t ✓ Brand: Understanding brands and branding is an area in which neuromarketing is a natural fit. Brands are essentially ideas in the mind, and they draw their strength by making connections with other ideas in the mind. A strong brand is one that triggers deep associations with related ideas that keep that brand at “top of mind” for consumers. In Chapter 9, we show how strong connections in long-term memory make leading brands so hard to displace. We also show how neuromarketing techniques can be used to measure brand effects that consumers may not even know exist. ✓ Product: Product innovation and package design are two research areas in which neuromarketing is making significant inroads. Because people have a hard time predicting what they’ll like or do in the future, neuromarketing provides alternative ways to observe when a new idea is resonating positively with consumers and when it’s generating a gigantic “Huh?” We cover these and other uses of neuromarketing in product and package research in Chapter 10. ✓ Advertising: Advertising research is an active area for neuromarketing. How advertising works and what makes one ad more successful than another have always been a bit of a mystery. Neuromarketing offers new tools and techniques that illuminate, if not completely solve, this mystery. In particular, brain science leads us to the intriguing idea that ads may work best when they aren’t paid attention to, and that the repetition of positive emotional connections, rather than persuasive messaging, may be more effective at reinforcing brands and boosting sales. We discuss these and other ideas about ads and the brain in Chapter 11. ✓ Shopping: Shopping and in-store marketing are research areas where neuromarketing has much to offer. Shoppers expend surprisingly little conscious thought in the shopping experience. They pick up a huge number of visual and other sensory cues as they navigate their shopping journey, but they usually aren’t aware of most of them. Situational factors are highly influential in determining shopping outcomes, often at the expense of shoppers’ conscious intentions. How neuromarketing can be used to test shopper reactions in both real and simulated shopping environments is covered in Chapter 12. ✓ Online: Closely related to in-store shopping experience is online shopping experience. But there are important differences. In the online world, advertising and buying can exist right next to each other, with no need for consumers to delay gratification until they make their next trip down to the mall. As a result, the activation, pursuit, and attainment (or frustration) of consumer goals is much more immediate and dynamic in online shopping. For more details on the implications of this unique situation and how the human brain has adapted to online experience, see Chapter 13.

13

14

Part I: The Brave New World of Neuromarketing ✓ Entertainment: The final marketing area we explore in Part III is entertainment. Although people are better able to identify when they’re being entertained than when they’re being persuaded, they have very little conscious access to why they find one TV program, movie, or video game more entertaining than another. Brain science provides some useful insights into what makes a story interesting and how interest is represented in the brain. This opens up the possibility of neuromarketing testing of entertainment programming. We look at this research in Chapter 14.

Explaining How Neuromarketing Measures Consumer Responses In Part IV, we shift our focus from sources and applications of neuromarketing to the basics of neuromarketing testing — how neuromarketing measurement techniques differ from traditional market research and from each other — and how they’ve been adapted from the tools and technologies of brain science. First, we emphasize that although neuromarketers criticize some assumptions underlying traditional market research, there remains an important place for these approaches among modern research methodologies. In Chapter 15, we review the three “workhorses” of market research — interviews, focus groups, and surveys — and discuss when they make sense, and when they present risks and limitations. Looking at the new neuromarketing research tools and techniques, we see in Chapter 16 that they fall into two general categories: approaches that measure responses of the body to marketing, and approaches that measure responses of the brain. Each approach captures a different kind of signal, and each comes with a different set of pros and cons as a measurement technology. In Chapters 16 through 18, we review these methods in detail. The most important physiological or biometric measures (based on body signals) used in neuromarketing include the following: ✓ Facial expressions: The human face registers a wide variety of emotional states. Facial expressions can be read at two levels: observable changes in expressions (for example, smiles or frowns) and unobservable micro-muscle changes (for example, contractions of muscles associated with positive and negative emotional reactions). Facial expression measures have been found to be robust indicators of positive or negative emotional responses (called emotional valence).

Chapter 1: What Neuromarketing Is and Isn’t ✓ Eye tracking: The measurement of eye movements and pupil dilation while viewing an object or scene. Eye tracking has many uses in neuromarketing, both as an independent tool and as a supplement to other measures. The speed and direction of changes in gaze patterns provide valuable indicators of attention, interest, and attraction. ✓ Electrodermal activity: A measure of perspiration on the skin, usually measured at the fingertips. The signal increases with increased emotional arousal (stimulation or excitation of the nervous system). A limitation of this measure is that it cannot distinguish between positive and negative emotional valence. ✓ Respiration and heart rate: These measures focus on the beating speed of the heart and how deep and fast a person is breathing. Heart rate has been found to slow down momentarily when attention increases. Fast and deep breathing is associated with excitement, while shallow breathing can indicate concentration, tense anticipation, or panic and fear. ✓ Response time: One way that nonconscious brain processes reveal themselves in behavior is by facilitating or interfering with the speed of response to word comparisons or visual choices. Response-time measures provide a simple and accessible way to test the strength of association between different concepts. They’ve been used successfully by neuromarketers in brand, product, and package testing. Neurological or neurometric measures (based on brain signals) tend to be both more complex and more accurate than body measures. Sometimes the extra effort and cost associated with these technologies is worth it; other times not. It depends on the research question being asked. Three brain signal techniques are commonly talked about in discussions of neurological neuromarketing measures: ✓ Functional magnetic resonance imaging (fMRI): This technique is the favorite of academic researchers because it enables the precise imaging of activity anywhere in the brain. It does this by measuring blood flow. When parts of the brain become active, blood flows to them. Because blood contains iron, this flow can be traced by a massive magnet that surrounds the head of the person being studied. fMRI machines are very expensive but are available at most hospitals, universities, and independent imaging centers. They’re indispensible for testing theories about how the brain works, but some neuromarketers consider fMRI — because of its cost, complexity, and artificial testing environment — to be overkill for market research testing. ✓ Electroencephalography (EEG): Probably the most popular neuromarketing technology because of its relatively low cost and manageable equipment requirements, EEG measures the strength at the scalp of very small electrical fields generated by brain activity. It’s a well-established

15

16

Part I: The Brave New World of Neuromarketing technology that benefits from a massive academic literature. The biggest limitation of EEG is that it can’t reliably measure changes in electrical activity deep in the brain. ✓ Magnetoencephalography (MEG): This technique measures minute changes in magnetic fields produced by the brain. It has many advantages but requires multi-million-dollar machinery that must be supercooled to near absolute zero to operate. It’s used in academic studies but hasn’t caught on as a practical method for commercial neuromarketing. All these techniques are discussed in detail in Chapter 16. Their pros and cons for different types of research are covered in Chapter 18. Also in Chapter 18, we discuss how some leading companies are integrating different types of research — both neuromarketing and traditional — within a unified organizational structure to provide a single integrated, multidimensional view of consumer interests and behaviors. Chapter 17 is devoted to the topic of neuromarketing on a budget. We describe three strategies that can be used to inexpensively gain neuromarketing insights for your business: ✓ Response-time studies: Timing synchronization software can be used to measure response times in thousandths of a second. Whether carried out online or in a computer lab, response-time studies can provide inexpensive insights into brand associations, product “pop out” in shopping contexts, and responses to both static and dynamic advertising. ✓ Online services (eye tracking and facial expression analysis): Online studies can now incorporate both eye tracking and facial expression recognition through the use of webcams or built-in computer cameras. Combined with clever experimental designs, gamification (putting game elements into online experiments), and crowdsourcing (using virtual betting to predict marketplace outcomes), these capabilities provide opportunities to test thousands of online study participants cheaply and quickly. ✓ Behavioral experiments: Behavioral economics provides insights and principles about how people make decisions in real-world situations. We show how you can set up and run behavioral experiments in your store or on your website, testing the results of different configurations relatively quickly and easily.

Succeeding with Neuromarketing Studies Part V is devoted to practical and ethical issues relating to neuromarketing research. In Chapter 19, we identify five practical aspects of neuromarketing

Chapter 1: What Neuromarketing Is and Isn’t studies that you need to understand if you want to get the most out of working with a neuromarketing vendor. Because neuromarketing is a new field, you’ll want to be sure your vendor has a solid foundation in each of these areas: ✓ Experimental design: Is your experiment designed to efficiently test hypotheses and control for external factors that could confound or blur study results? ✓ Measurement validity and reliability: The extent to which a vendor’s metrics have been tested to answer two key questions: Do they measure what the vendor says they measure, and are they generalizable to new samples and future situations? ✓ Safeguards against reverse inference: This term refers to a common type of logical inference in neuromarketing studies: “If brain signal A is active, then mental state B must be active.” But even if mental state B is always accompanied by brain signal A, it does not follow logically that “every time brain signal A is active, mental state B must also be active.” Brain signal A can be occurring for other reasons. Your vendor needs to be able to explain if and how it handles this inference challenge. ✓ Statistical significance: Proper statistical tests need to be applied to determine the probability that a result is not produced by chance. Given the complexity of many neuromarketing designs, the proper tests are not always easy to identify. ✓ Normative data (comparative benchmarks): Can your vendor provide data that correlates its measures with behavioral measures of marketing success? For example, advertising research companies usually provide normative data comparing scores on their metrics to product sales or other performance measures in the weeks after tested ads are shown. What normative data does your neuromarketing vendor have to show the predictive value of its measures? We also propose that you review a simple but critical “pre-flight checklist” before committing to any neuromarketing study. The checklist consists of five questions: ✓ Are you testing the right hypothesis? ✓ Do you have the right experimental design? ✓ Are you testing the right materials? ✓ Are you sampling from the right population? ✓ Do you know how you’ll use your results?

17

18

Part I: The Brave New World of Neuromarketing With the information covered in this book, we believe you’ll be fully equipped to answer each of these questions and conduct a valid, reliable, and insightful neuromarketing study. We provide more details about each question in Chapter 20. Two lessons remain in learning how to succeed with neuromarketing studies: how to pick the right partner to help you conduct neuromarketing research, and how to make sure any neuromarketing studies you do meet the highest ethical standards. In Chapter 21, we look at how to pick the best neuromarketing partner for your needs. As the field matures, we’re seeing the emergence of two types of partners you can consider: ✓ Neuromarketing vendors: These are firms that perform neuromarketing studies for you, using their methodologies of choice. Each vendor brings its own expertise and experience to your study, and vendors tend to work in relative isolation from each other. ✓ Neuromarketing consultants: These are a different breed of service providers that are beginning to appear on the neuromarketing scene. Neuromarketing consultants don’t perform studies themselves; instead, they provide advice and counsel to companies and firms that want to conduct neuromarketing studies or a larger research program but want a partner to help them do many of the things covered in this book: Pick the right vendor(s), ask the right questions, oversee the project, and provide independent interpretation of the results. Neuromarketing consultants sometimes act as general contractors, assembling the research team, providing oversight of the project, and helping integrate the results into your business decision making. Details about these two types of partners and the pros and cons of using each are discussed in detail in Chapter 21. For some potential users of neuromarketing, the most important issues surrounding its adoption are ethical, not methodological or organizational. Due to the controversies that have followed neuromarketing over the years, many marketers want to know if neuromarketing has the same ethical foundations and standards that other market research disciplines have. In Chapter 22, we outline a set of ethical safeguards and principles that we believe every neuromarketing vendor should adopt to ensure that every study is safe, accurately portrayed, and trustworthy. Many of these safeguards and principles have been introduced by others, including distinguished neuro-ethicists. We summarize them under three key principles:

Chapter 1: What Neuromarketing Is and Isn’t ✓ Protecting the rights of research participants, including confidentiality, full disclosure, and safety, in line with human subjects guidelines of the U.S. Health and Human Services Department and other regulatory agencies around the world ✓ Representing research and results fairly and accurately in all media and marketing communications ✓ Providing evidence for the validity and reliability of all neurometric and biometric measures to potential buyers of neuromarketing services In addition, we discuss the emergence of industry standards for neuromarketing from research organizations such as ESOMAR (www.esomar.org) and the Advertising Research Foundation (ARF; www.thearf.org). We look in detail at the neuro-standards initiative for advertising research launched by the ARF and sponsored by some of the most respected advertisers in the world. Finally, we revisit some important legal, social, and policy questions relating to neuromarketing. We argue, based on the evidence we’ve assembled in this book, that neuromarketing is a legitimate form of market research that will continue to increase in popularity and provide value to the marketing community. It isn’t brainwashing or a conspiracy to make people over-buy or over-consume. It needs to be conducted ethically under the same standards as any other research methodology. We’re optimistic about the future of neuromarketing and believe it can be a source of good for society. We close Part V by discussing three areas where neuromarketing can have a positive impact on public policy: in public service advertising, in public policy design and implementation, and in education. Neuromarketing is a new way to think about marketing. It has emerged over the last decade because the brain sciences — especially the fields of neuroscience, behavioral economics, and social psychology — have provided us with a new and challenging picture of how human beings think, decide, and act in the real world. It was just a matter of time before this picture would be applied to consumer behavior. As we show in the next chapter, what it tells us is that much of what we thought was true about consumer thinking and behavior is actually wrong.

19

20

Part I: The Brave New World of Neuromarketing

Chapter 2

What We Know Now That We Didn’t Know Then In This Chapter ▶ Understanding how consumer behavior has been viewed and tested for years ▶ Discovering how people perceive and interpret the world around them ▶ Thinking about people as intuitive consumers, not rational consumers

U

nderstanding neuromarketing means accepting some radical new ideas that are very different from traditional ways of thinking about consumers, marketing, and advertising. Neuromarketing asks marketing professionals to look at what they do in a very different way. In this chapter, we give you all the basics you need to know about the old way of thinking about thinking, and the new way that led to neuromarketing. We start by looking at advertising, because advertising research was the first type of marketing research to appear. We review how people have looked at advertising for years, so you have a sense of how this kind of research developed. We show that this research was based on a picture of how the consumer thought and made decisions, called the rational consumer model. Then we show you what brain science has discovered about how people actually perceive and interpret the world — because when you understand that, you know why neuromarketing has emerged hand-in-hand with the new science. Finally, we end the chapter by proposing a new way of thinking about the consumer, the intuitive consumer model.

How We Used to Think about Consumers In the “good old days” — before brain science started making things more complicated — marketers tended to think of consumers as basically rational information processors, with a little bit of irrational emotion thrown in. This rational consumer model may remind you of a character from Star Trek, pointy-eared and super-logical Mr. Spock. In this section, we use Spock to explain the rational consumer model. Then we explain how early ideas about

22

Part I: The Brave New World of Neuromarketing advertising and marketing were designed around this model of the consumer. We delve into how the effectiveness of marketing and advertising was tested. And we point out the flaws of this old way of viewing consumers.

The rational consumer: Mr. Spock goes shopping Mr. Spock aspires to be a purely rational and logical decision maker, often to the irritation of fellow crewman Dr. McCoy, the ship’s physician, who relies more on emotions to make decisions. Although consumers actually act a lot more like Dr. McCoy than Mr. Spock, the rational consumer model was the gold standard for years. Consider the attributes that logical Mr. Spock would bring to the shopping experience: ✓ Mr. Spock thinks in terms of information. His brain seeks information, stores information, and retrieves information to make decisions. Emotions play no important role in these processes. Mr. Spock is aware of different brands and products because he’s been collecting and remembering information about them throughout his lifetime. ✓ Mr. Spock can retrieve this information, completely and accurately, at any point after he has encountered it. His brain operates like a computer hard drive. ✓ Mr. Spock rationally determines his preferences. Among any set of alternatives, Mr. Spock’s preferences are clear, unambiguous, and unchanging (as long as the attributes of the alternatives don’t change). ✓ Mr. Spock uses cost-benefit calculations to make a purchase decision at the point of purchase. These calculations determine, for example, whether Mr. Spock will place brand A or brand B in his shopping cart. ✓ Mr. Spock’s preferences can be changed if, and only if, he is presented with new information that alters his beliefs about products. Mr. Spock can be influenced to change his behavior, but only if he’s persuaded that his previous beliefs were wrong. ✓ Marketing and advertising communications are messages that present rational, logical arguments about brands and products. These communications are designed to persuade Mr. Spock to choose product A over product B at the point of purchase. ✓ The only way marketing and advertising communications can influence Mr. Spock is if he consciously recalls their persuasive arguments. When he remembers them, he can apply them in his purchase decision cost-benefit calculation. Modern neuroscience, social psychology, and behavioral economics have raised powerful objections to each of these assumptions. In the next section,

Chapter 2: What We Know Now That We Didn’t Know Then we show how these assumptions have impacted marketing and advertising research for over a century.

Rational models for rational marketing to rational consumers Early pioneers of marketing and advertising research must have had something very similar to this rational consumer model in mind when they formulated the first “advertising effectiveness” theories at the start of the 20th century. These theories were derived from the best model of successful persuasion available at the time, the door-to-door salesman. In 1903, advertising was famously defined as “salesmanship in print.” Most advertising in those early days was designed to simulate the door-to-door salesman — rapidly conveying a persuasive message for the purpose of converting a prospect into a buyer. Selling through advertising was viewed as a rational, information-based process with no place for emotional appeals or what we now call “creative” in advertising. Like a good door-to-door salesman, a good ad delivered as much information as required, made a persuasive argument for the product, and then explained how to buy the product. That was how it worked. The AIDA model was one of the first translations of sales strategy into advertising strategy. It’s usually attributed to E. St. Elmo Lewis, who formulated it in various writings over the first decade of the 20th century. Lewis’s insight was that advertising worked through a hierarchy of effects that had to be achieved in a fixed order to produce positive results. The acronym for this model was AIDA, derived from each of the four steps:

1. Attention: First, make your customer aware of your product.



2. Interest: Next, pique your customer’s interest by demonstrating the advantages and benefits of your product.



3. Desire: When interest is established, convince your customer that he or she wants or desires your product to satisfy his or her needs.



4. Action: Finally, lead your customer to take the actions required to purchase your product. Several other models were developed over the following decades by both academics and practitioners that presented different kinds of hierarchy of effects models, all of which were variations of the original AIDA model. For example, in 1961 Roger Colley wrote that “advertising moves people from unawareness, to awareness, to comprehension, to conviction, to desire, to action.”

23

24

Part I: The Brave New World of Neuromarketing All these formulas for advertising success viewed the consumer as a rational, information-processing Mr. Spock. Information triggered attention, generated interest, drove desire, and motivated action. The trick of advertising (and later, marketing) was to send messages to the consumer that would guide this journey from unawareness to purchase. The trick of advertising and marketing research, in turn, was to measure whether these effects were occurring.

Measuring effectiveness the old-fashioned way Over the last century, researchers developed and refined various tools and methodologies to test marketing and advertising effectiveness based on the principles covered in the previous sections. Because researchers believed that the rational consumer was engaged in conscious, rational calculations, the natural way for them to learn about those calculations was to ask consumers what they were thinking. Three methodological traditions form the bedrock of traditional market research techniques used to gather information about what consumers think about messages, products, and brands: ✓ Interviews: Interviewing techniques include a wide variety of methods, from quick mall intercepts to intensive “depth interviews” that probe the deep sources of consumer desires and needs. All are characterized by a face-to-face interaction between a subject (the person being interviewed) and an interviewer (the person asking the questions). ✓ Focus groups: Focus groups are a natural extension of interviewing. Instead of interviewing one consumer at a time, focus groups bring a group of consumers together under the direction of a moderator who guides a group discussion of the topic under consideration (such as candidate ads, a new product idea, or a comparison of product brands in a particular category). The idea is that the interactive nature of the discussion will uncover additional insights that interviewing consumers in isolation would miss. ✓ Consumer surveys: Consumer surveys are structured questionnaires designed and administered to elicit answers to questions in a controlled and generalizable way. Properly executed, surveys can accurately estimate the opinions of millions of people from a sample of hundreds. From door-to-door surveys, to telephone surveys, to online surveys, this technique has been the mainstay technique of market research since the 1940s. All these methods share two important attributes: They rely on people’s verbal self-reports (what people say) to identify their attitudes, preferences,

Chapter 2: What We Know Now That We Didn’t Know Then and behaviors, and they depend on people’s memories to accurately recall what they’ve done or thought in the past.

When rational models fail Everybody in the market research business knows that self-reporting measures — whether derived from interviews, focus groups, or surveys — often produce misleading results, send researchers in the wrong direction, and result in ads that don’t have any impact or in products that linger on the shelves. Traditional market researchers tend to see these problems as fixable with better techniques and controls — for example, more clever question wording in surveys, or larger, more representative samples of consumers being surveyed. These improvements are worthwhile, and they continue to have a positive impact on the quality and usefulness of these methodologies. Neuromarketing researchers take a more radical view and see things somewhat differently. They recognize a number of flaws in the self-reporting model that can’t be fixed with incremental improvements. These flaws revolve around the concept of accessibility. Self-report measures assume — following the rational consumer model — that people have conscious accessibility to their mental states (that is, they know what they know). A vast amount of research shows conclusively that people don’t actually know what they know. In fact, people often don’t know the real reasons why they do things, or have certain attitudes or opinions. Their mental processes involving perception, evaluation, and motivation may never reach the level of conscious awareness. This is the fundamental dilemma of market research that neuromarketing addresses. By bringing the insights of brain science to the world of consumer attitudes and behaviors, neuromarketing is building a portfolio of research techniques and methodologies that are grounded in more realistic assumptions than the models that underlie traditional market research tools.

How People Really See and Interpret the World In contrast to earlier models, modern neuroscience, social psychology, and behavioral economics give us a much more realistic, but also more complex, understanding of how people think, decide, and act in the real world.

25

26

Part I: The Brave New World of Neuromarketing In this section, we present a simplified version of this new model. It doesn’t contain every nuance that academic researchers dwell upon, but it does show how neuroscience and related disciplines provide a more realistic foundation for looking at consumer thinking and behavior. Our model has four key steps (see Figure 2-1):

1. Forming impressions: As we interact with the world around us, our brains form impressions from input we receive through our senses.



2. Determining meaning and value: We determine the meaning and value of the impressions we’ve formed by making rapid mental connections to other things we have stored in memory.



3. Deliberating and analyzing: We deliberate and analyze by engaging in internal “mental conversations” with ourselves.



4. Speaking and acting: We express ourselves by speaking and acting — that is, we engage in actual behavior.



Figure 2-1: Four ways we use our brains.

Illustration by Wiley, Composition Services Graphics

This model helps us understand the roles played by conscious and nonconscious brain processes, and how they interact: ✓ Our perceptual systems produce impressions in a completely nonconscious way. We have no conscious access to how our brains take in visual, auditory, or other sensory information and turn them into perceived sights, sounds, smells, and so on. ✓ Similarly, how we determine meaning and value by connecting our impressions to other concepts and ideas in our long-term memory occurs outside our awareness. ✓ Deliberating and analyzing are usually conscious processes. They include a wide variety of thinking activities we’re directly aware of, such as memorizing and remembering, calculating, and planning. ✓ Speaking and acting are usually conscious. Expressions are behaviors that are observable by others, through hearing and seeing us.

Chapter 2: What We Know Now That We Didn’t Know Then This simple model has some interesting variations. For instance, it’s possible to get from determining meaning and value to speaking and acting without intervening deliberation or analysis. This is what people normally mean by “doing something without thinking about it.” Examples include learned skills like driving or riding a bicycle.

Forming impressions: How we take in the world around us “Common sense” tells the average non-scientist that our eyes and ears act like video recorders, creating an accurate recording of the world around us that we then access through memory when and where we need to. The feeling we all have in our conscious minds is that we pretty accurately perceive everything in the world around us, directly and objectively. But modern brain science tells a different story: People’s impressions of the world are largely created by processes they aren’t aware of, and are very different from the physical signals that enter their sensory organs. For example, the visual images that hit the back of the human eye are actually upside down, but our brains automatically turn them right side up so we can see the world in the most advantageous orientation. Experimenters have put upsidedown glasses on people to test this capability, and sure enough, after a couple hours, the brain flips the visual image back to right side up. And when the glasses are taken off, it flips the image back again. Our nonconscious perceptual processes not only intervene in the formation of impressions, but also fill in a lot of details that we don’t actually perceive directly. For example, your eyes are able to focus on only a very small area, about the size of a thumbnail if you extend your arm out in front of you. But your impression is that your full field of vision is clear and in focus. You create this impression by constantly, automatically, and extremely rapidly moving your focus around the full visual field. Your brain then assembles all these micro impressions into a single, stable picture that you see as a full, clear image. And even that impression includes a lot of automatic “filling in,” because you don’t have time to scan the whole field as fast as the field can change. Impression formation is extremely important to neuromarketing. If our impressions of the world are largely created in our brains, and marketers want to build impressions that attract and influence our brains, then marketers naturally want to know what factors influence that creation process. When we look at print ads in a magazine or billboards along the highway, what do we actually see? What draws our attention, and what are we likely to remember? New neuromarketing technologies and tools can answer these questions in new ways, without asking people directly.

27

28

Part I: The Brave New World of Neuromarketing

Determining meaning and value: Creating connections in our minds When we bind impressions with meanings and value, we create concepts or conceptualizations of those impressions. This process of conceptualizing is so fast and automatic that we barely realize it’s happening. But it’s incredibly important to how we interpret and respond to the world. Early psychologists used to think of conceptualization as just another part of a perception or impression. They assumed that when a person saw a dog, recognizing it as a dog was just a part of seeing it. What modern brain science tells us is that the process of forming concepts is quite complicated and far from obvious. It involves the rapid and automatic association of a network of category and attribute memories to an impression. The result is that people usually feel that they “know” what they’re looking at instantaneously. Only when our brains encounter impressions at the edge of our implicit categorization models do we become aware of the mental processing involved. For example, you can usually distinguish a man from a woman without mental effort. But we’ve all been in situations where we’ve seen someone and not been sure if the person was male or female. (Saturday Night Live created a skit about this, with the character Pat.) When you meet a person whose gender isn’t obvious right off the bat, you find yourself searching for attribute cues — body shape, depth of the voice, and so on.

Conceptualization (the process of forming and strengthening concepts) is a learning process. It’s important to marketers because it helps us understand how brands work, which is a key element of marketing and advertising. A brand is essentially a carefully cultivated concept in a mental network of connections including products, companies, attitudes, meanings, aspirations, and other associations. Companies spend billions of dollars every year trying to strengthen positive connections to their brands. But because the process of forming concepts largely occurs outside conscious awareness, consumers can’t easily articulate either the existence of those connections or their relative strength or durability. Neuromarketing gives us new tools for exploring and mapping the conceptual networks surrounding brands and products in the minds of consumers. Here are two brain processes that help us do this:

✓ Facilitation: When we bring an idea to conscious awareness, our brains automatically “facilitate” concepts that are related to that idea in memory. These related concepts are not brought to conscious awareness directly, but they are, in effect, prepared for conscious activation if needed.

Chapter 2: What We Know Now That We Didn’t Know Then ✓ Natural assessment: This refers to the brain’s ability to automatically and nonconsciously attach many attributes or characteristics to perceived objects. Some of these are physical properties like size, distance, and loudness, but others are more abstract and can have a big impact on consumer attitudes and behavior, such as similarity, causal tendencies, novelty, emotional assessment (liking and disliking), and mood. Facilitation produces distinct signals in the brain, and these signals can be used to determine the strength of association between concepts as they’re being activated. This provides the basis for new measures of brand and product associations in the consumer’s brain, and new tools for monitoring the impact of marketing and advertising on brand concepts over time. Natural assessment of liking and disliking is an especially important process that people perform innumerable times per day to assign value to the things and situations they experience. Experiments have shown that human beings can translate a positive or negative emotional response into an approach or avoidance physical reaction (for example, leaning forward or away) in less than a quarter of a second — all without being consciously aware that they’re doing it. The formation of meanings and values involves critical brain processes that neuromarketing methods and tools allow us to observe and measure directly for the first time. Peering into these nonconscious processes creates the potential for a much deeper understanding of the conscious processes we discuss in the next two sections: deliberating, analyzing, speaking, and acting.

Deliberating and analyzing: What we say when we talk to ourselves Before the discovery of the nonconscious, people believed they had full access to their thoughts and feelings, or at least access enough to be able to express accurate observations about their internal mental states. In the process of deliberation, people simply query their own minds to determine what they’re thinking or feeling about something. Market researchers used to believe that this process was accurate enough to provide good guidance for predicting future consumer attitudes and actions. And so the multi-billiondollar survey research industry was born. Modern brain science has demolished this hopeful assumption. People are able to retrieve some things with good accuracy, such as a relatively recent physical action like “Did I take out the garbage yesterday?” But we’re notoriously bad at identifying the causes of our behavior through deliberation. This isn’t because we’re forgetful, but because those causes are literally outside

29

30

Part I: The Brave New World of Neuromarketing our conscious awareness. We haven’t forgotten them — we just never knew what they were in the first place. People still use deliberation pretty much every moment of every day. They engage in a constant internal dialog, activating a spectrum of mental activities like: ✓ Retrieving memories: “There’s Marge and her husband. I think his name is Bill.” ✓ Interpreting the past: “I wonder what she meant by that.” ✓ Anticipating the future: “What should I make for dinner tonight?” ✓ Planning: “If I’m going to make spaghetti, I need to pick up some tomato sauce on the way home from work.” ✓ Forming intentions: “I’ll pick up some ice cream, too. I usually get vanilla, but today I feel adventurous, so I’ll get chocolate!” ✓ Evaluating/judging: “That clerk in the grocery store sure was rude.” ✓ Simulating: “Maybe I would’ve reacted the same way if someone spilled orange juice all over me.” ✓ Calculating: “Six times $2.49 for each bottle of orange juice is. . . .” ✓ Reasoning: “If I complain to the clerk, he’ll call his boss. If he calls his boss, I’ll have to admit I dropped the orange juice bottle. If I admit that, his boss will. . . .” ✓ Rationalizing: “I must’ve been in a bad mood at dinner tonight because of that upsetting incident at the grocery store.” One mistake the rational consumer model makes is assuming that most evaluations and judgments are generated by conscious deliberation, so they can be captured later by replaying those thought processes in a verbal self-report. But lots of research now shows that deliberation is much more likely to be devoted to justifying an evaluation rather than creating it. As with impressions, our evaluations and judgments are largely generated nonconsciously and then rationalized (via deliberation) and explained (via speaking and acting) after the fact. Sometimes people seem to jump directly from concepts to actions, with very little deliberation in between. There are two main circumstances in which this happens: ✓ When our actions are derived from acquired skills: Acquired skills are capabilities we’ve learned through practice that become automatic over time. Examples are skills like riding a bicycle or driving a car. Through repetitive learning, these activities convert from conscious, deliberate actions to automatic actions. Acquired skills don’t play much of a role in consumer behavior.

Chapter 2: What We Know Now That We Didn’t Know Then ✓ When our actions are derived from habits: Habits, in contrast, play a huge role in consumer behavior. Habits are formed through use and experience. If you’ve been using the same brand of toothpaste for years, and you have no reason to be dissatisfied with it, you’ll probably completely ignore all the other toothpastes on the shelf — despite their bright packaging, promotional displays, and price discounts — and just grab your usual brand. Habits depend on highly developed conceptual connections that immediately trigger expressions (buying behavior). Because they bypass conscious deliberation, they’re very hard for marketers to overcome. Why? Because deliberation is where counterarguments are formed and where conscious intentions are made. Habits provide huge advantages to established, well-known brands, and they often represent the biggest obstacle to new brands and products trying to lure buyers away from established leaders.

Speaking and acting: Finally, we act! (Or maybe just talk about it) Two kinds of expressions are critical to marketing and market research: ✓ Verbal expression: Self-reporting of opinions, attitudes, preferences, and predictions of future behavior ✓ Consumer behavior: Shopping, buying, and using products and services Market researchers used to think that these two kinds of expressions were closely connected. The rational consumer model assumes that all our decisions and actions are based on conscious deliberative reasoning, which naturally leads to the idea that we can accurately access and verbally express our true reasons for acting one way or another. Much of traditional market research is built on this assumption — if you want to know whether people will buy your product, just ask them. Alas, this is another hopeful belief that modern brain science has demolished. What the most recent research tells us is that “doing” and “thinking about doing” are only weakly connected. Neuroscience today is busy mapping the paths of these processes through the brain, and social psychology and behavioral economics are busy determining the implications of these differences for individual and collective behavior. The results to date paint a very different picture from the one depicted in the rational consumer model.

Self reporting: “Say it ain’t so” Verbal expressions, scientists have found, are, in fact, very poor reflections of actual internal mental states. This is hard to accept if you embrace the

31

32

Part I: The Brave New World of Neuromarketing rational consumer model, but it’s completely understandable if you take into account recent discoveries about nonconscious processes. The mismatch between verbal expressions and actual mental processes has been known among psychologists for some time. It was first documented by Richard Nisbett and Timothy Wilson in 1977. The gist of what Nisbett and Wilson said is that, when asked what we think, we guess in exactly the same way we guess when trying to figure out what other people are thinking. Perhaps the fact that we don’t have access to our nonconscious brain processes wouldn’t be so bad for market research if people recognized that they didn’t have access to their nonconscious brain processes and showed some humility in talking about those processes to market researchers. But what Nisbett and Wilson documented way back in the era of disco, and what mountains of later research has confirmed, is this: Not only do we make up plausible explanations of our mental states — what we remember, what we like, why we like it, what we’ll do in the future, and so on —but we vastly overestimate the accuracy of our own reports. So, not only do we make up stories, but we firmly believe the stories we make up. And we tell those stories to market researchers with the utmost sincerity. And those market researchers take us at our word and produce products that we sincerely told them we would buy. Then everybody scratches their heads when those products sit on the shelf because people didn’t really want them after all. Scientists have come up with a great word for this process of making stuff up and then believing it’s true. They call it confabulation (the replacement of a gap in our memories with a falsification that we truly believe to be true). Confabulation may be public enemy number one for marketers and market researchers. It costs companies billions of dollars a year. Countering confabulation is probably the most important justification for the development and adoption of neuromarketing research techniques.

Consumer behavior: The gold standard of market research data In contrast to verbal expressions, actual consumer behavior is the real deal of market research. This is data that all marketers ultimately care about — where consumers shop, how they shop, what they buy, how much they pay, how often they buy, what they tell their friends about what they buy, and so on. Large research companies collect huge amounts of direct consumer behavior data detailed down to the level of individual point-of-sale (POS) purchases by store and by time of day. That data gets crunched through complex algorithms to identify patterns in the fluctuating relationship between how much gets spent on marketing and advertising and how products perform in the marketplace.

Chapter 2: What We Know Now That We Didn’t Know Then A lot of research on consumer behavior — often called market mix modeling in the trade — looks for correlations or causal relationships between marketing expenditures and marketplace performance. In effect, this research “cuts out the middle man” in the process — that is, it cuts out the mental processes in the minds of the millions of consumers who are exposed to the marketing messaging and then spend the money that produces the marketplace performance. It assumes, for the purposes of the analysis, that all those mental processes average out to a “zero effect” over the full dataset of millions of individual instances of consumer behavior. What we see when we look at this purely input-output behavioral model of marketing is instructive. Gerard Tellis is a researcher who has studied this problem for decades. What Tellis has found is that, when you take the mind of the consumer out of the equation, advertising spending has very little impact on sales. Tellis has tracked a metric called elasticity of advertising, which measures the percentage impact on sales of a 1 percent change in the level of advertising. In other words, the metric answers the question, “If I increase my spending on advertising by 1 percent, by what percent will my revenues increase?” The results are rather startling. In his latest calculation of this measure (in 2010), Tellis and his co-authors found that, on average, a 1 percent increase in advertising generates a 0.12 percent increase in short-term sales. This number, calculated in 2010, is over 20 times less than the elasticity of price discounts (calculated in 2005), which showed that a decrease of 1 percent in price resulted — on average — in an increase of 2.62 percent in sales. With the billions of dollars spent on advertising every year, the net shortterm return is minimal. Clearly, we still have much to learn about how to produce more effective advertising. Although this average figure is rather disappointing, it has a large variance (range of values), because it’s made up of some fabulously successful advertising campaigns, some real dogs, and a lot of campaigns that had no effect on sales whatsoever. What this type of research doesn’t show is why some ad campaigns perform well above average and others perform well below average. From the perspective of marketers and marketing researchers, this is the important question. They don’t want their advertising to be average; they want it to be wildly above average. In order to separate the winners from the losers, we have to reintroduce the key missing variable in the equation — the mind of the consumer. But as we’ve seen, the mind of the consumer is not well represented by just asking the consumer what he or she was thinking. We need to look for other ways to probe these sources of consumer behavior, and that means going beyond self-reports to understand the nonconscious sources of consumer decisions and behaviors.

33

34

Part I: The Brave New World of Neuromarketing

Daniel Kahneman’s System 1 and System 2 Daniel Kahneman and his colleague Amos Tversky began a research program in the 1970s to determine how people really made decisions, as opposed to how they were assumed to make decisions. They and their collaborators produced a string of studies that showed that real people are not rational “Mr. Spock-like” decision makers, but instead, employ a kind of limited rationality, using a number of judgmental biases and shortcuts to make decisions. This work was a milestone in thinking about thinking, and Kahneman was awarded the Nobel Memorial Prize in Economic Sciences in 2002 for his and Tversky’s contributions. (Tversky died in 1996 so, unfortunately, didn’t live to share in the achievement.) Kahneman describes his model of how the brain produces decisions by talking about two distinctive systems, which he called System 1 and System 2. Here are the key characteristics of System 1 and System 2, as outlined by Kahneman in 2003: System 1

System 2

Fast

Slow

Parallel (able to handle many tasks simultaneously)

Serial (able to handle only one task at a time)

Automatic

Controlled

Effortless

Effortful

Associative

Rule governed

Slow learning (governed by habit)

Flexible

Emotional

Neutral

Source: Daniel Kahneman, “Maps of Bounded Rationality: Psychology for Behavioral Economics,” The American Economic Review, December 2003.

System 1 is our intuitive decision-making system. This is the system we use when we make snap decisions based on gut reactions. Most important, it isn’t accessible to conscious awareness. System 1 is in charge during the impression-building and meaning-creation phases of thinking. It goes about its business for the most part unmonitored by the conscious mind. It’s the system we use when we effortlessly remember a new face and then instantly recognize that face ten years later. System 2 is our deliberative decision-making system. It’s the system we use when we’re weighing alternatives or balancing pros and cons. System 2 is in charge during deliberation and analysis. It’s the system we use when we’re exercising that little voice in our head, such as when we’re trying to add 267 + 1,334.

Chapter 2: What We Know Now That We Didn’t Know Then

Replacing the Rational Consumer Model with the Intuitive Consumer Model We began this chapter by referencing Mr. Spock, the super-logical first officer on the Starship Enterprise on the TV show Star Trek. We made the case that Mr. Spock could be the poster boy for the rational consumer model that has informed marketing and market research for most of the last century. Given what we’ve learned from the brain sciences of neuroscience, social psychology, and behavioral economics, it makes sense to consider retiring the rational consumer and replacing it with the much more realistic intuitive consumer model. Once again, we have a character from Star Trek who nicely represents this new ideal — the emotion-driven chief medical officer on the Starship Enterprise, Dr. McCoy. Unlike Mr. Spock, Dr. McCoy makes his decisions based on his emotional responses to situations. He knows in his gut the right thing to do, even if he can’t articulate it clearly. In contrast to Mr. Spock, let’s imagine how Dr. McCoy would go shopping: ✓ Unlike Mr. Spock, Dr. McCoy doesn’t do a lot of deliberate thinking about the products he buys at the grocery store. His brain uses habit, experience, and emotional cues as shortcuts to making decisions. Emotions play the dominant part in these processes. He doesn’t have deep explicit memories about different products and brands, nor could he tell you what claims were made in most advertising he sees. ✓ Dr. McCoy retrieves feelings about products and brands and — to a limited extent — factual information, in a loose and spotty manner. Much of this process is below his conscious awareness, so he can’t recount it accurately. ✓ Dr. McCoy’s preferences are largely implicit and based on habit, his friends’ opinions, and his own product experience. He doesn’t usually subject his preferences to careful logical analysis. In fact, he often infers his preferences from his behavior, rather than the other way around. Among any set of alternatives, Dr. McCoy’s preferences may be logically inconsistent — he may prefer brand A to brand B and brand B to brand C, but also prefer brand C to brand A. ✓ Dr. McCoy makes most of his purchase decisions spontaneously and without much deliberate thought at the point of purchase. If you asked him why he put brand A instead of brand B in his shopping cart, he probably couldn’t give you a good reason, unless he made one up. ✓ Dr. McCoy’s product and brand preferences can be changed, not so much by providing new information as by changing the situation

35

36

Part I: The Brave New World of Neuromarketing within which he does his shopping. Dr. McCoy’s shopping behavior can be changed, but overt persuasion through logical argument is surprisingly ineffective. When he recognizes that you’re trying to persuade him, he tends to put up cognitive defenses and becomes less, not more, receptive to your message. ✓ Marketing and advertising can have a significant impact on Dr. McCoy, but they tend to do so in nonconscious ways outside his awareness. Dr. McCoy will swear to you that advertising has no effect on his behavior, but like most of his self-assessments, this one will probably be wrong. ✓ The primary way that marketing and advertising influence Dr. McCoy is indirectly, through repetitive association of positive themes and images with the advertised brand or product. Only if he’s actively considering the purchase of a particular product will he consciously seek out, pay attention to, and commit to memory information and persuasive arguments about products in his area of interest. The intuitive consumer model represented by Dr. McCoy creates many new research challenges, but it also provides a much more realistic guide for marketing and market research professionals. Neuromarketing is about embracing and exploring how this model works to develop better predictive theories and measures of how real consumers make real decisions and take real actions in the modern marketplace.

Chapter 3

Putting Neuromarketing to Work In This Chapter ▶ Seeing how neuromarketing is being applied in different marketing areas ▶ Recognizing that neuromarketing is about more than just making people buy stuff ▶ Revealing the new perspective neuromarketing provides on how consumers think

and act

N

euromarketing is not just a set of scientific ideas. As we show in detail in Part III and in summary in this chapter, neuromarketing is already at work across many of the biggest areas in marketing: branding, product innovation and design, online experience and marketing, shopping and instore marketing, advertising, and entertainment. In each of these areas, neuromarketing has already begun contributing to a deeper understanding of the drivers of consumer behavior and is offering new insights for improving marketing effectiveness. In this chapter, we provide an overview of these developments. We leave the details to Part III, where you find a chapter dedicated to each of the topics covered in this overview.

Building Better Brands with Neuromarketing Neuromarketing and branding were made for each other. Both are fundamentally concerned with how ideas are established and linked in the human mind. When first exposed to a brand, the mind may create a memory of that exposure. This memory may connect various elements — maybe an advertisement promoting the brand, a product offered under the brand, a package design, or a consumption or usage experience. Whatever elements are stored in memory, they’re connected and together form the brand memory.

38

Part I: The Brave New World of Neuromarketing When exposed to the brand again, new memories may be stored, expanding the earlier brand memory. Connections may also be made between that brand memory and other memory patterns. For example, when an advertisement shows a brand in the context of a beach holiday, the viewer’s mind may make a connection between the brand and its network of beach holiday memories. As this process unfolds, the brand memory is shaped and reshaped. As it expands and diversifies, the meaning of the brand changes and diversifies, too. This process takes place naturally in our minds. In turn, brand marketers want to influence the process by creating exposures that are meant to connect the brand memory with particular values, emotions, capabilities, and so forth. They do this through advertising, product and package innovation, shopper marketing, online engagement, and other means. The problem for marketers is how to measure brand memory. For example, when a marketing campaign tries to connect the consumer’s brand memory with a particular attribute or quality, marketers want to know if these connections actually exist in the consumer’s mind, or if they’re stronger after an advertising campaign or new product launch. Neuromarketing is at work in branding research today, helping marketers understand how brand memories are formed, how they can be shaped, and how they’re impacting consumers’ emotions, attitudes, and, ultimately, purchase decisions.

Brands are about connections Traditionally, marketers have focused only on explicit memories — that is, memories that can be clearly and definitively remembered. This is why most marketers assess the effectiveness of their marketing initiatives by measuring various forms of recall — ad recall, product recall, message recall, and so on. The underlying assumption is that if a consumer can’t recall an exposure to the brand, then the marketing initiative had no impact. Brain science research tells us that there is another type of memory, called implicit memory. These memories are nonconscious and, thus, inaccessible to recall. But they nevertheless exist in the consumer’s mind and can have a profound impact on how consumers feel about brands and what they choose to buy. The big problem for marketers is that consumers simply aren’t aware of these influences.

Chapter 3: Putting Neuromarketing to Work Because brand memories form networks with connections to other memories, it’s possible to activate a brand memory by activating a connected memory. For example, if advertising has consistently and over an extended period of time connected a dog-food brand with the idea “We’re for Dogs” (as the brand Pedigree has), we can expect exposure to Pedigree products on the supermarket shelf to remind shoppers of their emotional relationships with their dogs, and connect the brand to those emotions. Alternatively, simply seeing a dog outside the supermarket may prime shoppers to seek out and buy the Pedigree brand. Making connections like this sounds easy. In reality, it’s not. First, as researchers have discovered, consumers often resist marketing messages. Second, and perhaps more important, competing brands are often all trying to establish similar brand connections in consumers’ minds, often with similar, related brand messages.

How brands impact our brains Numerous research studies have demonstrated that brands can have a significant, even dominating, impact on the consumption experience. An example often cited for this effect is an experiment in which consumers were asked to taste wine presented in a bottle with a prestige brand label or a budget brand label. When tasting from the budget brand bottle, people rated the tasting experience quite poorly. And when tasting from the prestige brand bottle, they rated the wine quite positively. Of course, the researchers gave them the same wine in both cases, so what they tasted was completely determined by their brand expectations. Using a neuromarketing approach, the same experiment was repeated with consumers having their brains scanned in a functional magnetic resonance imaging (fMRI) machine while they enjoyed their wine. The results were quite stunning: Participants actually experienced the taste of the wine differently when it was presented as a prestige brand instead of a budget brand. This powerful impact is sometimes called the placebo effect of branding. Like a placebo pill, the brand doesn’t actually change the physical experience, but it does change how consumers react to the experience. Researchers have suggested that this is an example of how people consume concepts rather than just physical products. You may attribute your satisfaction with a product (or the lack of it) to its physical consumption or usage, but in fact, the concept that the consumption experience represents is impacting your response the most.

39

40

Part I: The Brave New World of Neuromarketing

Why leading brands are so hard to displace Neuromarketing has been applied to the problem of understanding why upstart brands have such a hard time displacing leading brands in a mature category. From a neuromarketing perspective, one reason is because leading brands tend to have a much more diverse and highly connected brand memory network. Because the leading brand “comes to mind” more easily when the category is considered, it can benefit from activation from many angles, even from exposure to lesser brands in the category. Leading brands benefit from a virtuous cycle of usage reinforcement. The leading brand ✓ Is familiar, so consumers tend to trust it ✓ Offers a shortcut to decision making that doesn’t require consumers to spend time and effort to make a choice ✓ Reduces risk ✓ Is likely to create a positive consumption or usage experience because consumers expect it to do so At the same time, the leading brand is more likely to get extensive retail exposure, better product placement, more editorial media coverage, more recommendations by sales staff, and greater promotional activities by retailers and brand owners. All this adds up to more exposure to the consumer, which in turn reinforces the brand’s familiarity and strength of preference. Finally, because the leading brand is often bought without giving it much thought, it’s a prime candidate for habitual buying. Such a bundle of benefits is hard to beat. Yet, every so often we see an “upstart” brand doing just that. What’s the secret to a successful challenge and overthrow of a leading brand?

Although leading brands tend to benefit from implicit decision making that favors repeat purchases, the challenger brands can benefit by shifting consumers from implicit to explicit decisions. The challenger brand aims at changing behavior, and the most promising way to do that is to stand out, attract attention, present a compelling argument as to why the brand should be considered, and preempt any counterarguments that may come to consumers’ minds when they analyze the claims made.

Chapter 3: Putting Neuromarketing to Work

Using neuromarketing to test brands

Some of the neuromarketing methods and approaches we mention in this chapter will be unfamiliar to you (for more information, read Chapters 16 through 18). For now, we suggest you just scan the “Using neuromarketing . . .” sections in this chapter to get a sense of the variety of new approaches offered by neuromarketing. You can catch up on the details later. Testing brands with neuromarketing focuses on three aspects of consumer response:

✓ Associations: Brands are defined by the richness and diversity of their connections in the consumer’s mind. ✓ Emotions: Emotions drive the consumer either toward the brand or away from the brand. ✓ Motivations: Exposure to brands can activate conscious and nonconscious goals in the consumer’s mind that motivate actions. Neuromarketing provides several ways to measure brand associations. Some of these approaches (such as semantic priming and the Implicit Association Test) measure behavioral responses; others (such as fMRI and electroencephalography [EEG]) measure changes in brain states that accompany activating strong associations in memory. Emotions are hard to measure with traditional verbal reporting, but several approaches to measuring emotional responses to brands are used by neuromarketers, including affective priming, electromyography (EMG), and facial expression analysis. Motivational goal activation by brands can be measured by neuromarketers using behavioral studies (measuring the behavioral consequences of brand priming) and brain measures (such as EEG measurement of approach-avoidance motivations).

Designing Better Products and Packages with Neuromarketing Neuromarketing has been applied extensively in product and package design, in part because people find it very hard to articulate why they like or don’t like a design, and in part because people are very poor predictors of their

41

42

Part I: The Brave New World of Neuromarketing future buying behavior. Neuromarketing can help marketers and product designers answer three questions: ✓ How do new products get noticed? ✓ What makes a product or package attractive? ✓ Why do so many new products fail, and what can be done about it?

How new products get noticed When developing new products or packaging, the first thing marketers must do is find the right balance between two basic aspects of the design: novelty and familiarity. Most consumers are attracted to novelty because our brains are naturally curious and on the lookout for new things. But too much novelty overwhelms us and may lead to rejection of a new product if it isn’t familiar enough for us to see how it would meet our needs. So, we’re also drawn to familiarity because it provides feelings of comfort, confidence, and understanding. The key to getting noticed for a new product is finding the “sweet spot” between novelty and familiarity that provides differentiation from existing products in the category but also provides assurance that the new product meets the consumer’s emotional expectations. In brain science terms, this means focusing on certain aspects of attention and emotion: ✓ Differentiation can be measured by the extent to which a product triggers bottom-up attention (involuntary attention that isn’t consciously directed by the viewer) when viewed in a context of competing products. ✓ Emotional response can be measured by the extent to which the product elicits positive emotional reactions, which can be invoked either directly (by shape, color, form, symbolism, or other signals) or indirectly (through priming, processing fluency, or nonconscious emotional markers). For more on these terms, turn to Parts II and III of this book. For a quick introduction to some of the key scientific concepts, check out Chapter 24.

Neurodesign of everyday things Project and package designers, marketers, and graphic and industrial designers can learn a lot from neurodesign (a subfield of neuroscience and social

Chapter 3: Putting Neuromarketing to Work psychology). Neurodesign explores how and why our brains are attracted to some designs more than others, and why we perceive some features as naturally more aesthetically pleasing than others. What scientists have found is that some aesthetic responses seem to be universal and “hard-wired” into our brains. For example, people seem to have a natural preference for curved lines and edges compared to straight lines and pointy edges. We also tend to prefer designs that are simple, symmetrical, and have high contrast. Another important source of attractiveness is processing fluency (the ease with which an object can be identified and understood by our brains). When processing fluency is high, consumers don’t need to engage in deliberative thinking; they can process the object (such as a package or product) and make sense of it without a lot of conscious thought. Processing fluency has been found to improve not only by the design itself, but also by the way in which the design is presented. Repeated exposure (familiarity again), pattern predictability, typicality (the extent to which a design represents an average or ideal for a category), and priming all contribute to processing fluency.

Neuromarketing and new product innovation Why do so many new products fail? Neuromarketing tells us there are two underlying problems: ✓ People are terrible at predicting what they’ll do in the future. ✓ People are attracted to the novelty of new products, but they’re a little bit uncomfortable with that novelty. Behavioral economics, one of the disciplines underlying neuromarketing, has addressed the first problem. The conclusion of the behavioral economists has to do with the idea of accessibility (see Chapter 2). When we imagine what we might do in the future, we pick things that are easily accessible in our minds. Unfortunately, this is often a poor basis for a prediction, and we often end up being hopelessly wrong. And those bad predictions get passed on to market researchers in focus groups, surveys, and interviews. The second problem takes us back to the idea of novelty, and in particular the question of how our brains typically respond to novelty: We’re attracted to it, but we tend to distrust it. The reason for this is often explained in evolutionary terms.

43

44

Part I: The Brave New World of Neuromarketing Imagine our ancestors, wandering around in a hostile environment full of dangers. Anything that aided survival in that environment would get passed down from one generation to the next. One thing that clearly aided survival was noticing new things in the environment. But new things often tended to be threatening, like a predator lurking in the tall grass. So, we learned to be vigilant about any changes in our environment, and to direct our attention toward novelty, but also to be on alert and a little bit edgy when we encountered it. Those propensities appear to have been passed down to our modern brains, even though we operate in a vastly different environment. They show up as a natural inclination to react negatively to new things, despite being attracted to them in the first place. When you combine poor predictability and a tendency to dislike new things, you get a high likelihood that people aren’t going to be able to tell you what they’ll like in the future.

What are product innovators to do? Neuromarketing says the best approach is to combine moderate levels of innovation with recognizable elements of familiarity. Take the Apple iPad, for example. It’s a novel product in many ways, but it also has familiar features. It’s similar to a computer, so anyone familiar with a computer will find it familiar. It also incorporates elements of other familiar processes, such as the ability to turn pages on the screen with the same gesture we use to turn pages in a magazine. Marketing and advertising can play an important role in helping consumers make sense of a new product, highlighting how it can be used and how it can satisfy the consumer’s needs and goals, including nonconscious goals the consumer may not even be aware he or she has. The challenge is not only to position the product as a true novelty but also to create a familiar context and establish connections with pre-existing needs and goals.

Using neuromarketing to test new product ideas New product and package designs need to attract visual attention. Most neuromarketers use eye tracking to test for visual attention, because it provides a precise record of where and when visual attention is directed. Eye tracking also allows the measurement of pupil dilation, which can be a good indicator of emotional arousal while viewing an object.

Chapter 3: Putting Neuromarketing to Work

Eye tracking needs to be integrated with specific tasks in order to be useful. If people are just staring passively at an image, eye-tracking patterns will be unrelated to what people would do in a real shopping situation. Giving study participants a task — like finding the new product on a crowded shelf full of competing products — provides a common baseline against which the eyetracking results can be evaluated. Another methodology that is becoming popular in product and package research is forced choice testing. Alternative designs with variations in one or two design elements (such as color of a label or size of a bottle) are presented on a computer screen, and viewers need to rapidly select the one they like the best. The rapid choice requirement forces people not to think too much and, thus, decreases the role of conscious deliberation. Finally, these behavioral methods can be combined with brain or body measures to assess the underlying mental mechanisms involved. Combining eye tracking with EEG or fMRI, for instance, can provide additional insights into whether fixations are associated with engagement or confusion.

Creating Effective Ads with Neuromarketing Neuromarketing offers a very different perspective on advertising research than is found in traditional research methodologies. This new perspective embraces new answers to what might be called the three fundamental questions of advertising research: ✓ What is the purpose of advertising? ✓ How does advertising achieve its purpose? ✓ How can we best measure advertising effectiveness? According to the traditional view, the purpose of advertising is to persuade a consumer to buy a product. It does this by providing a logical argument that will be remembered later when the consumer is in a store or other buying situation. The process occurs completely at the conscious level of the consumer’s brain, and is fully accessible for later recall, so the consumer can accurately convey to a researcher exactly how and why the ad’s persuasive message contributed to the consumer’s decision to buy. The neuromarketing perspective takes a different view. According to most neuromarketers, the purpose of advertising is to create an emotional connection to a brand, which then gets translated into a sale when those brand

45

46

Part I: The Brave New World of Neuromarketing connections get activated at the point of sale. Much of this process occurs at a nonconscious level in the consumer’s brain, and as a result the consumer can’t accurately report exactly how his or her purchase decision was influenced by the ad. In the traditional view, advertising achieves its purpose through conscious processes of persuasion and recall, which are a function of attention, logic, and explicit learning. In the neuromarketing view, advertising achieves its purpose mostly through nonconscious processes: creating positive associations with a brand, repetitive conditioning, and implicit learning. Each view presents a very different path to advertising effectiveness and, therefore, makes different recommendations for how to measure it. In this book, we call these two paths the direct route and the indirect route to advertising effectiveness: ✓ The direct route measures effectiveness in terms of conscious attention, logical persuasion, recall, and sales. ✓ The indirect route measures effectiveness in terms of nonconscious emotional connections, priming, implicit memory, brand attitudes, and sales.

Neuromarketers don’t claim that the indirect route is correct for all ads and all situations. The direct route is still best for new products that don’t have strong brand identities and need to be explained to begin capturing market share. The direct route is also good for direct solicitation or call-to-action advertising, when the purpose of the ad is to persuade the viewer to take some action, like make a donation or “call immediately” to buy the advertised product.

The direct route: Impacting the sale directly The direct route to advertising reflects the assumptions of the rational consumer model (see Chapter 2). According to this view, consumers are rational, logical, and fully conscious decision makers. So, the best way to reach them is to grab their attention, capture their interest, trigger their desire, and prompt an action, the purchase of the advertised product. There are a number of difficulties with this model that we discuss at length in Chapter 11: ✓ People don’t normally pay much attention to advertising. ✓ When people think about advertising claims, they tend to resist them.

Chapter 3: Putting Neuromarketing to Work ✓ People show little evidence of thinking about an ad when shopping. ✓ People are usually unable to recall specific aspects of an ad. ✓ Advertising in general has very little impact on sales. These challenges to the direct route model do not invalidate it. But they do indicate that it’s less applicable than researchers used to think it was.

The indirect route: Changing and reinforcing attitudes toward the brand The indirect route to advertising effectiveness is more in line with the intuitive consumer model (see Chapter 2). Advertising is believed to impact sales indirectly by changing attitudes, shaping the consumer’s brand memory, and activating nonconscious goals, which then get fulfilled at the point of purchase. Essentially, advertising builds brand equity, and brand equity drives purchase behavior. Conditioning, an implicit learning process that creates a positive emotional connection with the brand, is central to this process. Because conditioning works through repetition and low-attention processing, it’s important to expose the viewer to the ad multiple times while minimizing the amount of conscious attention directed toward the ad. After conditioning has occurred, the positive emotional connections can be activated at the point of sale, influencing the consumer’s purchasing behavior. Research has shown that the indirect route works best for familiar brands, when the product is inexpensive and purchased frequently, and when the ad presents an emotionally engaging narrative in which the brand plays a central role.

Using neuromarketing to test advertising The best use of neuromarketing in advertising is to test the effectiveness of indirect-route advertising, which largely operates below the level of conscious awareness and, thus, cannot be tested using the self-reporting measures of traditional advertising research. Neuromarketing techniques commonly used in advertising research include ✓ Eye tracking and EEG brain-wave measurement to track attention ✓ EMG to track momentary emotional reactions by measuring micro-movements of facial muscles

47

48

Part I: The Brave New World of Neuromarketing ✓ Facial-recognition software to track and measure the intensity of observable facial expressions while watching an ad ✓ EEG to measure approach and avoidance emotional reactions by identifying brain-wave patterns associated with each response

Understanding the Mind of the Shopper with Neuromarketing Shopping is a complex experience that begins with goals and expectations in the mind of the shopper and ends with a decision to buy or not to buy. In between, it’s a physical experience that involves navigating through physical space, activating all our senses, and weighing lots of alternatives. Shopping can be, and often is, a pleasurable experience. It harkens back to our early days of hunting and gathering. In many ways, our evolutionary background has optimized our minds for shopping. We’re experts at finding our way through landscapes to acquire things we want and need. We’re driven to meet our bodies’ basic needs, like food and warmth. Not only are we good at shopping, but we draw intense satisfaction from achieving our goals. Shopper research is a natural fit for neuromarketing methods, because shopping involves many of the mental processes that are central to the neuromarketing perspective: ✓ Our ability to notice novelty and familiarity ✓ Our motivation to approach things that are rewarding and avoid things that are not ✓ Our tenacity to pursue goals in the face of obstacles and interruptions ✓ Our ability to choose rapidly among alternatives

Understanding the mind of the shopper Shopping is a multisensory experience that engages the mind of the shopper more effectively when all five senses are activated in a consistent manner. Retailers are beginning to appreciate the power of sensory cues and are using neuromarketing studies to tune their environments across all five senses: sight, touch, taste, smell, and sound. Researchers are finding that adjustments in the sensory “landscape” of a retail environment can have a significant impact on both shopper satisfaction and purchase behavior, even when the shopper is unaware of the changes that have been made.

Chapter 3: Putting Neuromarketing to Work Neuromarketing also highlights the importance of goal pursuit in the mind of the shopper, with studies showing how different goals can lead to vastly different shopping experiences. For example, shoppers often make a distinction between doing the shopping, when they see shopping as a chore, and going shopping, when they see shopping as a pleasurable recreational experience. The goals being pursued in these contexts are quite different, and retailers need to provide quite different experiences to satisfy the shopper’s expectations and needs in each case. A final element in understanding the mind of the shopper is the impact of consumer personality, temperament, and behavioral style on shopping behavior. Psychologists have known for some time that people have different predispositions in how they behave — some of us are more impulsive, more cautious, more outgoing, and so on. Recently some of these categorizations have been applied to consumers, and interesting variations in shopping styles have been identified. Knowledge of consumer styles is another tool retailers can use to fine-tune their environments to meet the needs of their customers.

Making stores more brain-friendly Retailers can influence three aspects of shopping to make their stores more brain-friendly. All three can benefit from neuromarketing insights and can be assessed with neuromarketing methods: ✓ Finding: Stores need to help shoppers find what they’re looking for, as well as discover new things that they may not be looking for. ✓ Choosing: Stores need to make it easy for shoppers to choose among alternatives. Many sales may be lost if the choice task is too daunting for the consumer. ✓ Paying: Stores need to help shoppers overcome the pain of paying. Some shoppers feel this pain more than others, but all shoppers feel it.

Finding To support finding, the retailer’s resources include the store layout, displays, imagery, promotions, activations (such as an in-store taste testing), and, most important, how merchandise is displayed on the shelf. These elements act as primes, impacting the consumer’s attention, emotional associations, and shopping decisions. The retailer’s strategy may be to focus on creating a particular image by distributing themes, symbols, and triggers throughout the store to guide the shopper and activate desired goals and impressions, such as a grocery store creating a rustic produce department with timber, barrels, and stacked wooden boxes to prime produce buying by suggesting the market’s produce is “fresh from the farm.”

49

50

Part I: The Brave New World of Neuromarketing The theming of retail environments attempts to prime broader emotional goals, such as feeling important, pampered, superior, clever, cared for, smart, responsible, and so forth. But the same principles apply when it comes to specific product categories or individual products. The retailer can use a wide range of primes in displays, the way pricing information is expressed, the context around the product being marketed, scent, sound, touch, and, depending on the product under consideration, even taste.

Choosing To support choosing, stores need to balance the needs of convenience-oriented shoppers and recreation-oriented shoppers. The convenience shopper wants to get in and out of the store as quickly as possible with as little choice as possible. Her purchasing behavior can be easily disrupted if anything gets in the way of her habitual shopping patterns. In contrast, consumers engaging in recreational shopping generally like variety. But variety needs to be carefully managed to avoid choice overload (presenting too many choices so the shopper is overwhelmed and ends up choosing nothing). For example, putting products in categories makes choice easier, even if the categories are meaningless. Shoppers may be overwhelmed by 30 varieties of tops all laid out in a single display, but have no trouble choosing if those same tops are grouped into six bins labeled A through F. Several other techniques for simplifying choice in shopping situations are discussed in Chapter 12.

Paying To minimize pain of paying, retailers have several options at their disposal. In general, any tactic that creates psychological distance between buying and paying helps minimize the pain of paying. This is a fundamental principle behind the credit card — the bill doesn’t arrive until the end of the month. Layaway plans, “no payments for three months” plans, or other credit arrangements achieve similar effects. Pain of payment can also be lessened by offering ways to undo a sale, such as a money-back guarantee. Finally, pain can be minimized by tying the payment to a reward for paying, such as frequent-flyer miles or discounts on future purchases.

Using neuromarketing to test shopping environments Because the outcome of shopping is behavior — to buy or not to buy — researchers are particularly interested in measuring observable outcomes of the shopping experience, such as what consumers buy, where they buy it, when, and for how much.

Chapter 3: Putting Neuromarketing to Work In the retail environment, whatever is going to influence buying outcomes has to be seen or otherwise experienced by the shopper. This is why two types of testing are most prominent in in-store shopper research: ✓ Behavioral testing: For example, presenting consumers with choice scenarios while varying situational factors like price and shelf position ✓ Eye tracking: Measuring where consumers are looking in the aisle, at the shelf, and when examining individual products For some methodologies, measuring free-roaming shoppers presents datacollection challenges. For example, EEG brain-wave recordings are very sensitive to muscle movement, so measuring people walking around, turning their heads, bending over to pick up products, and so on, adds significant noise to the recording, which takes time and effort to remove in post-processing. As an alternative to in-store measurement, some neuromarketers offer in-lab testing that simulates aspects of the shopping experience in a more controlled environment. Eye tracking can be conducted with images of store shelves, and behavioral tests can be performed with images rather than actual product displays. Study participants also can watch video depictions of shopping experiences in the lab. Because participants remain stationary, technologies like EEG can be used to probe into deeper mental responses, such as variations in attention, emotion, and memory. Constructing virtual reality shopping environments is another new development that holds promise for making shopping studies in the lab both more realistic and more controlled.

Appealing to Brains Online with Neuromarketing The Internet is something new (at least for our brains, which evolved in a world of physical reality). Neuromarketing is something new. You’d think that these two new things would’ve gotten together, but so far, neuromarketing hasn’t been applied to online topics nearly as much as it has been applied to more traditional topics, like TV advertising and in-store shopping. We suspect that this is beginning to change, as neuromarketing methods become more tuned to the unique features of the online world.

Going online: Something new for the old brain The human brain has absorbed many new communication technologies over the millennia: language itself, writing and reading, photography, film, and TV,

51

52

Part I: The Brave New World of Neuromarketing to name a few. But the Internet includes and goes beyond these revolutionary modes of communication in three important ways that have profound effects on marketing: ✓ The Internet has greater interactivity and enables greater control. Traditional media experiences tend to be passive, while online experiences typically are more active and goal directed. When you watch TV, listen to the radio, or leaf through a magazine, you’re usually doing so to relax and unwind by immersing yourself in an imagined world in which you’re not the active player. However, when you go online, it’s usually to get something done: to find some piece of information, to interact with somebody, or to buy something. In most online activities, specific goals are activated, and the extent to which these goals are easily achieved can have a big impact on whether the activity is perceived as a success or a failure. For example, when shopping online, people judge the experience as much by the ease of navigation and searching as by the eventual outcome of making a purchase or not. Interactivity and control are two aspects of online experiences that can have a big impact on overall satisfaction and likely future behavior (such as returning to a website or not). Researchers have found that interactivity doesn’t operate in a simple “more is better” manner. Too little interactivity does, indeed, cause a website to appear boring and static, but too much interactivity can also have a negative effect if it’s too taxing on the viewer’s cognitive resources. A similar result has been found for control features. Both too little and too much control can be off-putting. ✓ The Internet allows unprecedented alignment of advertising with tasks and goals. The ability to align advertising with a person’s wants and needs at a precise moment is something that has eluded advertisers in more passive media. But in the online world, with so much information passing back and forth between the user and the website, and complex content selection algorithms churning away in the background, placing aligned ads on the website in real time becomes very feasible. In Chapter 13 we discuss how this new capability changes ideas about advertising effectiveness for online ads. The value of aligned online advertising is supported by the fact that the most aligned type of online advertising — those little search ads that show up on a search results page based on what you type into the search box — are the most popular form of online advertising, consistently accounting for almost half of all expenditures advertisers make online.

Chapter 3: Putting Neuromarketing to Work ✓ The Internet eliminates the delay between marketing and buying. The Internet enables companies to turn an ad into an immediate sale, with no time delay in between. One key implication for marketing and neuromarketing is that creating a lasting memory is no longer such an important purpose for an ad. Also, as online marketing experiences become full-blown sales experiences, testing of online marketing needs to encompass choice and action outcomes, as well as attention and emotional responses. There are some risks for consumers in this development. Nonconscious goal activation may become an even more prominent source of buying motivation, and impulsive buying may become harder to resist when the old “cooling-off period” between offer and sale has vanished.

Building the perfect website Neuromarketing can make a contribution to website design in three powerful ways: ✓ By helping designers understand how people’s brains actually consume web pages: Eye tracking applied to website viewing has shown that gaze patterns are determined by two types of attention:

• Bottom-up attention: This type of attention is involuntary and automatic. When viewing websites, bottom-up attention is attracted to certain types of features, such as brightness relative to background, distinct borders, the center of the viewing area, and tight groupings of objects on the page. These reactions are automatically produced by the brain’s visual processing system and can be predicted at an 80 percent accuracy rate by software.



• Top-down attention: This type of attention is driven by the viewer’s goals and expectations. Following the first few moments of scanning, which are controlled by the automatic attention system, goals take over to determine where the viewer will look next and for how long. This dependence on goals means that web pages should not be thought of as having some objective level of “effectiveness.” Web page and website effectiveness can only be determined relative to the goals and expectations that viewers bring to the page.

✓ By providing clues regarding the major sources of website frustration: Studies have shown that website frustration usually occurs when the viewer’s goals and expectations are impeded by the web page’s organization, task flow design, or goal-irrelevant clutter (usually advertising) around the page. These disruptions of goal pursuit can occur at the

53

54

Part I: The Brave New World of Neuromarketing nonconscious level, and they can significantly impact the viewer’s attitudes and behavior, often without the viewer being aware of the real sources of his or her responses. ✓ By helping designers understand how nonconscious processing impacts online experiences: Although tasks and goals on websites are predominantly conscious in origin and pursuit, nonconscious processes continue to play an important role in website viewing. Website designers and online advertisers need to understand how low-attention processing, priming, and implicit memory all operate alongside conscious processes in order to design online experiences that maximize online effectiveness and web experience satisfaction.

Satisfying (almost) every need online The Internet raises some interesting issues with regard to how it enables us to satisfy some of our most basic human needs in ways that were impossible before it came along. Three such changes are discussed in Chapter 13: ✓ How we search for information: Just about everything we do online involves acquiring, evaluating, or comparing information with an ease that was unthinkable a few years ago. ✓ How we share: People can now share and align their likes and goals with their friends more easily than ever before. ✓ How we buy: On the web, the store is the ad, and the ad is the store. The lure of immediate gratification has never been presented so strongly. Each of these new capabilities has already had significant repercussions. The replacement of passive consumption of information by active search has led to the decline of many traditional information “destinations,” such as newspapers, magazines, and the evening news. The ease with which people can share preferences and tastes on social-networking sites has changed the drivers of persuasion and choice that marketers have relied on for decades. And the limitless choice of online shopping has raised issues of choice overload that place significant new burdens on our human decision-making capabilities. The long-term implications of these radical changes are as yet unknown.

Using neuromarketing to test online experiences Eye tracking, EMG, and facial recognition have all been used to test website usability. As website designers seek out more integrated solutions for testing

Chapter 3: Putting Neuromarketing to Work both the conscious and nonconscious drivers of online experience, we expect to see increasing use of neuromarketing techniques in conjunction with traditional methodologies such as video recording and direct observation. Neuromarketing has not been employed extensively in the study of online marketing and advertising. One challenge is that direct brain response methodologies like EEG and fMRI have not yet developed robust procedures for separating ad effects from the effects of other elements on a web page. Another challenge is the inclusion of consumer tasks and goals, which are not as well integrated into neuromarketing approaches as they need to be.

Producing Compelling Entertainment with Neuromarketing Entertainment is not directly a part of marketing. It’s a self-contained experience, which is to say it provides its own reward. Marketing, in contrast, may be entertaining, but its real purpose is outside itself. Its job is to influence attitudes and behavior beyond the marketing experience itself. So, why are we discussing entertainment in a book about marketing and neuromarketing? Because, through brain science, we have learned that entertainment is a major delivery medium for attitude and behavior change, the heart and soul of marketing. A story is not an obvious persuasive message, but it can persuade people in ways that traditional persuasive messaging cannot. Marketers are catching on to this, and consumers should as well.

Why our brains like stories Research has shown that a story can activate empathy. Through a system in the brain called mirror neurons, we can feel what characters in the story feel. As the story draws us in, our emotions are connected to the story, suppressing our awareness of our actual surroundings. This causes us to leave reality and enjoy time in the world the story is creating. When we’re transported into this imaginary world, we’re in a highly persuasive state, because our usual defenses against persuasive messages have been, in effect, left back in reality. Our emotional involvement with the reality makes it easier for us to align our own beliefs and evaluations with the story. Stories can enrich our lives by letting us experience situations we haven’t yet experienced or may never experience. Although the experience is “secondhand,” it’s an experience nevertheless, enriching our lives, creating new memories in our minds, and diversifying existing memories. Importantly, we imagine the risks that the story’s characters need to take, without having to take those risks ourselves.

55

56

Part I: The Brave New World of Neuromarketing An effective story not only allows us to feel the emotions of the characters, but also activates other parts of our brains. We may experience smells when we read about coffee, touch when we read about the leathery hands of a villain, or motion when the hero leaps from a speeding train. This is an important insight from neuromarketing research: A story can activate the same areas in the brain that are activated by equivalent real-world experiences. Brain science tells us our brains make sense of reading about an experience or watching it unfold in a movie by simulating how we would experience it ourselves. This is why neuromarketers sometimes say that the brain responses of people watching an experience are a good indication of the likely brain responses of people actually engaging in that experience.

Neuroscience goes to the movies A subfield of neuroscience, neurocinematics, studies the impact of movies on the mind. Researchers have found that a well-constructed movie with a strong plot and tightly managed emotional scenes (such as a thriller) synchronizes eye movements and brain activity across an audience of viewers. The more effective the thrills, the more all viewers respond in the same way at the same time. Interestingly, comedies produce less synchronization than thrillers, perhaps validating the comedian’s lament that “comedy is hard, dying is easy.” Movies can also prime the audience, activate goals, and impact behavior. Research has focused primarily on the dark side of priming, showing how viewing violent movies can be linked to an in increase in aggressive and violent behavior in children and adults. It’s also likely that movies can act as positive primes, leading to altruistic, ethical, and pro-social behavior, but this side of priming has received less attention by researchers. Movie trailers are mini-movies with a marketing purpose: to get viewers to go see the movie. Traditional researchers test trailers by asking viewers after seeing the trailer if they plan to see the movie. Neuromarketing research can do more. It can deliver insights into nonconscious responses to the trailer, such as impressions of novelty and familiarity, emotional reactions to different scenes, fluctuations in attention and interest, memory formation or activation, approach or avoidance motivation, and audience synchronization.

Product placement in movies, TV shows, and beyond Product placement has become a prominent form of advertising because it has been shown to produce the kinds of responses marketers love: improved

Chapter 3: Putting Neuromarketing to Work brand favorability, purchase intent, and actual purchase behavior. So, it’s no wonder that we’ve seen a rapid increase in product placements in movies, TV shows, video games, music videos, magazine articles, and elsewhere. For marketers, the unique benefit of product placement is the fact that the product is presented within a narrative story. The more deeply the viewer is engaged by that story, the less access the viewer will have to deliberative and logical thinking about what he or she is watching. This means the viewer will be more receptive to the ideas presented in the story and less questioning of any claims made or implied as a part of the story. When a product is introduced into the mix, marketers hope it will ride on top of the receptive feelings produced by the story, allowing it to share in the enhanced receptivity to persuasion that the story produces.

The future of entertainment: Immersive games and simulations Progress in computing power has enabled game designers to create highly realistic and immersive games. Unlike movies, games give the player direct control over the storyline, combining immersion with both control and interactivity. The degree to which the player feels immersed into the game is called presence. Research has shown that adding an engaging story or narrative to a game dramatically lifts presence. In addition, a strong storyline has been found to trigger and enhance emotions, lead to an identification with characters, and lift the player’s overall satisfaction with the game experience. Immersive gaming has been found to have mixed after-effects. Perceptual skills and hand-eye coordination appear to be enhanced by extensive gaming, but increased aggression and decreased empathy have been observed after deep immersion in violent games.

Using neuromarketing to test entertainment Entertainment testing — because the focus is on the impact of the experience itself — is more concerned with moment-to-moment measures and, in particular, on how those measures play out over the duration of the experience. Emotional arousal (intensity of stimulation) is an important indicator of entertainment effectiveness. It can be measured by electrodermal activity (EDA), the production of perspiration on the skin. Emotional valence (liking or disliking) is important as well. Especially over extended periods of time, facial EMG can be used to track valence-related micro-muscle movements

57

58

Part I: The Brave New World of Neuromarketing from the smile or frown muscles. EMG can also be used to measure tension and stress by placing sensors on neck, shoulder, or jaw muscles. Technologies that probe more deeply into brain signals, like fMRI and EEG, have been used less widely in entertainment studies. In part, this is because they create a more unnatural and uncomfortable setting for long-duration recording. They’re also more sensitive to body movement, which is a common byproduct of an immersive entertainment experience.

Chapter 4

Why Neuromarketing Matters In This Chapter ▶ Understanding the contribution neuromarketing can make to marketing ▶ Considering the risks inherent in neuromarketing and how to mitigate them ▶ Exploring the potential benefits of neuromarketing ▶ Seeing neuromarketing in a broader context

N

euromarketing hasn’t appeared on the marketing scene without attracting its share of controversy. If you scan popular press accounts of the field, there are quite a few critics out there. Throughout this book, we address many of these criticisms. In this chapter, we provide a high-level overview of some of the major themes of contention and present our own views on the extent to which these possible dangers need to be taken seriously. What you won’t find in the popular press are many discussions of the potential benefits that neuromarketing can bring to marketing and market research. Perhaps this topic is inherently less catchy, but we think it’s equally important. We summarize three types of benefits in this chapter. Just so our own perspective is clear, we believe that, overall, neuromarketing is a positive addition to the methodological toolkit available to market researchers. It brings a more realistic view of the human mind into consumer research and addresses many of the shortcomings of traditional research, as we outline in Chapter 2. We believe that neuromarketing can help improve the efficiency and effectiveness of marketing, reduce the number of product and campaign failures, and ultimately make marketing more responsive to the real needs and wants of consumers. We acknowledge that neuromarketing can be abused by marketers if they want to encourage the purchase of products and services that are unhealthy or unsafe, or to exploit vulnerable consumer groups such as children and lowincome groups. Such practices aren’t created or encouraged by neuromarketing, but they can be aided by neuromarketing, just as they can be aided by any other form of market research.

60

Part I: The Brave New World of Neuromarketing

Potential Dangers of Neuromarketing As far back as 1957, when Vance Packard published his best seller, The Hidden Persuaders, critics expressed concerns that marketers were using psychological and subliminal tactics that were a threat to the public. Their warnings were based on the assumption that marketers were unscrupulous manipulators who would use any means at their disposal to get consumers to buy the brands and products under their care. This view of marketers is more than a bit unfair. Yes, marketers want to encourage consumers to buy their products, but the marketplace itself is an unforgiving competitive arena in which brands and products that don’t deliver real value are quickly displaced by competitors that do. Success and failure are highly visible and marketers can rapidly learn from each other which strategies and executions are working and which aren’t. This creates a generally level playing field in which manipulating the consumer or making false claims is much more likely to backfire than lead to success, no matter what persuasive tactics are employed. Sometimes the newness of neuromarketing has been overplayed by critics. Practices that are attributed to the influence of neuromarketing often have long histories of discovery and dissemination that started well before neuromarketing arrived on the scene. In many cases, neuromarketing can now confirm why some of these practices work (or don’t work), but the practices themselves can’t be attributed to neuromarketing. For example: ✓ Marketers used food stylists long before neuromarketing confirmed that attractive images of food can attract attention, activate goals, and increase the chances of a purchase. ✓ Marketers segmented the market of chocolate eaters into cravers and non-cravers long before neuromarketing confirmed that these segments do show quite different brain activation patterns. ✓ Marketers have long known that many decisions are made by the nonconscious mind and that exposure to messages can have an impact even if consumers can’t recall the exposure. ✓ Marketers have used celebrities to endorse brands prior to neuromarketing, confirming that such an endorsement can positively impact the consumer’s decision to buy. Sometimes discomfort with marketing in general is transferred to neuromarketing. Many critics just don’t like the idea of marketing. They don’t like being bombarded with ads everywhere they turn. They don’t like it when all their clothes shout out their brand affiliations. They don’t like the fact that

Chapter 4: Why Neuromarketing Matters their beloved baseball park is now called Spaghetti Express Stadium. These are legitimate concerns. But these excesses of marketing can’t be attributed to neuromarketing. Nor would they be less of a problem if neuromarketing didn’t exist. In fact, we believe that neuromarketing has the potential to finally show marketers just how damaging these overreaches can be to their brands and their corporate reputations. In Chapter 7, we discuss how consumers have developed both conscious and nonconscious defenses against persuasive messaging. By helping marketers understand where they’re throwing away money and alienating consumers in their efforts to rise above the clutter of competing products and claims, we believe neuromarketing can benefit both marketers and consumers, helping the former spend their marketing dollars more wisely, and helping the latter live in a world with a little less marketing noise and irrelevant marketing clutter. Let’s take a closer look at the three main complaints that are leveled against neuromarketing.

Reading our minds, invading our privacy A big concern of some commentators is that neuromarketing is a kind of mind-reading technology that can probe into our private thoughts and expose them to marketers. This concern vastly overestimates the power of neuromarketing and misrepresents the sciences that underlie it. We cover this topic in detail throughout this book, but for now we want to emphasize that measuring brain waves and body signals with various kinds of sensors is not the same as reading thoughts. What neuromarketing technologies can say with some precision is that, at a moment in time, a person is exhibiting certain physical states that tend to be associated with certain mental states (like being attentive, or experiencing approach motivation, or feeling confused), but these mental states are not in themselves thoughts. For example, your brain waves have a distinctive shape when you’re paying attention to something, but those brain waves don’t identify with certainty what you’re paying attention to. You may be paying attention to what a salesperson is saying to you, or you may be paying attention to the clock because you want the salesperson to shut up so you can get to your next meeting, or you may be rehearsing what you’re going to say in that next meeting. Your brain waves can’t tell the difference; they only reveal that you’re paying attention to something.

61

62

Part I: The Brave New World of Neuromarketing

As we explain in later chapters, our brains have complex internal lives above and beyond their “day job” of orienting us and keeping us safe in the world. There is no scientifically reputable scenario in which that internal life is going to be opened up to external scrutiny in the foreseeable future. This is not a problem that consumers or public advocacy groups need to worry about. Privacy, on the other hand, is an important concern. Standards around privacy are fundamentally important to the integrity and long-term viability of neuromarketing for one critical group: participants in neuromarketing research studies. In the United States, any scientist who engages in federally funded research with human subjects must comply with privacy protection requirements as defined by the human subjects guidelines of the Department of Health and Human Services. These guidelines require the oversight of every study by an institutional (or independent) review board (IRB) composed of healthcare professionals, subject matter experts, and community leaders. The IRB provides written approval of all study designs, consent forms, procedures for protecting vulnerable populations (such as children, medical patients, and pregnant women), and participant privacy. Federally mandated privacy policies require that participants’ confidential data be stored securely and that their results from a study be identified by an anonymous ID that can only be matched back to their confidential identity data using a third, equally secure, matching database. Some IRB policies also state that data can’t be reported on an individual-by-individual basis, even if it’s masked; instead, it can only be reported as group averages. If a neuromarketing firm employs a staff member who also holds a university teaching position, that firm probably operates under an IRB agreement, because faculty members are usually required to have IRB approval for all human subjects research they perform, even if it’s conducted for a private company. However, a private neuromarketing firm may not be subject to these privacy regulations, if it’s unconnected to federally funded staff or research. Therefore, it’s always best to ask a potential neuromarketing partner about its participant privacy protection policies. You’ll find that reputable companies either operate under IRB approval, or subscribe to the privacy policy guidelines of a research industry organization like ESOMAR (www.esomar.org) or the Neuromarketing Science & Business Association (www.nmsba.com).

Pushing our “buy buttons” This concern follows closely from the first one. If neuromarketers can read our minds, they can discover ways to manipulate us into buying things that we wouldn’t buy otherwise. In other words, if they can find the “buy buttons” hidden in our brains, they can push them.

Chapter 4: Why Neuromarketing Matters The popular press loves the “buy button” metaphor and regularly suggests that neuroscientists are on the verge of identifying this magical source of consumer control that will allow marketers to turn consumers into mindless buying machines (we prefer the term zombie consumers) at the marketer’s command. There is only one flaw in this deliciously terrifying scenario: Brains don’t work that way. There is no “buy button” in the brain. Purchase decisions are complex behaviors that play out over time, engage both conscious and nonconscious processes, force trade-offs between anticipation of reward and the pain of paying for it and, most important, are subject to a multitude of influences that exist outside the buyer’s mind. Ferrari may try to press the “buy button” in your brain as often as it likes, but until you have $250,000 in your bank account, you’re not going to buy that new Testarossa. We do believe that neuromarketing, properly deployed, can result in products and brands that are more appealing to consumers, increase the effectiveness of marketing, and result in higher sales, revenues, and profits. Currently this is a hypothesis rather than a proven fact, but it’s being tested around the world. We believe that a science-based understanding of neuromarketing principles can create opportunities for marketers to shape consumers’ decisions and actions more effectively. This will happen not because marketers have more control, but because they’ll be providing products that are more appealing. As the novelist William Gibson has famously observed, “The future is already here — it’s just not very evenly distributed.” And so it is with neuromarketing. If this new field confers a competitive advantage to its early adopters, it will grow into a mainstream practice, and those advantages will even out across the marketplace. If it makes marketing more efficient and less wasteful, those savings will spread back into the economy in the form of lower prices, better products, or increased shareholder value. If it doesn’t confer competitive value, it’ll be displaced by other methodologies that perform better. Either way, these significant changes will occur without any “buy buttons” being pressed.

Making us want things that aren’t good for us People doing things that aren’t good for them is a serious personal and public policy problem, sometimes with tragic consequences. But it’s a problem that was with us long before the birth of neuromarketing, and it’s a problem that will remain with us as long as we fight the perennial battle in our own minds between resisting and surrendering to temptation.

63

64

Part I: The Brave New World of Neuromarketing

Critics who fear that neuromarketing will make temptation even harder to resist have a point. To the extent that products and marketing are fine-tuned to resonate with the more primitive, nonconscious parts of our brains, they will become harder to resist. Especially if people aren’t aware that they’re being influenced, their ability to resist will be severely compromised. This concern is legitimate. However, critics are wrong when they view neuromarketing as a weapon that can be used only by marketers to erode consumers’ ability to control temptations. In fact, the brain science on which neuromarketing is built is not a weapon for one side or the other. As this science continues to improve our understanding of why people engage in self-destructive behavior, the knowledge it uncovers can be used to develop practical solutions to counter such behavior, not just exploit that behavior. The only question is who will choose to use it. As we discuss in Chapter 12, personality traits and orientations may have a much larger impact on self-destructive behaviors of all kinds (overeating, addiction, compulsive behavior, excessive risk taking, and so on) than any sort of marketing message, no matter how finely tuned and targeted that message might be. Neuromarketing does not literally make us buy things, or do things, whether those things are good for us or not. Marketing is certainly in the business of trying to make us buy things, and neuromarketing is certainly in the business of helping marketing, but ultimately human beings can’t be made to do anything they don’t at some level want to do. Ask any marketer — if it were that easy, everybody would be doing it.

Potential Benefits of Neuromarketing We’ve looked at the glass half-empty; now let’s look at it half-full. Although it makes less sensational journalistic copy, some commentators and practitioners have begun to consider ways in which neuromarketing can provide public benefits — to consumers, to marketers, and to society at large. In this section, we explore three main benefits that have been proposed.

Using neuromarketing to inform and educate Neuromarketing can be used by the public sector to develop more effective behavioral change programs and provide consumers with unprecedented

Chapter 4: Why Neuromarketing Matters insights into their own decision-making processes. It can be used by consumers to help them understand how they make decisions and how they’re influenced in making decisions, so they can have more control over purchase decisions that they make quickly without much conscious thought. Behavioral economics, one of the academic disciplines that underlie neuromarketing, sheds light on how human beings make economic or commercial decisions. Behavioral economics gives us new and powerful tools for understanding and preventing economic crises, or dealing with their consequences if they can’t be prevented. Behavioral economics has also found a receptive audience among executives in the private and public sectors, who aim at improving the effectiveness of the decisions they need to make. The end result of adopting this more realistic model of decision making should be a positive one, because decision biases that we were previously unaware of are identified and corrected in personal and corporate financial decision making. We believe a similar situation is occurring with respect to neuromarketing. Neuromarketing is based on brain science findings that allow us to understand how consumers really make decisions and how those decisions are influenced by internal mental processes and environmental cues around us. Marketers can use these insights to lift the effectiveness of their strategies and tactics, and consumers can use the very same insights to make better decisions. We see a future where neuroscience principles are taught in schools, helping students to develop their willpower, improve their ability to change bad habits, increase their awareness of how biases and nonconscious impressions shape their decisions, and much more. Marketing is, after all, a kind of teaching. In fact, in some ways, it’s a more powerful kind of teaching than what we’ve achieved in our classrooms. Most Americans can’t remember the capitals of the 50 states they memorized in grade school, but they can still hum the jingles they watched on TV as children. The same brain science principles that underlie neuromarketing can and should be applied to improving education and teaching techniques around the world.

Making consumers’ lives a little easier Consumers are typically busy, and many of their purchases are not vitally important to them. They want to save money, time, and energy. They also want to get a good return on their investment when they buy. Neuromarketing allows marketers to address these goals more effectively.

65

66

Part I: The Brave New World of Neuromarketing Brands provide a fast-track shortcut through the overwhelming maze of products and offers in many categories. Instead of comparing dozens of product alternatives, consumers limit their decision making to a handful of well-known brands. Neuromarketing helps marketers understand how this process works and how they can make it easier for consumers to use brands as decision-making shortcuts. A brain science subfield called neurodesign focuses on identifying design elements of physical objects that our brains naturally find aesthetically pleasing (see Chapter 10). This work is being leveraged by neuromarketers to help product designers develop products and packages that are fun to look at, are easy to use, and add a small token of aesthetic pleasure to our daily lives. Marketing is often cast in a negative light, but it’s important to remember that marketers live or die by delivering products that humans enjoy more and return to buy again. Sound marketing also attempts to understand how different people, with different wants and needs, can be satisfied by different products. This focus on more targeted consumer segments increases variety in the marketplace, provides unprecedented choices, and enhances value. To the extent that neuromarketing can help uncover these differing consumer wants and needs, which people are often not able to articulate well on their own, it can help product companies bring to market new products that have a better chance of succeeding.

Acknowledging the value of intangible value Rory Sutherland, an executive at the advertising and marketing firm Ogilvy, gave an influential talk in 2009 in which he argued that advertisers (and by extension, marketers) should not apologize for what they do but should celebrate the fact that they provide a rather remarkable service to society — they increase the pleasure and enjoyment we get from consuming things by increasing the intangible value, rather than the tangible value, of the things around us. Sutherland’s point, humorously made, is an important one. Neuroscience and behavioral economics have taught us that all value, as represented in the human brain, is relative. It isn’t inherent in any external “thing” but is perceived — subjective and constructed inside our minds — always in relation to some other subjective perception. Sutherland asks the heretical question: What’s so bad about improving our enjoyment by improving our perceptions, rather than spending money to improve material goods directly?

Chapter 4: Why Neuromarketing Matters Some commentators have called intangible value the placebo effect of marketing. Like a placebo drug, it doesn’t really do anything, but it makes us feel better anyway. Sutherland cites a well-known definition of poetry: “Poetry is when you make new things familiar and familiar things new.” This can easily be a definition of marketing. Marketing is very much about helping people accept the value in new things and continue seeing the value in familiar things. Neuromarketing provides some unique new tools to help marketers address this challenge. Brands are carriers of intangible value. They simplify choice and encapsulate the essence of a product’s promise to consumers. They can summarize a lifetime’s worth of experience with a variety of products under a single brand concept. Strong brands can add intangible value to a consumption experience by adding excitement, pleasure, a sense of well-being, security, or heightened self-worth, thereby delivering more value than an unbranded product can ever hope to achieve. Is that such a bad thing?

Learning to Live with Neuromarketing: The New Realities Not surprisingly, we believe neuromarketing is here to stay — otherwise, we wouldn’t be writing this book! The main reason neuromarketing will endure, we believe, is because it isn’t just another clever concept developed by some consultant or academic. It’s a natural extension of a solid and established foundation of scientific discovery. Neuroscience, social psychology, and behavioral economics are all respected and vibrant scientific disciplines that will continue to direct a stream of insights and findings into neuromarketing.

Neuromarketing is here to stay We don’t believe neuromarketing will usher in a disruptive, new marketing practice. Instead, we expect neuromarketing insights, concepts, and methodologies to be integrated into marketers’ existing toolkits to improve their current practices by giving them new perspectives based on a more realistic understanding of how consumers’ minds actually work. Neuromarketing allows marketers to view many of their most enduring challenges from a new perspective. It offers a new explanatory framework that

67

68

Part I: The Brave New World of Neuromarketing puts many old problems in a new light. To mention just a few examples, neuromarketing helps marketers understand ✓ Why consumers reject new product ideas when evaluating them in focus groups and interviews, yet end up enthusiastically embracing the new product when it’s launched ✓ Why consumers enthusiastically embrace new product ideas in focus groups and interviews, yet fail to buy the new product when it’s launched ✓ Why some highly engaging, high-profile branding initiatives and advertising campaigns fail to move sales, while others have a tremendous impact ✓ Why consumers don’t need to recall an ad in order for that ad to have an impact on their brand perceptions and purchase decisions

Consumers aren’t helpless Much of the fear expressed by critics of neuromarketing seems to be based on an implicit assumption that consumers need to be protected from neuromarketing because they’re weak and passive and, therefore, easy dupes of wily and clever marketers. This is an ironic assessment, because if these critics took the time to understand the brain sciences that underlie neuromarketing (say, by reading this book!), they would realize that consumers are equipped with a highly evolved brain that makes them formidable players in the economic game of buyer versus seller. As we argue in Chapter 2, consumers are not rational consumers as predicted by classic economic and marketing theory, but they are intuitive consumers whose nonconscious and conscious minds work together to help them successfully navigate and make good decisions in an extremely complex and noisy world. If neuromarketing has one key lesson for marketers, it’s to remind them that they’d better respect the intuitive powers of the consumers they want to influence. Consumers are, in fact, not easily fooled and will seek out what’s ultimately good for them, not what’s good for the marketer. As we show throughout this book (especially in Chapters 7 and 8), consumers in modern Western economies have developed some strong corrective responses and decision-making shortcuts that make persuasive messaging even harder to deliver, not easier.

Chapter 4: Why Neuromarketing Matters

Neuromarketing doesn’t provide a bundle of “cheap tricks” to help marketers take advantage of helpless consumers. It provides a more scientifically grounded way to understand the brains of both marketers and consumers.

Seeing your world through a marketer’s eyes Just as it helps marketers to understand how consumers think, it also helps consumers to understand how marketers think. Marketers basically want to understand everything about their consumers because they want to please them. Marketers really do want to satisfy consumers’ needs, not manipulate them. Any marketer will tell you that his life is made much easier when he can give consumers what they want, rather than try to convince consumers to buy something they really don’t have an interest in. This isn’t to say that marketers won’t use every resource at their disposal to get consumers to buy their product over their competitors’ product — because they know their competitor is doing the same thing. As marketers begin to recognize and exploit the ways our brains identify and consume intangible value, it’ll become much harder for consumers to recognize the efforts that marketers are making to influence them in the marketplace. One of the principles of neuromarketing is that nonconscious impacts on people’s judgments and choices lose their power to influence when people are made aware of them. By educating themselves — by reading books like this one — consumers can learn how their nonconscious minds work, as well as how their nonconscious judgments and decision processes may be influencing them as they go about their daily activities. We believe that greater awareness of how marketers are using neuromarketing to understand and influence consumer choices and actions will help consumers to become better economic citizens, make more informed choices, and harvest more of the tangible and intangible value that is available to them in the vast global marketplace.

69

70

Part I: The Brave New World of Neuromarketing

Part II

The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

H

In this part . . .

ere, we look at the breakthrough findings across numerous fields that have provided us with a radical new view into how the consumer’s mind operates. These include new and sometimes startling and counterintuitive findings about how the nonconscious mind interacts with the conscious mind to create impressions, judgments, choices, and behavior. These findings have natural implications for marketing and consumer behavior and will inevitably be applied to marketing questions. In this part, we tell you what all the fuss is about.

Chapter 5

The Intuitive Consumer: Nonconscious Processes Underlying Consumer Behavior In This Chapter ▶ Understanding intuitive brain processes ▶ Appreciating how we think nonconsciously ▶ Taking a second look at the purpose of conscious thinking ▶ Identifying three key variables for neuromarketing research

I

n this chapter, we highlight some important ways our nonconscious minds contribute to our decisions and actions as consumers. First, we discuss the idea that the human brain is a cognitive miser, reluctant to spend any more mental energy than is absolutely necessary to get by in the world. We introduce four brain-processing principles that guide our behavior and simplify our choices as cognitive misers: efficiency, novelty, familiarity, and processing fluency. Next, we show how the nonconscious mind uses these principles to help us make sense of our world and decide what to do, thousands of times a day. We discuss the brain’s amazing ability to make decisions without consciously thinking about them, and show how a remarkable mechanism called priming can trigger complex choices and actions simply by making connections between ideas in our minds, all happening outside our conscious awareness. These amazing capabilities of the nonconscious mind lead us to ask what our conscious mind is really good for. Rest assured, conscious thinking is still very important — but for learning and planning, not so much for decision making.

74

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer Finally, we apply this new knowledge to provide a deeper understanding of the three master variables that marketers care about most when they think about their consumers’ brains: attention, emotion, and memory.

The Intuitive Consumer Is a Cognitive Miser A miser is a person who doesn’t like to spend money. A really good miser knows lots of ways to avoid spending money, like coming up with the perfect excuse to make you pay the dinner bill. Our brains are also misers, but the currency they try to avoid spending is mental effort, the amount of cognitive activity needed to decide and act in the world, including deciding and acting as consumers and shoppers. This tendency toward cognitive miserliness shows itself in many ways in consumer behavior. We describe four important examples in this section: ✓ Efficiency: Our conscious brains are “lazy controllers” of our intuitive evaluations and decisions. ✓ Novelty: We are attracted to novelty and naturally direct our attention to new and interesting things. ✓ Familiarity: We’re drawn to things that are familiar, and we have a natural tendency to equate familiarity with liking. ✓ Processing fluency: We interpret information that is easier to process as more true, persuasive, and likable.

Interpreting our world efficiently Our brains don’t like to work hard. Mental effort takes energy, and the human brain expends more energy than any other organ in the body. The average brain takes up only about 3 percent of a person’s body weight but consumes about 20 percent of the calories a person takes in every day. So, it has evolved to run efficiently. In Chapter 2, we introduce Daniel Kahneman and his System 1–System 2 model of mental processing. Kahneman’s model helps us understand an important aspect of mental efficiency, which he calls lazy control. Lazy control is basically the idea that System 2 (the conscious mind) doesn’t watch too closely over System 1 (the nonconscious mind). Because our brains operate more efficiently when we avoid heavy mental effort, our default mechanism is to avoid activating conscious control unless absolutely necessary.

Chapter 5: The Intuitive Consumer Thus, our conscious minds exert only lazy control over our nonconscious processing. You may guess that our propensity for mental efficiency via nonconscious processing is a bad thing, and we’d be better off if we, like Mr. Spock, disciplined our brains to work harder more often. In fact, there is now considerable evidence that this isn’t the case. Researchers have discovered that expending mental energy to control our behavior depletes our ability to exert control later on. This effect, called ego depletion, makes us more susceptible to temptation and loss of self-control following a bout of heavy mental effort. For example, in a series of experiments conducted by social psychologist Roy Baumeister, people who resisted the temptation to munch on M&M’s or freshly baked cookies were less able to resist other temptations later on. When people were instructed to restrain their emotions during a sad movie, they gave up more quickly on later tasks requiring self-discipline, like working on a geometry puzzle or squeezing a hand-grip exerciser. All these influences of heavy mental effort on later performance occurred outside the participants’ conscious awareness.

The lesson for consumers: If you have to try really hard to control your snacking as part of your new diet, you may find yourself less able to resist buying that bag of cookies the next time you go shopping. The principle of mental efficiency isn’t always the enemy of the wise consumer, as it’s sometimes portrayed. Thinking too much, as well as thinking too little, can cause us to do things we later wish we hadn’t done. Knowing that people have this built-in tendency for mental efficiency, marketers are faced with an ethical choice: They can either design their marketing efforts to communicate their brand and product stories more effectively at an intuitive level, or try to “play the system” by creating false associations that they hope consumers won’t notice due to their reluctance to engage in conscious, deliberative evaluation. We strongly advise against the second path, not just because it’s deceptive and unethical, but because it’s based on a false premise. Intuitive consumers are much better equipped to identify false associations than unscrupulous marketers may think they are.

Catching our eye with novelty Consider this scenario (presented by Jeff Hawkins in his book On Intelligence [Times Books]): You walk into your cluttered and messy office one day and notice a blue coffee mug sitting on your desk. You’ve never seen that mug before. You know it’s new. How did you perform this feat, spotting that one new item out of the hundreds of other items in the room?

75

76

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer The answer is that you were exercising a fundamental of brain functionality: Your mind doesn’t passively observe the world; it proactively predicts what it expects to see (or otherwise sense) at every moment. In this example, you were able to spot that blue coffee mug — immediately and effortlessly — because it, and it alone, violated your mind’s prediction of what you expected to see in the room. Novelty is a function of prediction error, which is also called expectancy violation. The more something violates our expectations, the more surprised we are, and the more novelty we attribute to the source of the violation. Our brains are hard-wired to alert our conscious minds when an expectancy violation occurs. The result of this process is usually a shift of attention toward the novel object. This process should be of great interest to marketers, because a key purpose of any new package on the shelf or ad spot during prime-time TV is to draw people’s attention and stand out against the background clutter. But there is also a downside to novelty: It isn’t automatically associated with positive emotional response. On the contrary, the brain tends to approach novelty with caution. A byproduct of attention is vigilance, because something new and unknown may be dangerous or harmful. So, our attraction to novelty comes with a bit of a paradox attached: We’re drawn to novelty because we can learn from it, but we don’t usually like it until it becomes less novel. Marketers often see this effect when they introduce consumers to new products or packaging designs. More often than not, they find that the alternative rated most “new and different” is also rated the least liked. In evolutionary terms, our attraction to novelty has helped us survive because it enables us to learn new things and reduce risk and uncertainty in our lives. As we learn more about novel things in our environment, our orientation toward them changes. They become less novel, and we pass from the attraction of novelty to the comfort of familiarity.

Comforting us with familiarity Familiarity is one of the most powerful drivers of consumer behavior. And like our attraction to novelty, our attraction to familiarity has deep evolutionary roots. Although novelty alerts us to opportunities for learning, familiarity gives us a feeling of comfort with what we’ve learned. When something is familiar, we can allocate much less mental effort toward it. We acquire an increased sense of certainty without expending a lot of additional mental energy. This is clearly a good deal for our cognitive miser brains.

Chapter 5: The Intuitive Consumer Familiarity is important for market researchers because it’s a major source of brand and product preferences. Because consumers are cognitive misers, they often make buying decisions using lazy control instead of explicit deliberation. Familiarity thus becomes a heuristic (decision-making shortcut) that helps them narrow down their choice options and make a final selection. Along with price, brand familiarity is the most commonly cited factor in consumer decisions. Social psychologists have discovered that familiarity itself breeds positive feelings, independent of the characteristics of the item in question. Through a mental process called the mere exposure effect, repeated exposure to an object tends to increase liking for it, whatever it is, even if we have no other reason to like it. Scientists speculate that this automatic connection between familiarity and liking is the main reason familiarity is so strongly related to consumer preferences. Studies also show that consumers are generally unaware of the mere exposure effect and are quite willing to attribute — or more correctly misattribute — their positive feelings toward a familiar brand to its inherent qualities. This is one of the many biases that distort the accuracy of consumers’ expressed opinions about their brand and product preferences (see Chapter 15). Understanding the power of familiarity and the mere exposure effect has at least three big implications for marketing, advertising, and consumer behavior: ✓ Familiarity is a key element of brand equity, accounting for much of the marketplace advantage of leading brands (see Chapter 9). ✓ Mere exposure provides a mechanism for getting a product or brand from novel to familiar. Many marketing tactics, such as free samples or “introductory offers,” have the effect of increasing exposure to new products, which marketers hope will translate into familiarity, liking, and repeat purchases (see Chapter 10). ✓ Mere exposure goes a long way toward explaining why advertising works, even when people swear that they aren’t influenced by advertising at all (see Chapter 11). Of course, there are limits to the positive emotional impact of familiarity, because liking does not increase with repetition forever. At some point, repetition becomes irritating or simply boring, switching emotional associations from positive to negative. As with novelty, too much familiarity can trigger avoidance rather than approach. A key problem for marketers is determining when and where these switching points occur.

77

78

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Keeping things simple with processing fluency Processing fluency refers to the ease with which an object or situation can be interpreted and understood by the brain. It impacts our ability to form impressions and determine meaning and value. Like familiarity, processing fluency tends to increase positive feelings, but it does so using a different mechanism. Familiarity creates liking through frequency of exposure, while processing fluency does so through ease of processing. Numerous experiments have shown that processing fluency can have powerful effects on people’s judgments and decisions, many of which are extremely relevant for marketing and market research: ✓ Familiarity and liking: Ironically, when something has high processing fluency, it can appear to be more familiar even if it is not, causing people to feel more positively toward it than if it were less easy to process. ✓ Truth: Arguments and statements that are easy to read are more likely to be seen as true. Factual statements presented in easy-to-read colors are judged to be true more often than when presented in hard-to-read colors. Folk sayings presented as rhymes are rated as more truthful than those that don’t rhyme. ✓ Beauty: Faces that are more symmetrical are seen as more attractive. Objects that have more symmetry, more contrast between foreground and background, and more predictable patterns are rated as more aesthetically pleasing. ✓ Risk: New initial public offering (IPO) companies that have pronounceable stock symbols (for example, KAR) perform better in their first six months than companies with unpronounceable symbols (for example, XXY). Amusement park rides with hard-to-pronounce names are rated as more exciting and adventurous than rides with easy-to-pronounce names. Food additives with hard-to-pronounce names are seen as more harmful than additives with easy-to-pronounce names. ✓ Scrutiny and learning: Easy-to-process materials are less likely to be carefully scrutinized. Conversely, disfluency triggers more scrutiny, more attention to detail, and better memory retention. Students who read lessons in hard-to-read fonts achieved higher test scores than students who read the same lessons in easier-to-read fonts (see Chapter 22). As with the effects of familiarity and repetition on liking, these misattribution effects of processing fluency tend to go unrecognized because they occur nonconsciously. Interestingly, when they’re explained to people, the effects

Chapter 5: The Intuitive Consumer tend to go away. So, we’re capable of discounting processing fluency effects, but we need to be aware of them in order to do so. And it’s probably true that neither marketers nor consumers are aware of many of these effects and their inadvertent impacts on consumer judgments, decisions, and behavior.

Some obvious neuromarketing tips follow from these examples of processing fluency:

✓ If you want to give your customers a good head start toward liking your new product, give it an easy-to-pronounce name. ✓ When presenting your product in a new ad, keep it simple and remember that the fluency or disfluency of how you talk about your product may transfer to the product itself. ✓ When presenting product information in marketing communications, format and display your message in a way that facilitates easy processing — short sentences, lots of white space, graphical illustrations, and so on. ✓ For policy makers and regulators, pay attention to fluency effects when communicating to consumers about potential hazards. Be aware that a hazardous product may be perceived as safe simply because it has an easy-to-pronounce name.

The Nonconscious Mind Anchors Us in the Moment Nonconscious thought processes used to be dismissed as simple and relatively dumb. Today, modern brain science is revealing that these processes play a much more active role in many of the mental capabilities we prize as uniquely human, including creativity, learning, language, and achieving our goals and plans.

The survival value of nonconscious thinking Until recently in the history and philosophy of science, mental activity was considered to be predominantly conscious in nature, with nonconscious processes seen mostly as intermittent sources of disruption or irrationality, as in the Freudian tradition of the unruly and dangerous unconscious. But today, brain scientists are slowly displacing the conscious mind with the nonconscious mind as the center of human mental activity. This shift is as important, and as profound, as the shift in astronomy from the earth-centered to the sun-centered solar system.

79

80

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer This emerging perspective is largely driven by a greater appreciation of the evolutionary origins and adaptive value of the nonconscious. Brain activities below the level of conscious awareness are now seen as a complex behavioral guidance system that evolved to help us stay safe and function efficiently in the current moment without having to invest too much cognitive effort in doing so. This guidance system is made up of four separate mental systems that can be directly and nonconsciously activated by changes in our environment and then trigger behavior, without conscious intervention: ✓ Perceptual: Guides how we take in impressions and orient our attention and our bodies in the physical world ✓ Evaluative: Guides approach and avoidance behavior based on automatic evaluations that occur as part of interpreting and understanding a situation ✓ Motivational: Guides nonconscious goal pursuit and achievement via the nonconscious activation of goals in response to external events ✓ Emotional: Guides the nonconscious activation of goals and motivational states via the nonconscious influence of emotional states such as moods and positive or negative reactions Together, these nonconscious systems form the foundation of our day-to-day behavior and our orientation to whatever current situation we find ourselves in. They’re highly adaptive and flexible — they served us well when we were living in small bands and sleeping in the trees, and they continue to serve us well in the modern world, including the increasingly complex world of shopping, buying, and using commercial products.

Why we’re not conscious of our nonconscious The human brain can be thought of as a series of layers, like a multistory apartment building, constructed over millions of years, one layer on top of another. The lowest layer takes care of basic housekeeping functions, like maintaining our body temperatures and keeping our hearts beating. This is our so-called reptilian brain. Above that is the much more recently developed mammalian brain, where many of our nonconscious, automatic processes reside. These processes were selected and preserved by evolution for survival value long before consciousness was invented, and have been inherited by us. The top layer is the most recent addition, the unique human brain,

Chapter 5: The Intuitive Consumer where our conscious, self-reflective minds are located. Although some parts of the brain are older than others, it’s important to remember that they all continue to evolve together, so they shouldn’t be thought of literally as old brain versus new brain. The basic reason we aren’t conscious of our nonconscious is because of this architecture of our brains. The conscious brain is densely connected to the outside world, through all our senses, but is much more weakly connected to the inside world of our lower-level mammalian and reptilian brains. It’s kind of like having a direct elevator to the penthouse suite — you have great views, but you never have a chance to run into your neighbors who live on the lower floors. Thinking functionally, you can easily see why this arrangement has evolved in this way. The great advantage of our conscious minds is the ability to remember and learn from the past and apply what we’ve learned to plan for the future. We would be much less effective at doing this if we had to devote most of our conscious attention to managing all the minutiae of orienting ourselves in the present. So, our nonconscious minds take over much of this work for us. Our nonconscious anchors us in the moment, keeping us (for the most part) safe and functioning, so we can use our conscious minds for more important things, like learning and planning.

How we make decisions without thinking about them The conscious brain is optimized for learning and planning, not making decisions. This conclusion may come as a shock to many economists and marketers, but this is the great lesson of the field of behavioral economics. We don’t use our conscious brains to make decisions unless we’re forced to do so. This is perhaps the most important implication of the cognitive efficiency principle: Our brains are cognitive misers, and making decisions expends a lot of cognitive “currency,” so our brains avoid conscious decisions when they can. As we show in this chapter, humans have developed many nonconscious tactics for aiding cognitive efficiency, such as relying on lazy control, novelty, familiarity, and processing fluency. When applied to the problem of making choices, these shortcuts allow us to turn potentially exhausting decisions into fast and simple reactions. People have developed many terms for describing these “quick and dirty” decisions: snap judgments, hunches, gut reactions, blink responses. But they

81

82

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer all share one key attribute: They substitute an internal survey of feelings for a more cognitively demanding consideration of external facts. The role of feelings and emotions in consumer behavior is so important that we devote a full chapter to it (Chapter 6). For now, we simply note that we make decisions without thinking about them by reading emotional signals — very basic approach or avoidance signals — that are built directly into our nervous systems by our past personal experiences or, in some cases, by evolutionary inheritance. This process happens so quickly and at such a low level in our brains that we’re very seldom aware of it.

The priming directive: Influence without awareness This discussion of nonconscious influences having a direct impact on behavior begs an important question: If external factors can influence our behavior directly, without passing through our conscious mind, then how do they do that? By what alternative mechanism do they accomplish this almost magical effect? The mechanism that accomplishes this task is called priming, and the drivers of priming are called primes. Priming is a nonconscious brain process. It occurs quickly, automatically, and effortlessly. The mental process within which it works is called associative activation. This process is well known to psychologists and describes how exposure to one idea in our minds automatically activates other, associated ideas, which then can trigger physical responses in our bodies and, ultimately, complex behaviors like words and actions. For example, seeing a pizza ad on TV may prime eating, and you may find yourself getting a bowl of cereal at the next ad break. That’s priming. Associative activation depends on a built-in propensity in our minds to imagine any pair of events that occur sequentially as a cause and its effect. This is not a logical evaluation; it’s a way of preparing our bodies for possible action. Associative activation occurs by amplifying any connections we find in our long-term memories that can possibly relate to the presumed connections we’ve imagined. These connections, in turn, amplify other connections in a cascading sequence that quickly results in large areas of memory being made ready to help understand and respond to the imagined cause-and-effect relationship. All this occurs long before our conscious minds can apply deliberative, logical reasoning to the situation.

Chapter 5: The Intuitive Consumer

Associative activation: An example Read the following words: peanut butter choke Immediately following your exposure to those two words in sequence, several things happened: ✓ You automatically imagined a sequence and causal connection between the two words, forming a sketchy story in which peanut butter caused choking. ✓ You responded physically to this imagined story, almost as if it were actually happening to you: You experienced some unpleasant images and memories, your face twisted slightly in an expression of disgust, your heart rate increased, the hair on your arms rose a little, and your sweat glands were activated. ✓ A warning was activated in your mind — you experienced a temporary emotional aversion to peanut butter.

✓ Associations in your memory were activated — not brought into full consciousness but prepared to be brought into consciousness. You became much more ready to recognize and respond to objects and concepts associated with choke and peanut butter. ✓ You considered other ways that the unfortunate outcome you imagined could occur, and, as a result, you became much more ready to recognize words associated with those other scenarios. ✓ You made an assessment of the likelihood or frequency of these two ideas showing up together. Because this is a relatively uncommon pairing of ideas, you experienced a mild level of surprise. All these effects happened automatically and outside your conscious awareness. Note: This example was derived, with slight modifications, from Thinking, Fast and Slow, by Daniel Kahneman (Farrar, Straus and Giroux).

Priming is a byproduct of associative activation. When one idea activates another, we say that the first primed the second. When a behavior results from an activation sequence, we say the behavior was primed by the idea that initiated the sequence. The resulting priming effect is a measure of the strength of association between one idea (the prime) and another idea or action (the primed effect). By measuring priming effects, brain scientists and neuromarketers can peer, if only indirectly, into the invisible world of mental associations and automatic behavioral responses. Research on priming has exploded over the last decade and has yielded many intriguing examples of influence without awareness that are relevant to marketing and consumer behavior. For instance: ✓ A backpack placed unobtrusively in a room can prime cooperative behavior, while a briefcase can prime competitive behavior. ✓ Candy bars can prime pleasure-seeking behaviors that have nothing to do with eating candy.

83

84

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer ✓ Solving puzzles that contain words relating to old age can prime walking more slowly after completing the test. ✓ Money (for example, a dollar bill left casually on a table) can prime greedy behavior. ✓ Barely detectable scents of cleaning products can prime hand washing. ✓ Invoking a significant other (say, a demanding father) can prime goals and behaviors associated with that person (such as greater effort in a problem-solving task). ✓ Exposure to a brand can prime behaviors associated with that brand (for example, exposure to an Apple logo primed people to be more creative in a creativity test). From the neuromarketing perspective, ads are primes that are supposed to influence buying behavior later on. Displays in stores and images on packages are primes that are supposed to influence immediate choice in a shopping situation. Brands are primes that are supposed to associate inanimate products and companies with our deepest personal aspirations and goals. For neuromarketers, priming is the key mechanism, deeply rooted in the brain sciences, by which marketing in all its forms (ads, displays, promotions, discounts, celebrity endorsements, even naming ballparks) impacts consumer attitudes and buying behavior.

How priming works Priming research has identified two very different ways that priming works: ✓ Associative priming: A passive cognitive connection between a prime and a primed effect, such as walking slowly after being exposed to words about old age. Associative priming effects tend to be short-lived, be relatively weak, decrease in power over time, and be easily interrupted. ✓ Motivational priming: An active triggering of a goal that then influences behavior. Goal-based priming effects, whether initiated consciously or nonconsciously, tend to grow stronger over time, persist through obstacles, and decrease quickly when the goal is satisfied. Motivational priming begins with associative priming, but then triggers goals as well as associations. Marketers and neuromarketers are mostly interested in the second type of priming. For more details on this topic, see our discussion of motivation, goals, and consumer behavior in Chapter 7. For a deeper dive into associative priming, see the discussion of response-time studies in Chapter 17.

Chapter 5: The Intuitive Consumer Why priming doesn’t turn us into zombie consumers Let’s be honest. The idea of influence without awareness, of primes impacting our behavior without our knowing it, makes most people feel a little queasy. We feel vulnerable and defenseless, at the mercy of wily marketers who can trigger associations in our minds that we’re powerless to resist. This theme has been the subject of more than a few popular-press articles decrying the threat posed by neuromarketing, warning against the imminent discovery of a “buy button” in our brains that, when pressed, will turn us all into “zombie consumers,” unable to resist the marketer’s siren song. In fact, priming research has revealed that people aren’t nearly as helpless as they might appear. Several findings show that the priming mechanism is actually very resistant to unwanted manipulation. It may even provide nonconscious defenses that make it harder, not easier, for marketers to reach and persuade consumers with their marketing messages. Research has shown that two conditions need to be in place for motivational, goal-based priming to work: ✓ Current-state to goal-state gap: The person being exposed to the prime must be experiencing a gap between how he feels at the moment and the goal being primed. For example, if someone is trying to lose ten pounds, he’ll be susceptible to priming that will trigger behavior that moves him toward that goal. But if another person has just met her goal to lose ten pounds, those primes will have no impact on her. ✓ Positive feelings toward the goal: The goal must be something the person feels positively about. People can’t be primed to do things they don’t want to do. If someone doesn’t want to start smoking, priming with the Marlboro Man is not going to make him or her do so. Priming does not create goals; it only orients behavior toward goals that already exist. The existence of these conditional effects reinforces the idea that priming is an adaptive mechanism. If it worked against our survival chances, it would’ve been deselected by evolution a long time ago. It exists today because, on the whole, it works for us, not against us. There is another aspect of priming that marketers might view with some alarm. In a recent study of the priming effects of brand names and slogans, researchers led by Juliano Laran discovered the existence of reverse priming effects (that is, priming in the opposite direction from what was expected). The researchers found that priming with retail brand names associated with thriftiness, such as Walmart or Kmart, led to lower estimates of how much a person would spend in an upcoming shopping trip, while priming with retail brand names associated with high-end shopping, like Nordstrom or Tiffany, led to higher spending estimates. This was as expected. However, when the

85

86

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer same test was conducted with the slogans of these retail stores, they found a reverse priming effect. Now the thrifty store slogans primed higher shopping trip spending estimates, and expensive store slogans primed lower shopping trip estimates. The explanation, which the researchers confirmed with several other experiments, was that the slogans were perceived by the participants as persuasion attempts, in a way that the brand names were not. This perception primed a goal in the participants that the researchers did not intend, to correct against persuasion. The participants then satisfied that goal by predicting more spending after seeing the thrifty store slogans and less spending after seeing the expensive store slogans. All this occurred at a nonconscious level. The participants were completely unaware that the slogans had triggered this correction goal, or that they had satisfied that goal in the way in which they performed the shopping estimation task. This is just one example from a growing literature on correction goals that has much significance for marketing. Given what we’ve learned in this chapter about the brain’s resistance to deep thinking in general, we shouldn’t be too surprised that our marketing-bombarded brains have developed some built-in, automatic defenses against persuasion, which, after all, requires some serious cognitive attention to do its job. Creating zombie consumers is not as easy as a casual acquaintance with priming might suggest. We don’t want to jump to the opposite extreme and say that this means all marketing is futile, but we do believe it provides good evidence that the intuitive consumer is not defenseless when it comes to processing and reacting to marketing primes. Nonconscious processes don’t necessarily work against us just because we aren’t aware of them.

So, What Is Consciousness Good for, Anyway? If the nonconscious mind is such a great evaluator, decision maker, and behavior influencer, another question immediately arises: What, then, is the conscious mind good for?

Taking over from the nonconscious when necessary Consciousness — or more specifically self-consciousness — gives humans an incredible advantage over all other species on the planet. It gives us the

Chapter 5: The Intuitive Consumer capacity to think about our own thinking, observe our own behavior, draw conclusions, and make plans for the future based on that knowledge. Nonconscious thinking works best in routine situations. As long as things don’t change too drastically, automatic, effortless processes can be amazingly efficient. But when you confront something new or completely unexpected, your conscious mind will almost always take over, focusing on the new situation, comparing it to past experience, and planning what to do next. The conscious mind always has the capacity to interrupt and override nonconscious processing. However, because of the efficiency principle, it does this much less often than you might expect. Most scientists agree that only about 5 percent to 10 percent of our information processing capacity is utilized by conscious thought. The remaining 90 percent to 95 percent is all nonconscious. One thing conscious thinking can do is make nonconscious effects disappear. Research has documented that effects like priming and processing fluency tend to go away when people are made aware of them. If you’re told that a backpack in the corner can prime you to be more cooperative, for example, the effect will vanish and you’ll no longer be more cooperative when the backpack is in the corner. Our reliance on nonconscious processes is a convenient shortcut to behavior. Our conscious brains are free to override them if we so choose. For marketers, the issue comes down to this: Sometimes you want to wake up conscious thinking about your product and brand and sometimes you don’t. Knowing when conscious processing works to your advantage and when it doesn’t is something that neuromarketing can help you understand.

Talking to ourselves We experience our conscious minds primarily as voices in our heads. The voice is almost always talking. Often it breaks into two parts and a person has a dialogue with herself. This ongoing internal conversation is part of what it means to be human. It’s how we come to grips with our world and ourselves. It’s the mechanism by which we deliberately pick apart our past and plan for our future. Possibly the biggest obstacle to accepting the reality of the nonconscious is the strong sense that conscious thinking, which we experience so vividly, is all the thinking we do. But it’s only all the thinking we’re aware of. We are, in fact, operating with very partial information about ourselves and what influences us. As Leonard Mlodinow says in his excellent book, Subliminal: How Your Unconscious Mind Rules Your Behavior (Pantheon), our view of ourselves and our motivations is like a jigsaw puzzle with most of the pieces missing.

87

88

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Thinking about the past and the future What the conscious brain does well, and the nonconscious brain does extremely poorly, is thinking about the past and planning for the future. The ability to deliberate about our situation, compare it to the past, and play out in imagination different possible scenarios for the future, provides a huge survival advantage over simply reacting in a nonconscious way. Social psychologists call the nonconscious behavioral guidance systems we review is this chapter our default system for guiding behavior, one that existed evolutionarily long before the development of consciousness. Now that we have consciousness, we have another route into these systems, but one that’s unable to probe into their workings because it operates at a different level in the brain than they do. So, although the conscious brain interacts continuously with the nonconscious brain, and is constantly drawing on the outputs of nonconscious processes, it’s unaware that it’s doing so. The emerging consensus is that the primary role of the nonconscious is to keep us tied to the present, to provide automatic behavioral guidance “nudges” that orient us toward behavior that has a high likelihood of being safe, correct, and appropriate in the situation we find ourselves in. That leaves the conscious brain free to do what it does best, which is to engage in what social psychologist John Bargh calls “time travel” — traveling into the past to remember what we’ve learned and projecting ourselves into the future to plan and anticipate how to achieve the future states we desire for ourselves.

The Three Master Variables of Neuromarketing Research The conscious and nonconscious processes in our brains work together to help us understand and function successfully in the world around us. Sometimes this remarkable machinery is put to worthy tasks like thinking great thoughts, developing new philosophies, or discovering world-changing scientific theories. But most of the time we use our brains for much more mundane tasks, like remembering to pick up diapers for little Susie down at the Stop & Shop. The purpose of neuromarketing is to explain how we use the most complex structure in the universe to do things like buy toothpaste. In pursuing this purpose, which ends up being much more interesting than it sounds, neuromarketing comes back again and again to three master variables that

Chapter 5: The Intuitive Consumer represent the three things that marketers care about the most when they want to understand the brains of their consumers. ✓ Attention: Did they notice my ad or product? ✓ Emotion: Do they like it? ✓ Memory: Will they remember it? These are the three key cognitive processes that neuromarketing is devoted to understanding in the context of consumer behavior. Each has conscious and nonconscious components. We close this chapter by briefly reviewing how these three processes relate to the topics we discuss in previous sections.

Attention: The doorway to conscious awareness You can’t pay attention to something without being aware that you’re paying attention to it. So, attention is a conscious phenomenon. But something needs to happen in your brain to cause you to focus attention or shift your attention from one object to another. These pre-attentive processes may be either conscious or nonconscious. You can shift attention voluntarily, as when you actively search for a friend’s face in a crowded room. This is called top-down attention. Or you can have your attention automatically shifted for you by your environment, as when you hear your name spoken across a room. That is called bottom-up attention. Attention is deeply involved in novelty detection. Surprise is the basic mechanism of attention shifting, and we’re naturally predisposed to direct conscious attention to things and situations that our brains consider novel. Our ability to focus attention is extremely limited. Engaging in concentrated attention is one of the hardest things for our brains to do. Attention expends a lot of cognitive effort, so our cognitive miser brains use it sparingly. For marketers, attention isn’t always a good thing. When you want consumers to experience something new — like a new product, package, or ad — you want to trigger attention. But familiarity-liking and processing-fluency effects disappear when attention is aimed at them. Attention is important to new products and brands. It’s an important variable in the online world, because online experience is active and task oriented, not passive like watching TV. Attention may be a negative factor in advertising, because it has been shown to trigger counter-arguing, which may

89

90

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer diminish the effectiveness of ads. Attention is a variable to be manipulated in entertainment: Misdirection is a key element of narrative surprise, as well as in illusions and magic. In all these contexts, attention is an ingredient that needs to be measured. Neuromarketing provides several ways to measure it (see Chapter 16).

Emotion: Arousal, attraction, motivation Emotion is extremely important to all aspects of marketing and consumer behavior. Traditionally, market researchers have tried to measure feelings, which are our conscious emotional experiences. But nonconscious emotional reactions like approach-avoidance responses and micro-valences (subtle emotional cues associated with everything we experience and store in memory) may play a larger role in consumer behavior. Emotion is usually classified along three dimensions, which we cover at length in Chapters 6 and 7): ✓ Valence: The direction of emotion, measured from positive to negative ✓ Arousal: The intensity of emotion, measured from low to high ✓ Motivation: The action orientation of emotion, measured from approach to avoidance Emotion is an end product of both familiarity and processing fluency. Things that feel familiar or are easy to process tend to be more liked. These associations are often misattributions. We mistake our response to the form or context of the object with its inherent qualities. But these responses are common and very relevant to marketing. Emotional connection is very important to the idea of loyalty, both to brands and products. It’s earned through product usage, experience, and social validation. Emotion is also important to responses to the many forms of online social media. Searching for information on Google is primarily a cognitive activity, but keeping track of friends on Facebook is an emotionally complex form of social interaction. The importance of emotion as an explanatory variable or as an outcome variable differs from consumer context to consumer context. Neuromarketers have developed several methods for measuring emotional response directly, as it occurs, instead of asking people to rate it after the fact.

Chapter 5: The Intuitive Consumer

Memory: How we construct, retrieve, and reconstruct the past Memory is the most complex of the three master variables of neuromarketing. It has both input and output functions that are critically important to marketing. On the input side, we encode or store memories. On the output side, we retrieve or remember memories. Marketers are interested in both these aspects of memory. Each has a conscious and nonconscious component. Conscious encoding is the familiar process of explicit learning or memorization. But there is also an implicit form of memory encoding that is nonconscious and effortless. Implicit learning happens in the absence of memorization, and it plays a big role in how marketing messages work. On the retrieval side, we’re all familiar with conscious recall, which is the voluntary retrieval of a memory. But equally important in the marketing context is recognition, which is a bottom-up form of memory retrieval. We may not be able to recall the message of an ad, but we can easily recognize it when we see it. The important thing that marketers need to understand about memory is that it’s constructed, not passively retrieved. A memory is not like a video recording that we “replay” when we remember it. Every time we retrieve a memory, we change it. This means that marketing not only invokes memories, but also literally alters them. Marketers have yet to fully internalize the implications of this startling fact. Memory is an especially important component of familiarity, and its absence is a cue for surprise and attention. Memory is central to brand equity and to any marketing message that needs to persist over time, like an ad. It’s less important for online marketing, where delay is less an issue. Neuromarketers have developed metrics for determining whether memory activation is taking place. Because these methods aren’t yet able to discriminate between memory encoding and retrieval processes, there is still a place for traditional methods in measuring memory. Sometimes just asking people what they remember does the trick.

91

92

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Chapter 6

The Central Role of Emotions in Consumer Responses In This Chapter ▶ Seeing why nonconscious emotions are central to consumer responses ▶ Understanding how nonconscious emotions differ from conscious feelings ▶ Appreciating the subtle ways emotions impact our bodies, and vice versa ▶ Explaining how emotions influence attention and memory

I

n 1994, Antonio Damasio, a physician and neuroscientist at the University of Iowa, published a book that changed the way brain scientists thought about rationality and emotion. In Descartes’ Error: Emotion, Reason, and the Human Brain (Penguin), Damasio showed that emotions, far from being the enemy of rationality, were essential to good decision making. Patients with damage to emotional centers in their brains were not cool and calm deciders like the hyper-rational Mr. Spock (see Chapter 2). Instead, they were barely able to make decisions at all! Damasio made the profound connection that emotions are not just compatible with good decisions; they’re indispensible contributors. In this chapter, we explore the new view of emotions that has emerged in the brain sciences since Damasio’s discovery. We explain why it’s central to understanding consumer behavior and show how emotions interact with both attention and memory to influence consumer responses to marketing and products.

Understanding Nonconscious Emotional “Markers” Damasio uses the term somatic markers to describe how emotions impact perceptions, evaluations, decisions, and behavior. Somatic markers are essentially memories of bodily responses to past experiences.

94

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer According to Damasio’s somatic marker hypothesis, these emotional markers are created and updated for every experience a person has in his or her life. When we confront a new situation, these markers are rapidly accessed, often nonconsciously, and provide an emotional guide for what to do next. If we’re conscious of this effect at all, we experience it as a slightly pleasant or unpleasant sensation associated with different options. Deprived of these emotional signals, Damasio’s patients engaged in long and meandering cost-benefit analyses of options and consequences, from which they never seemed able to come to a final conclusion. Even choosing between two brands of cereal proved to be an excruciating and inconclusive process. For the rest of us, the benefits of relying on emotional markers are clear. Emotional markers greatly simplify our ability to interact successfully with the world around us. Even though we may not be aware of the degree of attraction or aversion that we may have “marked” for a given object or situation, those markers provide us with a nonconscious shortcut to a quick and acceptable response, cutting through the potentially infinite expanse of pros and cons that may be relevant. We’re instinctively drawn in or repulsed by the emotional markers our past experience has assigned to each outcome. Because of this, and unlike Damasio’s unlucky patients, we can decide quickly and easily. The survival value of this system is clear. Emotional markers allow us to react instinctively to changes in our environment. These reactions happen automatically, instantly, and without conscious thought. Imagine early humans encountering some dangerous predator. Those who could react instantly and run away survived. Those who had to stop and think about what to do became predator lunch. In the modern world, humans apply this mechanism to product preferences, consumer decision making, and behavior. Consumers short on time, bombarded by information, and faced with barely distinguishable product alternatives rely on easily accessible emotional reactions to make shopping decisions. Because these reactions are not directly related to remembered product attributes or marketing messages, they operate outside the set of variables usually measured by traditional market research — explicit awareness, need, recall, and persuasion. Unlike traditional market researchers, neuromarketers place these elusive nonconscious emotions at the center of their understanding of consumer behavior and have developed a toolkit of methods to measure them.

Chapter 6: The Central Role of Emotions in Consumer Responses

Nonconscious emotions versus conscious feelings The term emotion actually encompasses a wide variety of mental states. The first important distinction is the difference between conscious emotions (commonly called feelings) and nonconscious emotions (called by scientists affect, or affective states). We’re all aware of feelings. We know when we feel sad, happy, joyful, angry, or depressed. Feelings can often be attributed to a specific object or situation (meeting a well-liked friend, standing in a long line at the bank), but sometimes they can be more generalized moods — emotional states that don’t have an obvious source. Somatic markers, as described in the previous section, are nonconscious affective states. We generally aren’t aware of them and don’t have access to how they influence our perceptions, choices, or behaviors. Brain scientists believe nonconscious and conscious emotions operate together to draw our attention to beneficial opportunities in our environment, alert us to dangers, and remind us to learn from our experiences. One prominent theory, proposed by Roy Baumeister and colleagues in 2009, holds that emotions shape behavior indirectly rather than directly through the following: ✓ Learning: Conscious emotions usually appear after, rather than before, emotional episodes, when they can best promote learning and establish or reinforce nonconscious emotional associations. ✓ Anticipation: Automatically activated nonconscious emotions can immediately trigger approach or avoidance behaviors or, more often, influence judgments, goals, choices, and actions through nonconscious means. ✓ Reflection: Once internalized in memory, acquired knowledge of emotional experiences can serve as input for selecting actions and strategies to achieve (or avoid) emotional outcomes in the future. There is a natural feedback in this system at both the conscious and nonconscious levels. Consciously, what we learn from emotional episodes gets applied to future similar episodes, which then provide an opportunity for further learning. Nonconsciously, our emotional markers are updated by every encounter we have with people and objects in our world. This way of thinking about emotions gives us a framework for understanding the role of emotions in consumer responses. When we’re thrilled by the experience of driving in a fast sports car, we learn from that conscious emotional experience. This becomes a direct input into our later conscious feelings, brand preferences, choices, and behaviors in that product category.

95

96

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer In addition, that experience updates our nonconscious emotional markers, which impacts mental processes we aren’t aware of, like the extent to which we notice information about that car in the future, the type and amount of information we commit to memory, and even the goals and motivations we form with regard to driving and purchasing automobiles. Emotions are also classified as either discrete or as points along underlying dimensions of emotion. The discrete emotions approach contends that each emotion (such as anger, joy, or disgust) has a unique profile in experience, physical presentation, and behavior. According to the dimensional perspective, all emotions can be classified along a small number of fundamental dimensions. As introduced in Chapter 5, the most commonly measured dimensions are ✓ Arousal: Activation, stimulation, excitement ✓ Valence: Liking, disliking ✓ Motivation: Action orientation, approach-avoidance predisposition Although the issue hasn’t been resolved conclusively, current evidence tends to support the dimensional view of emotion. Dimensional frameworks have been shown to work well for classifying emotional states and predicting their impact on behavior. Most neuromarketing tools that measure emotions use brain or body measures to rank emotional responses along one or more of these three dimensions (see Chapter 16).

I feel your pain: Emotions and body states Another important aspect of emotions is that they’re closely related to body states. This works in both directions: Changes in our bodies produce changes in emotions, and changes in emotions produce changes in our bodies. This connection has obvious implications for marketing and provides a foundation for interesting research directions in neuromarketing. Many findings in social psychology illustrate that changes in body states such as movement and facial expressions can lead to changes in emotions. Here are some examples from research in this field, called embodied cognition: ✓ People instructed to nod their heads (as in agreement) while listening to persuasive messages felt more positively toward the message than people instructed to shake their heads (as in disagreement). ✓ People who looked at Chinese symbols while pulling a lever toward them (an approach movement) later liked those symbols more than people who looked at the same symbols while pushing the lever away from them (an avoidance movement).

Chapter 6: The Central Role of Emotions in Consumer Responses ✓ People asked to hold pens in their mouths in a way that forced a smilelike expression were more amused by cartoons than people who were forced to hold pens in their mouths in a way that forced a frown-like expression. ✓ People who held hot coffee mugs in their hands were more likely to rate a fictitious person as warm and friendly than people who held iced coffee. ✓ People who read résumés attached to heavy clipboards were more likely to rate candidates as more qualified than when the résumés were attached to lighter clipboards. Emotions and body states are also deeply interconnected in human social perceptions and communication. One mechanism by which emotions are communicated and internalized in social interactions is through mimicry and imitation. Research has shown that mimicry of emotional gestures is an important element in empathy (the ability to infer the emotional states of others). Close study of facial expressions reveals that we’re better at interpreting emotions in others when we mimic the other people’s expressions on our own faces. For the most part, we aren’t aware that we’re doing this, because the mimicry happens outside conscious awareness. Recent neuroimaging studies have confirmed that this process of understanding emotions in others by simulating them in ourselves is accomplished by activating the same brain areas during observation that are activated when the emotions are induced directly. In other words, we literally feel another person’s pain by activating the pain processing centers of our own brains, even though we aren’t actually feeling pain at that moment. There is a broader lesson here: In addition to being a great prediction machine (as described in Chapter 5), the brain is also an excellent simulation machine. Our brains use simulation (mentally picturing a situation and then imagining how we would act in that situation) not just for understanding emotions in others, but also for understanding and anticipating all kinds of current and future situations. The idea that body states can change emotions is a little counterintuitive for most people, but we’re all familiar with the ability of emotions to change body states. Who hasn’t experienced “butterflies in the stomach” before a public presentation or “jumped out of a seat” while watching a scary movie? At a deeper level, emotional states, even nonconscious ones, trigger a wide variety of body-state changes. These changes are often measured to infer the presence of emotions in neuromarketing research. For example: ✓ Arousal is associated with increases in perspiration production, heart rate, and pupil size. ✓ Valence is associated with small (often unobservable) changes in facial muscles such as the frown muscle (corrugator supercilii in scientific

97

98

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer terms), which contracts during negative valence and relaxes during positive valence. ✓ Approach and avoidance reactions are often accompanied by literal approach or avoidance body movements, such as leaning forward or backward, or turning toward or away from the object of emotion.

What emotions are good for Emotions happen to us. They are not something we can prevent, and they can be extremely difficult to control. So, why have they survived as cognitive processes so distinctly a part of the human condition? The most likely explanation is that emotions exist because they fill two important survival needs: ✓ They alert us to situations with positive or negative outcome potentials, without requiring us to actually experience those outcomes. ✓ They force us to learn, because conscious emotional experiences, both positive and negative, are so important to our lives that we’re highly motivated to anticipate them and either seek or avoid them. According to Baumeister and colleagues, the purpose of conscious emotions is to command attention and stimulate learning. The purpose of automatic affective reactions (emotional markers), in contrast, is to provide direct input into immediate behavioral situations, often doing so well before conscious processing can even size up the situation and propose a conscious plan of action. Together, conscious and nonconscious emotions combine to keep us safe, satisfied, and effectively pursuing life-supporting goals. Emotions are intimately tied to consumer behavior, because so much of what triggers our emotions is related to the things we buy, the things we want, and the things we want to avoid. Liking (positive emotional valence) is enhanced by mechanisms such as familiarity and processing fluency. Experiencing emotional responses to products and brands stimulates and reinforces learning, which can then shape our responses to future experiences with those products and brands, creating habits and preferences that can last a lifetime. Emotions also have an important signaling function. Because we can empathize with our fellow humans, we’re very good at reading emotions in others. This helps us with social action, cooperation, and conflict management. In a consumer context, we see what products friends, family, acquaintances, and strangers like and don’t like, and this contributes to our own learning about those products. Learning from watching the emotional reactions of others is much more efficient and convenient than having to experience all those emotions ourselves. The rise of modern media has vastly expanded the potential

Chapter 6: The Central Role of Emotions in Consumer Responses for learning by observing others. But it also has created a buzzing confusion of mixed messages that complicates our choices and taxes our cognitivemiser minds. Finally, emotions provide an efficient shortcut to consumer decision making. Emotions trigger goals and activate approach or avoidance systems that guide and simplify our choices as consumers, often performing these functions completely outside our conscious awareness. To the extent that these shortcuts make evaluations and choices easier and faster, they allow consumers to bypass the route to purchase traditionally measured by market research — from attention, persuasion, and memorization to recall at the point of purchase. Instead, these shortcuts take advantage of the mental “express lane” to consumer choice that neuromarketing specializes in measuring — from vague sense of liking directly to the checkout counter.

Emotions and Attention We’ve called attention, emotion, and memory the three master variables of neuromarketing research (see Chapter 5). Of these three, emotion is most often in the driver’s seat, in that it naturally enhances both attention and memory. In this section, we describe the relationship between emotion and attention and discuss its significance for understanding consumer responses.

Aiming the spotlight of attention with emotional markers Emotion is not the only source of attention, but it is a reliable one. In a visual field of many objects, the one that is most emotionally relevant is likely to pull our attention toward it. This is an example of bottom-up attention, an involuntary shift in focus, as compared to top-down attention, in which we voluntarily choose to direct our attention to a particular object. It’s the difference between searching for your favorite brand of milk in the grocery store cooler, and having your attention drawn to a milk carton that has a distinct new shape you’ve never seen before. In either case, focusing attention represents a transition from nonconscious to conscious processing. It isn’t possible to pay attention without being aware that you’re paying attention. Emotional markers can trigger attention toward one object at the expense of other, less emotionally relevant objects. Because emotions are closely tied to motivations, nonconscious emotional reactions can often direct us toward aspects of our environment that can help us achieve our goals. This opens up the possibility of analysis and learning. Conversely, objects or information sources that fail to generate an emotional reaction are more likely to be ignored and forgotten.

99

100

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer Of the three dimensions of emotion, emotional valence tends to draw our attention to the familiar and the easy to process. A sense of familiarity, in turn, can be derived from actual or imagined experience. Research shows that our brains respond quite similarly to things that are truly familiar and things that are mistaken to be familiar. There’s a kind of feedback loop here: Familiarity induces liking, liking draws attention, and attention increases the sense of familiarity. In this way, we become more and more comfortable with a subset of things in our world that satisfy our needs, even though there may be many other alternatives that do the job just as well. Emotional arousal has an interesting relationship to attention. Like increasing valence, increasing arousal attracts attention, but it also narrows attention. As we become more emotionally aroused, we become better at filtering out distractions and focusing more intently on a specific object of attention. This only works up to a point, however. If arousal gets too high, attention begins to deteriorate and focus becomes more difficult. When people are under stress (a common form of arousal), for example, their ability to handle distractions declines. The universal lament of the harried parent — “Leave me alone, I need to concentrate!” — is a perfect example of this effect in action. Although emotions reliably trigger conscious attention, it does not follow that emotion is the only source of attention. As described in Chapter 5, novelty or expectancy violation (a mental reaction that occurs when you observe something your brain didn’t anticipate) is another common source of attention. Novelty draws attention even if it’s emotionally neutral. If it’s associated with emotion, it’s often associated with negative emotion, because humans take a naturally vigilant attitude toward things that are new and different. Because the properties and effects of a novel item or situation are unknown, we tend to approach it with some degree of caution, which translates into negative emotional valence, at least until the item or situation becomes more familiar.

Seeing why attention sometimes isn’t so good for marketers A major marketing area where emotion and attention intersect is advertising. Here, research has tended to go down two somewhat contradictory paths. One approach to traditional ad testing emphasizes the value of attention as an element of advertising effectiveness. The more people pay attention to an ad, the more likely they are to remember it, and the more effective it’s considered to be. This is often called the high attention processing model of advertising effectiveness. It’s closely associated with the rational consumer model we describe in Chapter 2. A second approach argues that attention is actually bad for advertising in some circumstances (such as TV ads) and for some purposes (such as brandbuilding), because the more people pay attention to an ad, the more likely

Chapter 6: The Central Role of Emotions in Consumer Responses they are to create mental counterarguments to the persuasive messaging in the ad and, therefore, develop resistance to the message. According to this view, successful ads work not because they grab attention and persuade logically, but because they generate positive emotional responses that get associated with the brand or product through simple repetition. High attention to the advertising itself doesn’t help this process and may actually interfere with it. So, low attention, combined with positive emotional associations, is seen as preferable. This is called the low attention processing model of advertising effectiveness. Advertising researchers have been arguing about this question for years. Neuromarketing measures can help resolve this debate. There is a fair amount of evidence that people do implicitly resist persuasive messages (discussed in Chapter 5). In addition, the high attention processing model doesn’t tap into nonconscious ways in which an ad might influence brand attitudes and buying behavior, because it’s based on measuring conscious, self-reported responses using traditional research methods like interviews and surveys. So, we know it’s based on an incomplete picture of relevant brain processes. Findings from modern brain science about nonconscious processes like priming, familiarity, processing fluency, and emotional markers do provide a rich source of new models for testing these two approaches. Given the centrality of both conscious and nonconscious emotions in consumer responses, it seems likely that high positive emotion, rather than either high or low attention, will be found to be the key to advertising effectiveness.

Emotions and Memory Many studies have confirmed that emotionally charged events are better remembered than neutral events, especially if the emotion triggered by the event matches the emotional state of the observer at the moment. Both negative and positive emotions appear to enhance memory. This effect has been observed even among people who normally have memory deficiencies, such as Alzheimer’s patients.

Emotions make memories memorable Emotions not only improve memory, but also focus memory. Brain scientists believe both these effects are related to the roles played by emotion as an alerting and learning mechanism.

101

102

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Supporting this view, studies of the details of learning from emotional episodes show that memories are enhanced only for information that is related to the cause of the emotional episode, but not for unrelated peripheral information. In one study, people were shown an image of a woman bicyclist lying on the ground, bleeding from a head injury. People were better able to remember details about the woman, such as the color of her coat, than they were able to remember extraneous details, such as the color of a nearby car. This result makes sense from an evolutionary point of view. Enhanced memory for information relevant to the emotional core of an episode is more likely to be helpful than peripheral information, if a similar situation occurs later on. Most people are familiar with the idea of flashbulb memories. These are memories of a particularly emotional event (such as the 9/11 terrorist attacks or the Challenger explosion) that feel burned into our brains with photographic accuracy. These are almost always negative emotional events, accompanied by a high degree of surprise or shock. Forward-thinking scientists have recorded people’s accounts of their activities and feelings in the immediate aftermath of such events. Then, after a lapse of one year, three years, or even ten years, they’ve interviewed those people again and recorded their recollections. The results are surprisingly consistent. Although people have unshakable certainty about the accuracy of their memories of these events, in most instances, those memories are incorrect. For all kinds of details — where they were, who they were with, what they did, when they did it — their memories deviate significantly from their original accounts. What’s interesting about these results isn’t so much that the memories are flawed, but that people are so certain that those flawed memories are correct. This highlights an extremely important feature of human memory — one that applies even to vividly recalled memories that are deeply imbued with emotional content. Memories are constantly changing, and even the act of remembering changes the content of our memories.

How we remember memories Psychologists at two New York universities performed an intriguing study to better understand why memories of events like 9/11 tend to diverge over time. First, they had a group of participants record their memories of events on that day. Then, each participant was matched up with another participant who had similar experiences, and each pair discussed their memories of 9/11. The researchers found that when one of the participants discussed a particular detail of his or her day, both participants would be better able to recall that detail later on. But if a detail was not discussed, it became harder to remember. In particular, memories that were closely related to the ones mentioned in the conversation became the most difficult for both the speaker

Chapter 6: The Central Role of Emotions in Consumer Responses and the listener to access. Over time, those memories were more likely to be forgotten. What seemed to be occurring was a kind of collective forgetting based on an experience of shared remembering. In other words, the act of discussing a memory — even a vivid one like where you were and what you were doing on 9/11 — can have the effect of changing that memory, making some details more accessible and other details less accessible. If the memory is discussed many times with many people, the overall effect may be the replacement of the original memory with a kind of shared but distorted memory. This experiment illustrates a more general, and generally misunderstood, characteristic of human memory: Our memories are continually constructed and reconstructed; they’re never saved intact. Many people’s common-sense view of memory is that it operates like a kitchen cabinet. Memories are like dinner plates that are stored in the cabinet. Later on, when we want to retrieve them, we open the cabinet and grab the plates. Of course, we imagine them to be the same plates, because the cabinet is just a passive container. But human memory doesn’t work like this “memory cabinet.” A better (and more modern) analogy is offered by Leonard Mlodinow in his book Subliminal: How Your Unconscious Mind Rules Your Behavior (Pantheon): Memories are like photos stored on a computer hard disk. Because raw images take up too much space, they aren’t stored verbatim. Instead, algorithms are used to save them in a highly compressed format that includes only certain key aspects of the original image. When they’re retrieved, they’re slightly different from what was stored. Even this analogy breaks down for human memory, though, because we scramble our memories even more. Every time we remember a memory, the memory we retrieve is partial and incomplete, and our nonconscious fills in the missing pieces with plausible substitutes, which then get mixed in with the original memory. The result is a constantly changing impression of what we think we did. Ironically, the best way to keep a memory intact is to never remember it! The fallibility of human memory is well documented. For example, in the legal realm, mistaken eyewitness testimony is the leading cause of wrongful convictions, as later determined by DNA-based reversals. In psychology labs, scientists have successfully induced almost any kind of false memory in their unsuspecting experimental subjects, including convincing 62 percent of participants in one study that they had shaken hands with Bugs Bunny when they visited Disneyland as a child (which is impossible, because Bugs Bunny is a Warner Bros. character, not a Disney character, so Bugs isn’t at Disneyland).

103

104

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

As summarized by Mlodinow, human memory research has reached three major conclusions: ✓ People have a good memory for the general gist of events but a bad one for the details.

✓ When pressed for the unremembered details, even well-intentioned people making a sincere effort to be accurate will inadvertently fill in the gaps by making things up. ✓ People will believe the memories they make up. These findings have clear implications for both traditional market researchers and neuromarketers. Relying on consumer self-reports to tell you what people have done in the past is a highly risky technique. Even using sophisticated nonverbal neuromarketing techniques, it’s important to remind yourself that a measure of memory activation (such as a brain-wave measure) is simply an indication that memory processes are taking place in the brain. It tells you nothing about the content of that memory, including whether it accurately captures the object or situation remembered.

Memory and emotional markers Emotional markers enhance memory activation. The stronger the emotional reaction, the stronger the memory. But what is remembered is not a perfect recording of the experience. It’s a highly selective memory that leaves out many details. These details are seamlessly filled in later by the nonconscious when the memory is recalled. We’re very poor at separating what was part of the original memory from what was added at recall time, so our conscious awareness of our past is partial and distorted. This would be a crazy way to build a memory system if the purpose of the system were to remember the past perfectly, like a flawless human video recorder. But this isn’t the purpose, which leads us to our most important point about memory: Human memory didn’t evolve for perfect remembering; it evolved for acting and surviving in an uncertain world. Survival necessarily depends on being able to tell the difference between what’s important and what isn’t. It doesn’t depend on remembering everything. So, our brains operate on the basis of a trade-off: Emotion-enhanced memory provides a very good system for identifying and learning from the important episodes in our lives — positive and negative, rewarding and threatening — but it also ignores a lot of other information in the process. This is particularly relevant to the world of marketing and consumer behavior. Emotion and memory operate together as ingredients in consumer responses to marketing messages, brands, and products. Sometimes they operate at a conscious level; more often they operate at a nonconscious level. At both levels, they help us navigate our way through a massive amount of information every day. But much of this process is not accessible to our conscious minds, so we can’t report reliably on it if asked.

Chapter 7

New Understandings of Consumer Goals and Motivation In This Chapter ▶ Understanding the new science of motivation ▶ Seeing how nonconscious goals guide behavior ▶ Examining implications for marketers and consumers ▶ Putting together a new view of how consumers shop and buy

E

very human being knows what it feels like to have a goal. Unless you just flipped randomly to this page, you’re probably operating under a conscious goal right now: getting through this chapter! Goals are the motivational drivers behind decisions and actions and are extremely important to marketing and neuromarketing, because they’re the mechanisms by which we connect our perceptions, emotions, and preferences for brands and products to our choices and behavior as consumers. In this chapter, we look at the exciting and surprising new science of goals and motivation. We explain how people regularly have nonconscious goals that they aren’t aware of; how these goals are activated, pursued, and either achieved or not achieved; what happens after successful or unsuccessful goal pursuit; and how all this relates to neuromarketing.

Looking at How Goals Drive Us In social psychology, a goal is defined as a mental representation of a desired end-state, combined with some degree of knowledge (accurate or inaccurate) about how to attain that state. In other words, a goal is something you want to achieve plus some kind of plan you have for getting there.

106

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer Goals operate at all levels in our lives, from the immediate and fleeting goal of scratching an itch to the lifelong goal of leading a productive and meaningful life. Some goals are associated with acquisition and consumption, which are of great interest to marketers. Advertising and marketing communications in general are basically efforts to persuade us to have particular goals and not have others. How human beings actually acquire goals, and what they do once they’re under the influence of a goal, is a subject that has enjoyed increasing interest in the academic world in recent years among both neuroscientists and social psychologists. This research has developed in such unexpected directions that it isn’t an exaggeration to talk about the emergence of a new science of motivation over the last two decades.

The new science of motivation One thing would seem to be self-evident about goals: You can’t have a goal if you don’t know you have it. But this, like many self-evident statements, turns out to be wrong. Until recently, most scientists believed that goals resided completely in the domain of the conscious mind. And much has been learned about conscious goals, including the brain structures and chemical reactions that underlie conscious goal activation, pursuit, and achievement. Recent work in social psychology, however, following the lead of psychologists like John Bargh at Yale and Tanya Chartrand at Duke, has revealed a previously hidden facet of goals and motivation. These scientists and their colleagues have shown that goals can be activated, pursued, and even achieved, completely outside our conscious awareness. In addition, they’ve discovered that these automatic and nonconscious motivational processes can have significant impacts beyond the goal itself, invisibly influencing our moods, judgments, and later behaviors. Meanwhile, recent work in cognitive neuroscience has confirmed that the parts of the brain that get activated when we consciously monitor and control our pursuit of goals is different from the parts that actually run the goal pursuit “program” itself. Brain scientists call this dissociation (the separation of what appears to be a single brain function into separate component functions). When dissociation is present, the parts may operate independently. This is what happens with goal pursuit — the processes our brains use to pursue goals can operate without involvement of the processes our brains use to consciously monitor goals. The goal system can, amazingly, run on its own, completely outside our conscious awareness. The mechanism by which goals get activated without conscious awareness is referred to as priming (introduced in Chapter 5). Priming depends on associative activation (the mechanism by which activating one idea or concept in

Chapter 7: New Understandings of Consumer Goals and Motivation our minds triggers other ideas and concepts that are “close by” in memory). Hearing the word taxi in a story, for example, activates related concepts, like how you pay for a taxi ride. If you’re then asked to spell the word fair, you’ll be more likely to spell it fare because of the priming effect of the concept taxi (even though fair appears much more frequently in English-language conversation and writings).

Conscious and nonconscious goals Goals can be distinguished from other mental states, such as preferences or feelings, by a set of predictable behaviors that are unique to them. ✓ Goals operate over extended periods of time. ✓ Goals persist in the face of obstacles. ✓ If interrupted, we resume pursuing a goal at the first opportunity, even if intrinsically more attractive activities are available to us. ✓ The strength of goal motivation increases over time until fulfilled. ✓ Once fulfilled, goal motivation disappears rapidly. ✓ The outcome of goal pursuit, whether success or failure in reaching the goal, can change our mood and our behavior after the fact. Conscious goals are simply goals we’re aware we have. We deliberate and create strategies for our goal pursuit plans. We evaluate our progress and devise words and actions that we hope will get us closer to our goals. Behaviorally, all these activities are driven by motivation. We experience motivation to achieve goals, and we engage in behaviors to satisfy those motivations. The most surprising finding from nonconscious goal research is not that we can, in fact, pursue goals without knowing it, but that we do so with exactly the same set of accompanying behaviors that are observed in conscious goal pursuit. Nonconscious goals operate over time, persist in the face of obstacles, are quickly resumed when interrupted, increase in strength over time, disappear rapidly once fulfilled, and impact later moods and behavior, just like conscious goals. Brain scientists explain the similarity between conscious and nonconscious goal pursuit in terms of evolutionary development. Because nonconscious goals and motivations were built into animal brains long before the advent of human beings and self-consciousness, the behavioral patterns that accompany goal pursuit, all of which increase the likelihood of goal achievement, must have been built in as well. When newer parts of the brain evolved on top of the old brain and consciousness emerged, conscious goal pursuit

107

108

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer simply made use of these pre-existing mechanisms and added the elements of conscious deliberation and planning on top of them. So, from the perspective of brain science, it’s not nonconscious goal pursuit that’s mimicking conscious goal pursuit, but the other way around. Nonconscious goal pursuit mechanisms established all these behavioral connections a long time ago in evolutionary time, and conscious goal pursuit just plugged into that existing machinery later on, enhancing and extending it with a new layer of conscious awareness and control.

Goals and behavior The process of goal pursuit, whether conscious or nonconscious, occurs in four phases:

1. The goal is triggered, either voluntarily (conscious goal pursuit) or by an external cue in the environment (nonconscious goal pursuit).



2. Internal information processing systems are activated to guide pursuit of the goal.



3. Behavioral responses occur.



4. Consequences follow. Conscious goal pursuit includes conscious awareness and monitoring of each of these phases, but in all other respects conscious and nonconscious goal pursuit operate the same. Priming is the mechanism by which external cues in our environments can trigger responses in the absence of conscious awareness. In Chapter 5, we introduce the two main types of priming:

✓ Associative priming: The cognitive mechanism by which thinking about one idea or concept makes it easier to access other ideas and concepts that are closely related in memory. Our example of the concept taxi priming the word fare over fair is an illustration of associative priming. ✓ Motivational priming: The mechanism by which goals are activated. Instead of just triggering a connection between concepts in memory, a motivational prime triggers a cascading sequence of goal pursuit processes that will remain active until the goal is either reached or given up. Motivational priming can be thought of as “associative priming plus.” It is based on associations, but triggers goals in addition to ideas and concepts. Associative priming has impacts on behavior, but its effects are relatively weak and short-lived, and they decrease rapidly over time. Motivational

Chapter 7: New Understandings of Consumer Goals and Motivation priming has much stronger, longer-lived, and persistent effects; most important, it has a much greater impact on behavior. In the world of marketing and consumer behavior, motivational priming is where a large amount of neuromarketing research is focusing today. In early lab experiments on nonconscious goal pursuit, priming was usually accomplished by exposing people to words or phrases that triggered the associations researchers wanted to test. For example, participants might be asked to complete a scrambled-sentence test, in which they unscramble a short list of words to create a grammatically correct sentence. Unknown to the participants, the words included in the sentences are chosen to prime particular associations or goals, such as old age (bingo, Florida, retire), thriftiness (tight-fisted, prudent, penny), or luxury (prestige, expensive, impress). These techniques work well and are included in the toolkits of many neuromarketing vendors today (see Chapters 16 and 17). But a lab is neither a living room nor a grocery store aisle, so more recent research has focused less on artificial priming triggers and more on naturally occurring triggers. Researchers have identified several types of primes that appear to be particularly good at triggering goal pursuit in natural settings. Here are some of the most important (summarized with a few modifications from a 2007 review by Chartrand and colleagues titled “The Antecedents and Consequences of Nonconscious Goal Pursuit”): ✓ Social situations:

• Social situational triggers: Social situations that are encountered repeatedly and consistently can trigger motivational goals. Often these situations have shared cultural meanings, such as workplaces and home settings, and can reliably activate similar goals across individuals.



• Ego threats: When a social situation is perceived as threatening to an individual’s self-esteem or self-interest, it can trigger automatic goal activation aimed at enhancing or maintaining sense of self.



• Temptations: A temptation can automatically activate competing goals that counter the temptation. This is an example of a nonconscious goal acting in a defensive or protective way to oppose behaviors we consider to be dangerous, harmful, or inappropriate.



• Individual differences in social situations: People have different propensities toward many goals. These differences can make some people more susceptible to some types of priming than others. For example, one study found that priming concepts related to power elicited social responsibility goals in more community-oriented people and self-interest goals in more individualistic people.

109

110

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer ✓ People:

• Goal contagion: Seeing another person pursuing a goal is often enough to trigger the same goal in you. In effect, one person can nonconsciously “catch” a goal from another person, even if the second person’s goal is only implied or imagined.



• Stereotype activation and resistance: When confronted with a situation associated with a stereotyped group, people with strong egalitarian beliefs have a tendency to preconsciously inhibit related stereotypes, while people less devoted to egalitarianism show signs of stereotype activation.



• Significant others: One of the most powerful goal-priming effects occurs when thoughts of significant others in a person’s life (mother, father, friend) are activated by priming. Studies have found, for example, that activating thoughts of a friend can trigger a goal to be helpful, and activating thoughts of a demanding father can trigger a goal to achieve.

✓ Objects and messages:

• Personally meaningful objects and marks: Several recent studies have begun looking at the extent to which brands, logos, and marketing slogans can act as goal primes. These studies have reached some fascinating conclusions, suggesting that brands can represent and trigger aspirational goals, even when encountered very peripherally, in much the same way people do. For instance, exposure to the Apple logo has been found to motivate creativity goals, exposure to the Disney logo can motivate honesty goals, and exposure to the Walmart logo can motivate thriftiness goals. (We examine the Apple creativity study in more detail in Chapter 9.)

✓ Social norms:

• Socially triggered rules: Finally, researchers have explored social norms as triggers of nonconscious goal pursuit. In one study, people were exposed to a picture of a library or a train station, and told they would be visiting that location after the experiment was over. In a supposedly unrelated task that involved reading out loud, people exposed to the library prime spoke in softer voices than people exposed to the train station prime. This study suggests that simply invoking a situation in which the norm would be appropriate can activate normative behavior. The breadth of these sources of goal priming leads to the inescapable conclusion that goal priming must be occurring at almost every moment of every day. Until now, this major source of consumer choices and behavior has been invisible to market researchers. With the advent of neuromarketing, it can now be explored in depth, and its implications can be probed for both marketers and consumers.

Chapter 7: New Understandings of Consumer Goals and Motivation

Having Goals We’re Not Aware Of Nonconscious goal pursuit fits in comfortably with other features of nonconscious processing we’ve highlighted, such as cognitive efficiency, familiarity, and processing fluency (in Chapter 5), and nonconscious emotional markers (in Chapter 6). It’s another mechanism in the human repertoire of automatic processes that keep us operating safely and productively, moment-tomoment, without overwhelming our relatively limited conscious processing capabilities. In this section, we look at what nonconscious goal pursuit means for our understanding of marketing and consumer behavior, and what implications it has for both marketers and consumers.

Operating under the influence of nonconscious goals Nonconscious goal pursuit presents a very different picture of how consumers go about their day-to-day business of acquiring and consuming products and services. Instead of deliberating and making cost-benefit calculations like the rational consumer model would contend, they act much more like our intuitive consumer model, paying very little attention to what they’re doing and outsourcing most of their calculations to mental processes they don’t even know exist. People’s reliance on nonconscious goal pursuit does not make them less sensitive to their immediate circumstances, like a person in a hypnotic trance. It actually makes them more sensitive, because they’re acting out a process that’s relentless in its focus and flexible in its means. All the associated behaviors of goal pursuit we’ve described — persistence in the fact of obstacles, resumption after interruption, increasing motivational strength over time, and so on — help people to navigate flexibly toward their goals even as their immediate circumstances change. Our nonconscious minds are much less susceptible to distraction than our conscious minds are. When you begin understanding the mechanics of nonconscious goal pursuit, many previously mysterious behaviors start to make sense. Where did that urge for a bowl of ice cream come from while watching TV last night? If you think back, you may recall that you saw an ad earlier in the evening for a very tasty-looking pizza. That image may have triggered an eating goal, which your brain resolved by aiming you toward ice cream, because ice cream was a lot more accessible than pizza. Note that this process wasn’t very logical — ice cream is not pizza. But the nonconscious mind doesn’t do logic very well — logic is something we hand off to our conscious minds. Without much

111

112

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer conscious thinking involved, a bowl of ice cream does quite nicely for extinguishing an eating goal triggered by a slice of pizza. It’s through processes like this that most of our day-to-day consumption decisions are made. Consumer behavior is commonly viewed, by both market researchers and consumers themselves, as a goal-directed activity. Shopping has a purpose. In the most general sense, this purpose is to close a gap between what we have and what we need. Most consumers believe they’re conscious of all the goals they’re pursuing when they shop. If you told them they were often under the sway of nonconscious goals, they would think you were nuts. So, an important question is the extent to which nonconscious goal pursuit can be connected directly to the key processes of consumer behavior: preferences for products and brands, consumer choice, and shopping behavior.

Nonconscious goals can impact product preferences Studies have consistently shown that product preferences can be significantly changed under the influence of different activated goals. For example, activating goals of “thrift” or “prestige” can shift preferences substantially between thrift-oriented and prestige-oriented products in categories as different as socks and microwaves. The ease with which preferences can be manipulated by the most indirect of primes has caused some researchers to question whether preferences are really as stable and long-lived as most consumers (and market researchers) believe they are.

Nonconscious goals can impact product choice In another study that primed thrift and prestige goals (Chartrand and colleagues, “Nonconscious Goals and Consumer Choice,” 2008), consumers were asked to make real choices, not just express preferences. Following a nonconscious goal-priming exercise, consumers were offered a choice between lowend and high-end options in three categories: sports socks, apartments, and sound systems. In each case, the priming shifted choices by as much as 40 percent in the direction of the option most aligned with the primed goal. This study also showed a particularly striking example of the “primed goals get stronger over time” principle. Consumers in one group were allowed to make their product choices three minutes after being primed, while consumers in a second group were forced to wait eight minutes before making their choices. In the quick choice condition, 59 percent of the consumers chose the primed option, but in the delayed choice condition, 70 percent chose the primed option. So, a simple five-minute delay produced an additional 11 percent shift toward the primed alternative.

Chapter 7: New Understandings of Consumer Goals and Motivation Nonconscious goals can impact shopping behavior An important characteristic of motivational primes is that they can be quite unobtrusive, even subliminal (presented below the threshold of conscious awareness), and still have an impact on consumer behavior. Researchers have studied the effects of nonconscious goal priming on shopping intentions and behavior. One study (also discussed in Chapter 5) found a reverse priming effect on shopping intentions. After consumers had been exposed to “high-end” retail store logos as primes, they expressed an intention to spend more in an upcoming shopping trip. But when they were exposed to the slogans of those stores, the priming effect reversed, and they expressed an intention to spend less in an upcoming shopping trip. The researchers attributed this effect to the activation of a correction goal in the shoppers’ nonconscious minds; that is, they activated a goal to counter the influence of persuasive messaging, even as subtle a persuasive message as a simple slogan. Consider how a grocery store may use goal priming to stimulate more shopping for higher-margin “luxury” food brands, as compared to more generic or discount brands. A traditional in-store marketing strategy may be to set up a separate section in the store with lots of signage of happy, upscale consumers enjoyed the delicious fancy foods in exotic settings, combined with extra marketing copy to explain exactly why these foods are so special. In contrast, a strategy aimed at leveraging nonconscious goal pursuit may emphasize signage to activate a more general goal of “luxury” or “selfindulgence.” These images would probably not include the food items themselves, because that may prompt the shopper to activate a corrective “counter-persuasion” goal, which would inhibit the priming effect. The idea of a special section may be retained, but the section would be placed toward the back of the store, and the images would be placed toward the entrance, to provide an appropriate delay period between priming and prime satisfaction with the luxury food items. Written copy would be de-emphasized, because reading tends to trigger conscious, evaluative thinking, which may in turn trigger counterarguments. Also, the aisle path between the priming images and the special luxury food section would need to be carefully purged of other luxury items that may attract the primed shopper and satisfy the primed goal before the shopper actually reaches the special section. This would be responsive to the “once fulfilled, goal motivations disappear rapidly” principle of nonconscious goal pursuit.

Implications of nonconscious goals The reality of nonconscious goals and goal pursuit creates interesting challenges and questions for both marketers and consumers. We describe a few of these issues here.

113

114

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer For marketers Your consumers appear to be influenced in ways quite different from the direct persuasion model you grew up with. You can’t simply ask them about these influences, because they aren’t aware of them. Nonconscious goal pursuit is adaptive and flexible. Consumers in pursuit of a nonconscious goal are persistent and motivated to succeed, even though they aren’t aware of what they’re doing. If you understand the goals your consumers are pursuing, and connect your product to the satisfaction of those goals, your consumers will find a way to get to your products. Consumers may have built-in resistance to persuasive messages, even very subtle ones like slogans, that can produce reverse priming effects. This means your hard-earned advertising and marketing dollars may be producing the opposite effect to the one you’re trying to create. Are your marketing messages speaking to your consumers’ conscious minds but creating resistance in their nonconscious minds? Your advertising can function as a nonconscious prime. Priming is not necessarily logical, so exposure to your advertising may activate goals you never intended. What goals and behaviors does it prime? What goals and behaviors does your competitors’ advertising prime? Brands can act as primes and trigger nonconscious goal pursuit. Apple primes creativity. Disney primes honesty. People respond nonconsciously to brands in many of the same ways they respond to people. What goals and behaviors does your brand prime? What goals and behaviors do your competitors’ brands prime?

For consumers Learning that you pursue goals nonconsciously may be a little disturbing. All the latest brain science says your nonconscious goal seeking is generally good for you — that it steers you toward satisfying your basic wants and needs and away from things that are bad for you. But you still wonder: What can you do if your nonconscious goal pursuit is motivating you in directions your conscious brain doesn’t want to go? We’ve seen that nonconscious goal priming doesn’t work unless two conditions are met: ✓ You must have a positive feeling toward the goal being primed. If the goal does not appeal to you, it can’t be primed. Priming for cigarette smoking, for example, won’t work on you if you find smoking disgusting. ✓ You must feel a real need to satisfy the primed goal. If you don’t feel a gap between your current state and the state at which achieving the goal would get you, you can’t be primed to pursue that goal.

Chapter 7: New Understandings of Consumer Goals and Motivation

You can consciously control either of these conditions, although the second is probably easier to control than the first. For example, if you realize that exposure to Nordstrom may be triggering a “go ahead and be extravagant” nonconscious goal, but your conscious brain knows your checking account can’t afford it, you can satisfy that goal by buying a much smaller “extravagant” item, like a $10 cappuccino at a trendy coffeehouse. Your nonconscious brain will be satisfied — mission accomplished! And you’ll no longer be driven by that impulse to spend $3,000 on a new suit at Nordstrom. Another implication of nonconscious goals for consumers is the fact that failing to achieve a nonconscious goal can have consequences for how you feel and how you act. This may seem unfair, but studies show that when you fail to achieve a goal you didn’t even know you were pursuing, you feel bad. Because you aren’t aware of the source, you experience this feeling as a mystery mood, a general negative feeling to which you can’t assign a specific cause. Researchers have found that mystery moods are caused by lowered selfesteem, which tends to follow from failure to achieve a nonconscious goal. This, in turn, triggers another nonconscious goal to raise self-esteem, which can be met by engaging in some kind of self-enhancing activity. The implication for consumers is that if you find yourself in an unexplained bad mood after a shopping experience, you don’t need to engage in more shopping to lift that mood. Just do something that makes you feel better about yourself.

Consumer Motivation, Goal Seeking, and Goal Attainment In this section, we summarize how the new science of motivation and nonconscious goal pursuit changes our understanding of consumer behavior and adds to our emerging picture of the intuitive consumer.

Approach and avoidance in the shopping aisle Nonconscious goal pursuit makes use of all the nonconscious mechanisms discussed in previous chapters — efficiency, novelty, familiarity, processing fluency, priming, and emotional markers. Together, these mechanisms combine to define and guide us toward our goals. As we discuss in the next chapter, they take us right up to the doorstep of decision and start knocking on the door. With so many nonconscious forces already arrayed and exerting their influence, it shouldn’t come as a surprise to learn that our decisions are often a foregone conclusion. But let’s save that discussion for Chapter 9.

115

116

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer For now, we want to ask a different question: How does nonconscious goal pursuit translate into a propensity to act? What are the outcome states, the feelings or impulses that guide behavior that goal pursuit leaves us with? The answer takes us back to our discussion of emotions in Chapter 6: It’s the feeling that something should be approached or avoided. Approach and avoidance are the two directions of the motivational dimension of emotion. They have quite literal behavioral expressions: Approach motivation makes us want to move toward something; avoidance motivation makes us want to move away from something. They’re very embodied (related to bodily movements) action directives, as we explain in Chapter 6. In the shopping aisle, all the mechanisms we describe come together to produce a motivation to approach or avoid. This effect is quite different in magnitude from the extremes of approach and avoidance that you may experience in your life. Avoidance in the shopping aisle is minuscule when compared to avoidance when facing a hungry tiger. But the brain mechanisms at work are the same. Will you reach out and grab that bottle of detergent, or will you hold it for a second, look at it, and put it back on the shelf? A recent shopping study by neuromarketing vendor Sands Research looked at this question using electroencephalography (EEG), a technology that measures electrical activity in the brain, and eye tracking, a technology that tracks eye gaze patterns. EEG is a good technology for looking at approachavoidance responses because it can measure a well-documented association between approach-avoidance motivation and EEG-measured brain-wave patterns (more on this in Chapter 16). The researchers collected about 18,000 cases of people fixing their gaze on a product on a real grocery store shelf. In about 80 percent of those cases, the shoppers did not buy the product, but in 20 percent of the cases, they did. Analyzing the EEG reactions following those initial gaze fixations, the researchers found that the best predictor of whether the product would end up in the shopping cart was the magnitude and direction of the EEG measure of approach-avoidance at a precise moment in time, about 200 milliseconds (that’s two-tenths of a second) after that first gaze. If the brain was signaling approach at that moment, the item had a high likelihood of ending up in the shopping cart. If the brain was signaling avoidance, the item would most likely remain on the shelf. This finding, which replicates similar results in academic research, illustrates how quickly and how strongly nonconscious forces can motivate a consumer toward a decision. Understanding the nonconscious dynamics that lead to results like this is a first step toward building a more powerful, more predictive model of the intuitive consumer.

Chapter 7: New Understandings of Consumer Goals and Motivation

Motivation and the intuitive consumer The intuitive consumer, unlike the imagined rational consumer who is the foundation for most traditional market research, spends very little time consciously deliberating about products and brands. Asking the intuitive consumer why he buys the things he buys, or why she behaves the way she does, will elicit no shortage of sincere responses, but those responses will have little relevance to the actual nonconscious drivers and motivations that underlie consumer behavior and choice. Even though the intuitive consumer is a master of mental efficiency, motivation is a finite resource. This has important implications for the consequences of motivated behavior. A substantial body of evidence has demonstrated that conscious goal pursuit depletes willpower, the common name for the “fuel” that drives motivated behavior. If you expend mental energy to regulate your behavior in the pursuit of a goal, you’ll have less willpower left to apply to the next goal you want to pursue. For example, if you’re asked to suppress your emotions during a funny movie (in other words, not laugh), you’ll be less able to resist a sugary snack after the movie. Recent studies have extended this finding to nonconscious goal pursuit. Although pursuing nonconscious goals expends less willpower than pursuing conscious goals, there is still a price to pay in terms of willpower depletion. This has implications for both marketers and consumers. The nonconscious mind has vastly greater capacity than the conscious mind, but even its capacity is limited. A consumer bombarded by motivational primes and overwhelmed by nonconscious goals can quickly become an exhausted and demotivated consumer, and have no idea why. This can lead to mystery moods (see “For consumers,” earlier in this chapter), as well as other negative consequences, such as declining performance on unrelated tasks that require concentration or self-control to complete. A final point we want to briefly touch on is the relationship between motivations and habits. Not all consumer behavior stems from either conscious or nonconscious goal pursuit. Much consumer behavior is simply habitual, like buying a bucket of popcorn every time you go to the movies. Habits arise from repetition, usually developed when a regularly occurring situation (location, time of day) consistently cues a particular behavior. Although the behavior may initially come from conscious or nonconscious goal pursuit, over time its performance becomes automatic. From that point on, the situational cue alone can trigger the automatic response, and the behavior is carried out with little or no conscious awareness. Like nonconscious goal pursuit, habits activate behavior through nonconscious processes, but unlike nonconscious motivational processes, they don’t require supporting goals or intention.

117

118

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer Habits are much less adaptive and flexible than nonconscious motivated behaviors. Nonconscious goals, as we’ve seen, can be pursued along multiple paths and can be satisfied by different outcomes. Habits are much more rigid and are characterized by the exact same outcome occurring every time. Because of this rigidity, habits can become disconnected from the goals they originally supported.

Beyond the buying brain: Other goals marketers care about As you see in this and previous chapters, the intuitive consumer may not be the rational, self-aware, articulate person marketers would like him to be, but he isn’t a “zombie consumer” either. The intuitive consumer uses nonconscious but sophisticated behavioral guidance systems to navigate successfully in the world of advertising, marketing, brands, products, and shopping. Understanding how these systems work can provide marketers with some new goals of their own. The purpose of marketing is not just to activate the “buying brain.” Here are some other goals marketers may want to activate to influence and communicate effectively to the intuitive consumer: ✓ To pay explicit attention ✓ To activate conscious thinking ✓ To pursue a different goal ✓ To communicate to others ✓ To give or to share ✓ To start doing something new ✓ To stop doing something old or to break a habit ✓ To make a new mental connection ✓ To feel something is familiar ✓ To look at something from a different perspective ✓ To choose differently In the next chapter, we take a detailed look at this last behavior — how consumers decide.

Chapter 8

Why We Buy the Things We Buy In This Chapter ▶ Summarizing how nonconscious processes impact consumer decision making ▶ Digging deeper into how System 1 and System 2 thinking contribute to consumer choice ▶ Understanding the differences between explicit and implicit decision making ▶ Clarifying why consumers may not be rational but can still be predictable ▶ Introducing judgment heuristics as an important nonconscious source of consumer

decisions

▶ Explaining why persuasion often fails to play its expected role in influencing consumer

choices

U

p to this point in Part II, we’ve been constructing the background of brain science facts and findings that we need in order to answer the two big questions at the heart of neuromarketing: How do consumers decide what to buy? And why do we need neuromarketing to understand these decisions? In this chapter, we answer these questions by, first, taking a deeper dive into Daniel Kahneman’s System 1 and System 2 models, with a specific focus on the very different ways these two systems operate in decision making. Then we look at two types of decisions — explicit and implicit — and examine their relative importance for consumer choice. Next, we introduce judgment heuristics (shortcuts and biases built into human decision-making systems), and show how these elements make consumer decisions both less rational and more predictable than previously realized. Finally, we take a fresh look at the topic of persuasion, and consider how all these new insights about decision making change our understanding of the role of persuasion in consumer choice.

120

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

How People Make Decisions Decision making is the great mystery of human behavior. Every decision is a choice that, in principle, could have gone differently. It’s a fork in the road of behavior. Standing before that choice, you can choose to go one way or the other, but after you’ve chosen, you can’t go back. Every human being knows what it feels like to make a decision. But what we generally don’t realize is why we make the choices we make. We’re very poor at identifying the sources of our decisions, especially when they’re the everyday choices we continually make as consumers. The mystery of decision making drives market researchers nuts. A consumer stands at the shelf in the grocery store, and chooses to put product A in her shopping cart instead of product B. Why did she make that choice? Until recently, the only one way a researcher could answer that question was to ask the consumer directly. Market researchers used to believe that consumer decisions were based on rational calculations using available information to balance costs and benefits. According to this rational consumer model (introduced in Chapter 2), this is how consumers are supposed to make decisions. And sometimes they do make decisions that appear rational and logical, so the model sometimes works. But much of the time, consumers don’t act rationally and logically. They consistently make decisions that violate all the expectations of the rational consumer model. Modern brain science shows why this is the case. As we explain over the last three chapters, human brains don’t operate the way we used to think they do: ✓ Our conscious brains are lazy controllers of our nonconscious minds, preferring fast, efficient, and easy solutions to deep deliberation. ✓ We’re naturally curious and drawn to novelty, but we don’t quite trust it. ✓ We do trust familiarity and make many of our decisions based on what’s most familiar. ✓ We like things that are easy to process, to such an extent that we often mistake processing fluency for inherent goodness, truth, persuasiveness, safety, and likeability. ✓ Our thinking is highly reliant on a process called priming, which links one idea to another both consciously and nonconsciously, and has a large impact on our chain of thought and reactions to the world around us. ✓ Our judgments and preferences are highly influenced by emotional markers that operate largely below our conscious awareness and have significant impacts on what we notice and what we remember.

Chapter 8: Why We Buy the Things We Buy ✓ We’re often motivated by goals we aren’t aware that we’re pursuing, the success or failure of which affects our moods and performances in ways that are inaccessible to us. ✓ Much of our behavior is governed by habits, which get triggered by environmental cues and play out without conscious thought, goals, or intentions. Given all these nonconscious and automatic forces that operate outside the traditional domain of logical, thoughtful decision making, we shouldn’t be too surprised that consumer choice remains a mystery, and that the nice stories consumers tell market researchers often fail to match up with what actually happens in the marketplace.

Digging down into Kahneman’s System 1 and System 2 Daniel’s Kahneman’s System 1–System 2 model is a dual-process theory of mental activity that distinguishes between two very different types of thinking and deciding, corresponding roughly to the everyday concepts of intuitive response (System 1) and logical reasoning (System 2).

System 1: The fast and the furious The defining features of intuitive System 1 decisions are spontaneity and effortlessness: ✓ Spontaneity: Intuitive thoughts seem to come to mind on their own, without any prompting or effort on our part. For instance, we can instantly recognize a face we haven’t seen in 20 years. We can put together a sentence without stopping to think about syntax or grammar. We can see a certain iconic red color and instantly think of Coca-Cola. Most thoughts and actions are normally intuitive in this sense and can be classified as products of System 1. The key to spontaneity is accessibility, the ease with which an idea comes to mind in our natural moment-to-moment flow of thought. We’ve identified several mental mechanisms that operate in System 1 to improve accessibility, such as priming, processing fluency, nonconscious goal pursuit, and habits. ✓ Effortlessness: Effortlessness is a very interesting quality of System 1 thinking, because only some properties of objects or situations are accessed effortlessly. These are called natural assessments. For example, System 1 experiences many physical properties such as size, distance, and loudness effortlessly. It also experiences many abstract properties effortlessly, such as similarity, cause and effect, and expectancy violation (surprise).

121

122

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Two especially important natural assessments that are experienced effortlessly via System 1 are emotional valence (liking and disliking) and approachavoidance propensity (natural attraction or aversion). These assessments play a big role in consumer choice because they rather quickly provide our brains with answers to two questions of great significance in choice situations: What do you like? And what do you want? The effortlessness of System 1 thinking has an important implication for decision making. Ambiguity and uncertainty are suppressed in System 1. When only a single option comes to mind, and it does so rapidly and automatically, the “choice” it represents is practically foreordained. Often it isn’t seen as a choice at all, but as a natural next step in a linear and effortless flow of actions.

System 2: The slow and the methodical The defining features of System 2 decisions are deliberate control and effortfulness. Compared to System 1, operations of System 2 are slower, require explicit mental effort, and are initiated and controlled voluntarily. Nothing happens spontaneously or automatically in System 2; all processes are consciously invoked and monitored. The results of System 2 deliberation usually take the form of judgments or evaluations. System 2 is involved in all judgments, whether they originate in impressions (intuitive judgments) or reasoning (deliberate judgments). An important quality of System 2 processes is that they’re single-threaded (that is, they come to mind one at a time). When a new deliberative thought occurs, it disrupts or interrupts the previous thought. So-called “multitasking” can only be accomplished in one of two ways: Either we consciously switch back and forth between different tasks within System 2, or we relegate a task to System 1 through practice or habit formation. Because System 2 thinking is under voluntary control, it can be more flexible and logical than System 1. We can consciously apply if-then rules and conditional knowledge to change our plans to meet our goals. Next steps can be rule governed rather than simply accessibility governed. This gives System 2 some big advantages over System 1 for decision making. Because we can selfmonitor our System 2 decision processes, we can also self-correct, a vital function that isn’t available to automatic, effortless System 1 decision processes. A key question is how System 1 and System 2 interact. The short answer is: System 2 monitors and sometimes overrides the activities of System 1. The interesting feature of this relationship is that this monitoring is usually very lax. System 2 allows many intuitive judgments generated by System 1 to be expressed, without doing a lot of error checking. This is another feature that is critical to understanding how consumers decide.

Chapter 8: Why We Buy the Things We Buy

Understanding explicit and implicit decisions Figure 8-1 shows how explicit and implicit decisions map onto our model of brain processes from Chapter 2.



Figure 8-1: Explicit and implicit decisions.



Illustration by Wiley, Composition Services Graphics

Explicit decisions result from conscious, System 2 deliberation. Of the many types of conscious thinking we engage in all the time, the mental activities of planning, reasoning, evaluating, simulating, and, of course, the experience of deciding itself, all play a role in explicit decision processes. Implicit decisions, in contrast, bypass conscious deliberation. They’re driven by automatic, effortless System 1 processes that often don’t feel like decisions at all. Two types of implicit decisions are discussed in the academic literature on choices and behavior: ✓ Reflexive implicit decisions: Both the trigger and the resulting choice are nonconscious and automatic, such as when we automatically jump out of the way when we see a shape that might be a snake in the grass. ✓ Intuitive implicit decisions: We’re aware of making the choice, but we can’t quite determine why or how we made it. For example, the decision to “like” or “not like” a new acquaintance is often intuitive in this sense. This type of implicit decision is more relevant to consumer decision making.

123

124

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Somatic markers and decision making We introduce the influential ideas of neuroscientist Antonio Damasio in Chapter 6, where we describe his somatic marker hypothesis. This hypothesis goes something like this: A somatic marker is a special kind of feeling that is formed by a physical experience that gets connected, by learning, to specific kinds of events that might occur in the future. When such an event occurs, the somatic marker is automatically “triggered” and has an automatic impact on subsequent action. If the learned emotional marker has a negative emotional tone, it acts as an automatic alarm bell of warning that a negative outcome is about to occur. If it has a positive emotional tone, it acts as a beacon of incentive to pursue the expected positive outcome. Somatic markers are implicit emotional triggers. They’re retrieved from memory involuntarily and lead us to react to an experience as “good” or “bad,” without conscious thought. In terms of our model of brain processes in Chapter 2, they influence both impressions and meaning formation, and automatically influence



behaviors, completely bypassing deliberation and analysis. Damasio has more recently applied his somatic marker hypothesis to explain the role of emotions in human decision making. His model is depicted in the following diagram. He proposes two paths from a situation to a decision: ✓ Path A is the traditional route we would associate with rational consumer decision making. A situation presents a set of facts and options, reasoning strategies are applied to the facts and options, and a decision is formulated. No emotions need apply. ✓ Path B is the route of emotion-driven decision making. The situation covertly (nonconsciously) activates somatic markers, which influence the perception of the facts and options, the reasoning strategies selected, and the decision itself. Explicit reasoning may or may not be involved, but it does not stand alone. Emotions in the form of somatic markers are influencing our decisions at every step along the way.

Illustration by Wiley, Composition Services Graphics

Chapter 8: Why We Buy the Things We Buy Explicit decisions: Emotions are still behind the wheel In the traditional rational consumer model, emotions and intuition are often viewed as obstacles to making rational decisions. They’re seen as getting in the way of good decisions, luring consumers to make bad choices based on temptation and irrelevant decision criteria. What the new brain sciences tell us is that emotions and intuition are actually essential to explicit decision making. As we describe in Chapter 6, studies of patients with damage in the emotional processing centers of their brains show that their ability to make decisions is severely compromised. Instead of being rational Mr. Spocks, they’re perpetual ditherers, unable to make up their minds and settle on a choice. Because emotional responses are mostly natural assessments formed automatically and outside the boundaries of conscious awareness, they often aren’t part of the conscious deliberative thought that precedes an explicit decision. When people report on those deliberations, they don’t have access to the implicit emotional factors, so they give incorrect or at least incomplete accounts of the sources of their decision. The dilemma for market researchers is obvious: Emotions drive decisions — even explicit decisions — but we don’t have conscious access to many of those emotional drivers. When researchers ask people why they made a particular decision, they query their memory and come up with a plausible answer, but that answer will most likely be wrong.

Modern brain science tells us two important things about explicit decision making:

✓ Treat people’s self-reports about why they made decisions with extreme caution. They’re probably rationalizing their decisions, not explaining them. ✓ Find and adopt measurement techniques that give you access to the nonconscious drivers of decisions. This is the only way you’ll have any chance of understanding why people actually make the decisions they make.

Implicit decisions: The bread and butter of consumer decision making One of the hardest things for traditional market researchers to accept is that much of the time consumers make decisions with very little conscious thought. Not only are emotions an important driver of these decisions, but emotions essentially are the decision. Human brains are cognitive misers. Thinking is hard and we try to avoid it if we can. Emotional cues and triggers are attractive decision-making aids for our cognitive-miser brains because they provide easy shortcuts that allow us to make a decision quickly, without a lot of cognitive exertion. Easy decisions

125

126

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer are fast decisions, and fast decisions give our brains time to do other things, like daydream, replay past experiences, and ponder our destinies. Consumers’ brains simply don’t spend the time and effort marketers expect them to spend thinking about the lovely products and services they buy, at least not most of the time. Instead, they run on a kind of autopilot, using habit and emotional cues to navigate the turbulent waters of the modern consumer marketplace. This is the problem that market researchers face every day. Consumers simply don’t play the game the way they “should.”

Why Consumer Decisions Aren’t Rational The traditional view of marketing and consumer choice goes something like this: People have preferences. When faced with choices, they consult their preferences in memory and make judgments about what to do. Then they make their choices based on those judgments. If you’re in the business of trying to influence people’s choices — that is, if you’re in marketing — you’re taught to do this by sending people messages containing arguments that you hope will persuade them to change their preferences and judgments and, as a result, change their choices. There are two weak links in this chain of reasoning: ✓ The assumption that preferences are stable, persistent over time, and available before a choice opportunity appears ✓ The assumption that these stable preferences produce equally stable judgments, which can be recorded reliably in surveys and will translate into consistent and predictable choices and behaviors The verdict of extensive brain science research is that neither of these assumptions is correct. Instead: ✓ Consumer preferences are seldom stable and persistent. On the contrary, they tend to be constructed in the moment of choice and are highly context sensitive, meaning they can be easily reversed by changing the context of the choice, the alternatives presented, or other factors external to the choice itself. ✓ Similarly, judgments and choices are highly sensitive to seemingly minor differences in context, such as presence of other people, cognitive distractions, time pressures, and nonconscious primes. In addition, they’re subject to predictable biases imposed by judgment heuristics (discussed in the next section) that appear to be built into our System 1 decision-making processes.

Chapter 8: Why We Buy the Things We Buy An example of the fragility of preferences and choices is provided by a study published by Jonah A. Berger and Gráinne Fitzsimons in The Journal of Marketing Research in 2008. In one experiment, participants were asked to complete a survey of product preferences that included some products that were orange in color, some that were green, and others that were neither orange nor green. Participants were randomly given a pen with either orange or green ink to complete the survey. Those who filled out the survey using green-ink pens chose more green than orange products, and those who used orange-ink pens chose more orange than green products. The mechanism at work in this example is priming. The color of the pen’s ink nonconsciously increased accessibility to items in the immediate environment that shared the same color attribute. None of the participants was aware that he or she was influenced by the color of the pen’s ink, and all the participants could probably have provided a detailed (and erroneous) explanation of why they chose the products they chose.

If preferences aren’t deeply held and judgments and choices are influenced by incidental factors that have nothing to do with persuasive arguments, it follows that persuasion may not be the most effective instrument for changing consumer minds and behaviors.

Judgment heuristics: The way we’re wired Beginning with Kahneman and Tversky in the 1970s, behavioral economists have studied how we use judgment heuristics (evaluative shortcuts) to size up situations in which we make decisions. Here are some examples and implications for consumer marketing and behavior: ✓ Loss aversion: We don’t value gains and losses equivalently. On average, stock traders sell gaining stocks sooner than they should, and hold losing stocks longer than they should. For consumers, offers expressed in terms of avoiding losses — such as “limited-time” offers — are more likely to be accepted than the same offers expressed in terms of achieving gains. ✓ Anchoring: We like to make relative, not absolute, estimates. Put a $30 bottle of wine next to a $130 bottle, and we’ll probably buy it. Put the same bottle next to a $20 bottle, and we probably won’t buy it. Anchoring is used regularly in consumer product pricing, such as when an infomercial announces, “You would expect to pay $49 for a knife like this!” ✓ Framing: Put a message in the right frame, and it practically sells itself. Call a tax an “estate tax,” and 80 percent of the public are for it, because only rich people have estates. Call it a “death tax,” and 80 percent are against it, because the government shouldn’t be able to tax people just

127

128

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer because they died. Consumers show consistent biases based on linguistic framing. For example, consumers will consistently prefer “75 percent lean ground beef” to “25 percent fat ground beef” even though the two options are equivalent. ✓ Default bias: We’re suckers for defaults. Countries where people have to check a box to volunteer to be organ donors average about 5 percent participation. Countries where people have to check a box to not volunteer to be organ donors average about 80 percent participation. For consumers, defaults are particularly effective for subscription services in which the default is to renew the subscription but special action is required to cancel the subscription. ✓ Affect heuristic: If we like something, we use that liking as a substitute for more difficult assessments. People use emotional responses as stand-ins for more complex risk assessments, frequency estimates, safety evaluations, and even predicting future economic performance of different industries. For consumers, affect (simple liking or disliking) is often used to avoid considering complex combinations of risk and benefit, substituting positive or negative feelings for making the difficult logical calculations. ✓ Endowment effect: We treat things we have as more valuable than things we don’t have. People were asked how much they would pay for an ordinary coffee mug. The average answer was $3. Other people were given an identical coffee mug as a gift, and then asked how much they would sell it for. The average answer was $7. For consumers, this effect is often seen in bundling sales strategies. Car buyers end up buying more options if they start with a fully loaded model and remove options they don’t want, as opposed to starting with a no-options model and adding the options they do want. Because our brains are cognitive misers, we tend to rely on a limited number of judgment heuristics like these to evaluate situations and make decisions. These heuristics allow us to reduce complex decisions to much simpler tasks. Instead of engaging in deep deliberative calculations, we simply apply a heuristic that feels right “in the gut.”

Including judgment heuristics in consumer decision-making models Judgment heuristics are so important to understanding consumer decisions that we’re going to have to supplement our conscious-nonconscious processing model from Chapter 2 to include them.

Chapter 8: Why We Buy the Things We Buy As illustrated in Figure 8-2, judgment heuristics impact the first two phases of cognitive response: impression formation and determining meaning and value. As aids to judgment, heuristics are particularly influential in the nonconscious attribution of value. They help consumers intuitively assign value to options and alternatives, thereby making decisions easier and faster, and encouraging immediate action (fulfilling our wants and needs right now) over time-consuming deliberation.



Figure 8-2: Including the impact of judgment heuristics on consumer decision making.

Illustration by Wiley, Composition Services Graphics

An important feature of judgment heuristics is that they work well most of the time, but because they bypass conscious deliberation, they sometimes produce suboptimal results. Another way to say this is that heuristics introduce errors and biases into our decision making that can cause us to come up with choices that differ from what a perfectly rational consumer would do. Loss aversion, for example, causes us to pay more to avoid losses than we “should” be willing to pay if we were completely rational. The great insight of behavioral economics — the one that probably brought Daniel Kahneman his Nobel Prize — is that these deviations from rationality are not random, but are consistent and predictable. Loss aversion always biases our response to losses in the same direction — that is, we’re always inclined to pay more to avoid losses, never less. So, judgment heuristics provide a foundation for a predictive science of consumer choice and behavior, one that can yield more accurate explanations and predictions than can be achieved with rational consumer models alone. The upshot is that human beings may not be rational decision makers, but they are predictable decision makers. This is the idea behind the title of Dan Ariely’s popular book on behavioral economics, Predictably Irrational: The Hidden Forces That Shape Our Decisions (Harper Perennial). Because judgment heuristics seem to be universally built into our System 1 processing

129

130

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer machinery, we all respond pretty much the same to similar situations. Clever marketers who are aware of these heuristics can modify a consumer’s environment to encourage decisions that favor their brands and products over competitors’. This is one of the main avenues of marketing innovation that neuromarketing is currently supporting. Careful exploitation of anchors, frames, defaults, and other heuristic stimuli in a shopping environment can have at least as much impact on sales as the most persuasive advertising message. All these tactics can be derived from an understanding of how the brain actually perceives and interprets the world and makes decisions. As such, they’re all targets in the research sights of neuromarketing.

The Limits of Persuasive Messaging in Consumer Decision Making To directly persuade a consumer to buy your product, you need to grab her attention, make her listen to what you have to say, and then get her to remember your argument the next time she has an opportunity to make a purchase. That’s a tall order with many steps, quite a bit of cognitive responsibility required from consumers, and many potential points where the process can break down. The new perspective that brain science brings to this challenge is twofold: ✓ It tells marketers and market researchers why persuading people with arguments and claims is so hard to do, given how the intuitive consumer actually thinks and makes decisions. ✓ It presents the intriguing possibility that all this effort may be beside the point. Persuasive messaging may be overrated as a marketing mechanism. In this section, we consider some of the challenges that persuasive messaging faces as a mechanism for influencing the attitudes and behaviors of intuitive consumers.

Chapter 8: Why We Buy the Things We Buy

The six principles of persuasion Robert Cialdini, emeritus professor of psychology and marketing at Arizona State University, has spent his career studying persuasion. His book, Influence: The Psychology of Persuasion (HarperBusiness), is one of the most popular business books ever written, with over 2 million copies in print. Cialdini says he became interested in persuasion because he got tired of being talked into doing things he didn’t really want to do by too many salespeople and telephone solicitors. So, he analyzed the persuasion techniques these experts used, and identified six key principles that seemed to make persuasion particularly hard to resist: ✓ Reciprocity: If a person accepts a small gift, no matter how trivial and even if unwanted, he or she becomes more likely to give something in return. ✓ Commitment and consistency: If a person makes a public commitment, even a trivial or inconsequential one, he or she becomes more likely to act in a way consistent with that commitment. ✓ Social proof: If a person sees other people doing something, or is exposed to evidence that other people are doing something, he or she becomes more likely to act in conformance with that behavior. ✓ Authority: If a person believes someone in authority approves a particular choice or behavior, he or she becomes more likely to follow the advice of the authority figure.

✓ Liking: If a person likes the person making a request, he or she becomes more likely to comply with a request that person makes. ✓ Scarcity: If a person believes something is scarce or in short supply, that item becomes more desirable to him or her and the person is more likely to want to acquire it. Cialdini’s principles, first published in 1984, anticipate or reflect many of the heuristics identified by behavioral economists. For example, ✓ Reciprocity is an application of priming and nonconscious goal activation (triggering a goal to repay what is received). ✓ The act of liking leverages the comfort of familiarity and the affect heuristic. ✓ Scarcity works, at least in part, because it activates loss aversion. All six principles leverage the framing heuristic: Each frames a request in a different way (reference to authority, consistency, group norms, and so on) to make compliance more likely. It’s worth noting that the effectiveness of all these persuasion principles weakens significantly if the person being persuaded is aware of the technique being used. In other words, the principles operate primarily at the nonconscious level of forming impressions and determining meaning and value. When they’re exposed to the light of conscious deliberation, their impact on choice declines.

131

132

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

Persuasion versus implicit consumer decisions Implicit consumer decisions bypass conscious deliberation. These decisions are experienced without any internal questioning or weighing of arguments, leaving no opportunity for persuasive messaging to influence the decision’s outcome, at least not in a way the consumer would be consciously aware of and would be able to articulate to a researcher. Persuasion certainly can play a role in such decisions, but its impact is likely to be nonconscious and situational, not conscious and logical. For example, consumers may be persuaded to buy a product because they believe it’s in short supply or because it’s endorsed by an authority figure, but they’re more likely to rely on situational and environmental cues in coming to these conclusions, not persuasive arguments. Given the onslaught of persuasive messaging that consumers are exposed to in their everyday lives, there is evidence that explicit persuasion efforts may generate an automatic and nonconscious counter-persuasion reaction in many consumers. Even an innocuous persuasive message like a retail store slogan has been found to trigger counter-marketing goals and behaviors in consumers (see the discussion of this research in Chapter 7). These findings have important implications for advertising, which is viewed by many practitioners as first and foremost a marketing vehicle for persuasive messaging. According to this view (a part of the rational consumer model described in Chapter 2), the purpose of an ad is to deliver a persuasive message in a creative way so viewers will notice and remember the message at a later point in time when they’re considering a purchase. The brain science research we’ve reviewed does not support this view. It paints a very different picture of advertising effectiveness, in which priming (not attention) is the primary mechanism by which advertising influences us. The way consumers infer the relevance of an ad to their needs and interests is not by deliberately processing a persuasive argument, but by picking up clues and cues from attributes such as familiarity, processing fluency, emotional markers, and nonconscious goal activation. The most surprising thing about these influences is how non-logical they are. To decide to buy a product because it satisfies a nonconscious goal, triggered by a random prime, encountered in a logically unrelated context, is the height of irrationality. Yet such misattribution seems to be a pervasive source of consumer decisions and actions — when they’re driven by System 1 thinking.

Chapter 8: Why We Buy the Things We Buy

Persuasive messaging does have a place in many kinds of marketing, of course, whenever System 2 thinking is dominant. In advertising, direct response ads that ask viewers to make a contribution or visit a website are relevant opportunities for persuasive messaging. Such advertising has to deliver a one-two punch to be effective:

✓ It must activate System 2 processing, which is a difficult task in itself, due to the lazy control that System 2 provides over System 1. ✓ When System 2 is awakened, the argument must pass the logical filters, if-then rules, experience matching, simulation, and counter-arguments that System 2 will apply to it. All in all, a tough sell. Gary Klein is a researcher who has studied implicit decision making (which he calls “intuitive decision making”) in a wide variety of occupations — business executives, firefighters, nurses, soldiers. In his book, The Power of Intuition: How to Use Your Gut Feelings to Make Better Decisions at Work (Crown Business), Klein estimates that about 90 percent of our decisions are intuitive. Assuming that this ratio holds for consumer decision making as well, marketers and market researchers are faced with the challenge that their traditional model of persuasion is relevant in only about 10 percent of the decisions they want to understand and influence. For the remaining 90 percent of consumer decision making, different measurement techniques are required, and that’s where neuromarketing comes into the picture.

Persuasion versus judgment heuristics Judgment heuristics operate as a part of System 1 processing. Because they impact decisions and actions below the level of conscious awareness, they aren’t subject to the limits encountered by persuasive messaging. Judgment heuristics are essentially unfair competitors of persuasive messaging. By simplifying decision making with intuitive shortcuts and estimations, they make mental escalation to conscious deliberation unnecessary, thus providing an alternative path to choice and action that can easily render the most earnest persuasion effort irrelevant. As behavioral economics has become more mainstream in the last decade, thanks to the popularity of books like Daniel Kahneman’s Thinking, Fast and Slow (Farrar, Straus and Giroux) and Dan Ariely’s Predictably Irrational (Harper Perennial), marketers have become more aware of judgment heuristics and more sophisticated in their use. This is especially true in shopping, retail, and dining contexts, where immediate consumption or acquisition can be channeled in desired directions with careful attention to factors such as

133

134

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer store layout, the proximity of competing products, the order in which items are viewed, pricing options, or the availability of decoy alternatives (alternatives offered for the sole purpose of making other offers appear more attractive). Such manipulations of choice architecture (the way in which choices are presented to encourage different selection outcomes) can be used to trigger judgment heuristics and steer consumer choice in one direction or another. Here are some examples using the anchoring heuristic: ✓ In an experiment conducted in a convenience store where the average purchase was $4, some customers were given a coupon that offered $1 off any purchase of at least $6, while others were given a coupon that offered $1 off any purchase of at least $2. Not only did customers who received the $6 coupon spend more than average, but customers who received the $2 coupon actually spent less. The coupon created an anchor effect from which people nonconsciously adjusted their spending. ✓ In fast-food restaurants, the introduction of extreme food sizes (for example, five-patty hamburgers) has been found to increase the choice of slightly less “supersized” options (such as three-patty hamburgers) by providing a new anchor point that makes the previously most extreme option seem less extreme. ✓ A similar logic is often used in pricing, in which an anchoring effect is created by including an extremely high-priced alternative in the consideration set, thereby making alternatives that were previously viewed as high-priced appear more moderately priced in comparison. ✓ Warehouse stores often use the technique of conspicuously displaying high-priced items like large-screen TVs and jewelry at the front of the store to reduce resistance to purchase less-expensive items elsewhere in the store. In each of these cases, consumer choice is influenced nonconsciously, via activation of a judgment heuristic as part of an implicit decision process. As long as the consumer isn’t aware that his or her decision is based on a nonconscious heuristic, persuasive messaging is likely to be irrelevant to the decision. Asking consumers if an ad or other persuasive message had an impact on their choice is, therefore, beside the point. They may say yes or no, but the answer is probably unrelated to the decision process that actually occurred. It’s worth noting that when persuasive messaging is cut out of consumer choice in this way, by activating System 1 decision processes, the consumer’s ability to activate his own counter-persuasive arguments is also cut out of the process, because such deliberations are a part of System 2 decision processes.

Chapter 8: Why We Buy the Things We Buy Although there is evidence that consumers can activate nonconscious correction goals to resist persuasive messaging (discussed in Chapter 7), the same correction mechanisms may not work for resisting nonconscious judgment heuristics or other decision influences like priming and processing fluency. Evidence from hundreds of nonconscious processing experiments supports the conclusion that System 2 override is necessary to counteract the effects of System 1 heuristics. In other words, if consumers aren’t consciously aware of the impact of judgment heuristics on their choice behavior, they can’t compensate for those impacts.

Persuasion versus habit Finally, persuasion must compete with habit. As described in Chapter 7, habits don’t require supporting goals — conscious or nonconscious — or intentions to be activated. Habits arise from repetition, are triggered by environmental cues, and play out in an automatic way without conscious oversight. Changing habits through persuasive messaging has generally been found to be ineffective, to a large degree because of the misalignment between trying to impact a nonconscious process by activating a conscious process. The two do not connect. Research on habits reveals that about 45 percent of people’s day-to-day activities is repeated almost daily, usually in the same physical location. Repetition is also extremely prevalent in consumer behavior. As summarized by researchers Wendy Wood and David T. Neal in “The Habitual Consumer” (Journal of Consumer Psychology, 2009): ✓ Consumers tend to buy the same brands of products across different shopping episodes. ✓ Consumers purchase the same amounts at a given retail store across repeat visits. ✓ Consumers eat similar types of foods at a meal across days. ✓ These habits have significant financial impacts for product companies. Increases in repeated purchase and consumption are linked with increases in market share of a brand, customer lifetime value, and share of wallet. The key characteristic of habits is that they’re rigid. They tend to be carried out in the same way even if goals or contexts change. As a result, habits change only slowly over repeated experiences.

135

136

Part II: The Essence of Neuromarketing: The Nonconscious Mind of the Consumer

For advertisers who want to change consumers’ choices and behavior through persuasive advertising, habit presents a unique and difficult challenge. This challenge has led some researchers to reconsider the relationship between advertising and behavior change. One of the first was Andrew Ehrenberg, who proposed the heretical idea in 1974 that the purpose of advertising was not to change behavior, but to reinforce satisfaction with brands already being used. Ehrenberg suggested that advertising is mainly a vehicle for reinforcing brand awareness and favorability, not a mechanism for increasing sales directly. He argued that repetitive advertising for established brands was primarily a defensive weapon, designed to provide emotional validation for already developed repeat buying habits. Ehrenberg’s views were not well received by the marketing community when he presented them, and they remained a minority opinion for several decades. But recent brain science, including our understanding of System 1 and System 2 processing, provides a stronger foundation for ideas such as Ehrenberg’s. We address these issues in our discussion of neuromarketing and advertising in Chapter 11.

Part III

Neuromarketing in Action

H

In this part . . .

ere, we describe how and where neuromarketing is being applied today. In contrast to the view that neuromarketing is a radical and untested new technique to make people buy stuff they don’t really need, we show how neuromarketing is being used just like traditional market research — to provide new answers to the same old questions that have been vexing marketers for decades: Do consumers like my brand? Do they want my product? Do they remember my advertising? Neuromarketing techniques are also being applied in some new areas that fall outside the traditional marketing domain, such as entertainment testing and online experience evaluation. In this part, we reveal how the insights and findings of brain science have emerged from the academic labs and moved into the toolkits of neuromarketers. And we show how these tools have given neuromarketers new perspectives on understanding and improving marketing effectiveness.

Chapter 9

Brands on the Brain In This Chapter ▶ Understanding how connections in the brain build strong brands ▶ Seeing how successful brands influence us ▶ Discovering how strong brands create lasting market impact ▶ Identifying ways to test and build stronger brands

O

ne of the most elusive concepts in the field of marketing and advertising is the notion of a brand. Ask consumers to describe what a brand means to them, and you’ll get a wide range of responses. Traditional market research must make a leap from those stated responses to predicting the outcomes of interest to marketers, such as how brands impact product impressions, choices, and ultimately, purchasing behavior. Because much of the impact of brands on consumer choice and behavior is nonconscious, this exercise in interpreting the tea leaves of consumers’ articulated utterances can easily go astray — too often, consumers simply don’t act the way they say they’re going to act. In this chapter, we show how brands are represented in the brain, and how those representations can be reinforced or changed by marketing. We begin with a discussion of brands and memory, describing how people’s experiences with brands get converted into long-term brand associations and loyalty. We then consider how consumers can be influenced by brands at a nonconscious level and how brand-building occurs over time. Next, we look at why leading brands are so hard to displace, and how upstarts can still sometimes displace them. Finally, we summarize how neuromarketing measures can be used to study the impact of brands on the brain.

Brands Are About Connections A brand has physical aspects, like a logo or slogan or spokesperson, but at its core, it’s an idea that exists in the minds of people. The most important element of this idea is how it’s connected to other ideas and feelings in people’s minds. And those connections, in turn, are a function of a lifetime of experience with the brand, both direct (through actual usage) and indirect (through exposure to advertising, marketing, and the experiences of others).

140

Part III: Neuromarketing in Action

Because consumers are largely unaware of how brands influence them, branding is a natural research area for applying brain science insights and neuromarketing methods.

Seeing brands everywhere Studies have shown that children recognize hundreds of brands by the time they’re 3 years old and have opinions about thousands of brands by the time they reach their teens. By the time people become adults, they’ve amassed an enormous library of associations and impressions relating to brands. Brands are deeply embedded in our brains because they help us make sense of the vast variety of products and services we’re exposed to every day in our lives as consumers. Because our brains are cognitive misers that seek out shortcuts to avoid deep, deliberative thinking and decision making, brands provide attractive alternatives to rethinking product decisions every time we’re faced with a choice. In effect, brands roll up a lifetime’s worth of experience (or at least an extended period of repeated direct and indirect experience) into a single summary representation of a variety of products under a single brand umbrella. They perform this semi-miraculous feat because marketers invest years of repetitive and carefully crafted exposures to teach us what their brands stand for. And we learn, even if we’re unaware of learning.

Understanding brand “equity” and connections in memory Brands exist in memory. To understand how they influence consumer decisions and actions, you need to understand the organization of human memory a little better (see the nearby sidebar, “Brands and memory”). Here are the key points to remember: ✓ Some brand memories are explicit and accessible. These are the memories a consumer can talk about when a researcher asks him for his opinions on brands and products. ✓ Other brand memories are implicit and inaccessible. These are the memories that influence a consumer’s behavior even though she isn’t aware of their influence, or even of their existence. ✓ These memory systems differ in two important ways. First, explicit memory is improved with attention, while implicit memory works just as well in the absence of attention. Second, explicit memories must be refreshed regularly to avoid being overwritten by new memories, while implicit memories can be much longer lasting without reinforcement.

Chapter 9: Brands on the Brain

Brands and memory Human memory should actually be called human memories, because our brains come equipped with several distinct but interacting memory systems: ✓ Sensory memory: The system that allows you to remember sensory input long enough to process it in your brain. It lasts less than a second. ✓ Short-term working memory: The system that allows you to retain a piece of information in your conscious mind, usually for no



Explicit memories can be retrieved voluntarily, so they’re consciously accessible. Implicit memories are nonconscious and inaccessible, so we aren’t consciously aware of them. Within explicit memory, episodic memory is where we store personal experiences with brands, such as events we’ve been involved in at a specific time and place. Semantic memory is where we store accessible information about a brand, such as its name, product attributes, and other concept-based knowledge. Brands also play a role in implicit memory processes. Priming, described in Chapter 5, is the implicit memory process by which one idea more easily comes to mind after exposure to

more than a minute, while you deliberate about it. ✓ Long-term memory: The system that stores memories from your more distant past, including things you’ve learned and things you’ve experienced. Only long-term memory is critical for brands and branding. Long-term memory has a distinct architecture consisting of two subsystems: explicit memory and implicit memory.

Illustration by Wiley, Composition Services Graphics

another idea. Brands can either be primes themselves or be primed by other things. Priming is a very important memory process for understanding how brands work. Conditioning is a process of associating two things in memory by repeatedly presenting them together. Much of brand advertising is an exercise in conditioning. Automatically and without conscious effort, our minds come to associate particular attributes with particular brands. Procedural memory has to do with learned skills like riding a bike or driving a car. Although brands are generally not associated with the acquisition or use of such skills, they can become part of a person’s perception of a skill, as when one brand of sports equipment is believed to be superior to another.

141

142

Part III: Neuromarketing in Action Memories, both explicit and implicit, are highly networked. Each memory is associated with other memories — for example, your memory of the Coca-Cola brand (a semantic memory) may be associated with memories of quenching your thirst with an ice-cold bottle of Coke on a hot summer day when you were a young child in your hometown (an episodic memory). Experiencing the iconic Coca-Cola Santa Claus throughout your youth may have created an indelible connection in your mind (through conditioning) between Coke and Christmas. These associations are formed, strengthened, or weakened in memory every time you experience the brand — in an ad, in a store, or by using a product. Brand equity is the value a company realizes from a product with a memorable brand name and positive, strong brand associations. Economic evidence shows that building brand equity leads to additional sales and better margins. A strong brand opens doors to intermediaries and potential partners and, thus, enables opportunities that are not available to brands with limited or no brand equity. Strong brands lift the value of the firms that own them, help those companies to attract the best talent, and provide them with a clear focus for marketing initiatives. From the neuromarketing perspective, a brand is a concept stored in memory within a network of associations. The brand can be thought of as a node in this network, linked to a variety of other nodes, which make up the brand associations. For example, the core concept of Red Bull (the brand) is the idea of an energy drink, a caffeinated beverage that is consumed for the purpose of boosting energy. This idea is associated in memory with a particular taste sensation, likely points of sale, preferred drinking occasions, various visual images (logo, colors, design concept, container), and other consumption-related memories, both semantic and episodic. But the brand has also carefully built broader connections in the minds of its consumers, such as an association with a daredevil attitude toward life, a love of extreme sports, and sponsorship of adventure events and promotions connected to the brand’s tag line and chief metaphor, “gives you wings.” Marketers want to understand and, in many cases, change the content of those associations, their strength, and their connections to other concepts. Because of these associations, it’s possible to activate the brand memory indirectly (by activating a concept or emotion that is strongly linked to the brand memory). For example, viewing a TV program on adventure holidays may activate the Red Bull brand concept. The consumer may be aware of this, by consciously thinking of Red Bull, or it may be a nonconscious process.

Chapter 9: Brands on the Brain

Experiencing a brand In the brain, neurons that are frequently activated together develop stronger connections, helping the memory become stronger in the consumer’s mind. But the reverse is also true: The connections between sets of neurons that are not activated together over a long period of time will get weaker. From the marketing perspective, this means that the brand memory needs to be activated regularly to ensure that the consumer doesn’t forget the brand. But the marketer also needs to activate desirable associations frequently in order to strengthen them. Memory, as discussed in Chapter 6, is constructed, not simply retrieved. When the brand memory is activated, the brain re-assembles it by bringing the bits of information together. Some links, however, may be somewhat weak, and elements of the memory may be missed. The mind may fill holes in the memory by making assumptions and may embellish a brand memory that carries strong emotions. This is why we can say with certainty that no memory is accurate. As time passes, it changes. The marketer’s challenge is to actively shape the consumer’s brand memory to increase the likelihood of purchase. There are two ways brand memories can be updated: ✓ By direct experience with the brand, such as drinking Red Bull, wearing Nike shoes, or using an Apple iPad ✓ By exposure to messaging about the brand, such as viewing advertising on TV, seeing other kinds of marketing messages like billboards or print ads, or talking with your friends about their experiences with the brand You may assume that experiencing a brand directly would be the most powerful source of changing or reinforcing memory associations with the brand, but a large body of research shows that, surprisingly, it’s the experience that is often shaped by the existing memories, not the other way around. The mechanism by which this effect occurs is expectations: Experiences and exposures to marketing create and update the consumer’s expectations about experiencing the brand in the future. Some researchers call this the placebo effect of brand expectations on product experience, because these expectations act like a placebo pill in a drug effectiveness test. In such tests, placebos often provide the same relief as the real drug, simply because people expect them to. The classic neuromarketing demonstration of this effect was conducted by a team of Baylor University researchers in 2004. While study participants had

143

144

Part III: Neuromarketing in Action their brains scanned in a functional magnetic resonance imaging (fMRI) scanner (see Chapter 16), they performed a test made famous in Pepsi advertising in the 1980s called the “Pepsi Challenge.” In the advertising version of the test, people did a taste comparison of the two colas, not knowing which was which, and more often than not preferred the taste of Pepsi to Coke, even if they were loyal Coke drinkers. In the experiment, the researchers also conducted a slightly different test. They told participants they were drinking Coke (or Pepsi) and then compared brain scans of Coke loyalists and Pepsi loyalists while tasting the soft drinks. Whichever cola participants were really tasting (the researchers mixed them up), when people thought they were drinking Coke, different areas of their brains were activated than when they thought they were drinking Pepsi. When tasting what they believed was Pepsi, areas of their brains associated with immediate reward, such as experiencing sweetness, were activated. But when tasting what they thought was Coke, additional areas were activated that were associated with positive emotions and explicit episodic memories. The researchers’ interpretation: People’s associations of positive emotional memories with Coke, often formed over a lifetime of direct experience and marketing exposure, had a greater impact on their tasting experience than did the actual taste of the cola. Brand expectations affected brand experience more than brand experience affected brand expectations. This, in a nutshell, is the power of brand equity. It raises the intriguing idea that when consumers consume a product that lives under a strong brand, they may actually be consuming brand expectations more than they’re consuming the product itself. This idea sounds crazy if you subscribe to the rational consumer model that underlies traditional market research, but it flows naturally from the intuitive consumer model that underlies modern brain science and neuromarketing.

How Brands Impact Our Brains Consumers may not be aware of the influence brands have on them, but encountering a known brand has significant effects on what consumers think and do. Exploring how brands impact nonconscious processes provides marketers with new insights they can use to raise the effectiveness of their brand strategies.

Chapter 9: Brands on the Brain

Activating nonconscious thinking with brands In 2008, behavioral economists Dan Ariely and Michael Norton published an important article called “Conceptual Consumption,” in which they argued that academics and marketers could benefit from thinking about consumers as consuming not products but concepts. Applying this idea specifically to branding, and changing their terminology just a bit, we can identify four categories of brand concepts that consumers can consume above and beyond physical consumption: ✓ Expectations: As we illustrate in the previous section, brand expectations can affect physical consumption at a level that can be observed in brain imaging studies. This effect can occur even if consumers are completely unaware of it. ✓ Goals: Brands can activate both conscious and nonconscious goals, and goals can have a big impact on people’s behavior (as we described in Chapter 7). Again, this effect can occur completely outside conscious awareness. ✓ Fluency: When people associate processing fluency with truth, beauty, liking, and familiarity (see Chapter 5), they are, in effect, gaining a sense of satisfaction from consuming that fluency rather than consuming a product that is presented fluently. This usually happens without any awareness of the effect. ✓ Values: When a brand is strongly associated with a value in people’s minds, such as the association between Red Bull and a daredevil attitude toward life, people may really be consuming that value when they’re consuming the product. Following research pioneered by psychologist E. Tory Higgins, Ariely and Norton call this regulatory fit between a value and a consumption experience. Values are like goals but more general. People feel better about themselves when the goals they pursue fit in well with larger values they embrace. In each of these types of conceptual consumption, we often find explanations for consumer behavior that, on the surface, appear to be less than ideal from a purely rational consumer perspective. For example, people may happily consume food that’s objectively less tasty because they expect it to taste better (due to a strong brand association with tastiness), because it helps them to achieve a goal (like weight loss), because it comes in an especially easy-to-prepare form (ease of use), or because it represents a commitment to a higher value (such as promoting local food growers).

145

146

Part III: Neuromarketing in Action

Conceptual consumption almost always occurs at a nonconscious level. Consumers typically aren’t aware that their level of satisfaction with a brand experience may be coming from conceptual consumption rather than physical consumption or usage. Because they’re unaware of these effects, they’re unable to articulate them in interviews, surveys, or focus groups.

Testing the Apple brand and creativity Social psychologists at Duke University wanted to test whether an association emphasized by a brand in its marketing and advertising could trigger goals and behavior compatible with that brand. They decided to use the Apple brand, which has spent years associating itself with creativity and innovation, as in its “Think Different” advertising campaign, in which Apple was associated with images of innovators like Albert Einstein, Pablo Picasso, Alfred Hitchcock, and Jimi Hendrix.

The results were startling, especially given the fact that the participants weren’t even aware that they had seen any logos. Those exposed to the IBM logo identified, on average, 5.5 uses for a brick. The participants in the control condition identified 6.1 uses. Participants who were exposed to the Apple logo identified an average of 7.3 uses, significantly higher than the other two groups. In addition, the average creativity of the Apple group was 8.65, compared to 8.33 for the control group and 8.13 for the IBM group.

To test the extent to which Apple had forged a connection with creativity in consumers’ minds, the researchers set up a clever experiment. In the first part, about 400 participants believed they were performing a hand-eye coordination test, pressing buttons on a keypad when a small blob appeared on the left or right side of a computer screen. But unknown to the participants, those blobs actually contained a consciously undetectable image flashed on the screen for a fraction of a second — either the iconic Apple logo or the equally well-known IBM logo (or no logo as a control condition).

The results were surprising enough that the researchers repeated the test using the Disney brand and honesty as the targeted behavior, and saw the same results. This was one of the first demonstrations that showed how brand associations could trigger motivated goal-pursuit behavior, even when experienced nonconsciously.

Later in the session, the participants performed a classic task used to measure creativity: They were asked to identify as many uses for a brick as they could think of in a short time period. The researchers then counted the number of uses identified by each participant and the level of creativity in their responses.

If you’re really curious, you can read all about this study in “Automatic Effects of Brand Exposure on Motivated Behavior: How Apple Makes You ‘Think Different,’” by Gráinne M. Fitzsimons, Tanya L. Chartrand, and Gavin J. Fitzsimons, in the Journal of Consumer Research (June 2008). You can download a PDF of the article here: https://faculty. fuqua.duke.edu/~tlc10/bio/TLC_ articles/2008/Fitzsimons_ Chartrand_Fitzsimons_2008.pdf.

Chapter 9: Brands on the Brain Faced with the problem of identifying nonconscious sources of consumer behavior, marketers and researchers have two paths open to them: ✓ Measure direct brain or body responses that provide clues about how people are responding nonconsciously to brands and related marketing materials. ✓ Measure behavioral responses, such as the actions people take in real or simulated buying situations after exposure to brands and related marketing materials. We discuss many examples of both approaches throughout this book, including the last section of this chapter. In the nearby sidebar, “Testing the Apple brand and creativity,” we describe a particularly innovative experiment that used a behavioral approach to assess brand associations and their impact on goal activation.

Brand-building over time A brand is a concept stored in memory within a network of associations. Those associations must first be established; then they’re strengthened over time. It follows that brand-building is a long-term investment to establish the brand concept in the consumer’s memory and to create and strengthen the desired associations. A new brand must stand out if it’s going to create a unique concept in the consumer’s mind. It must be seen as novel rather than familiar. But it can’t be seen as too novel, or it will trigger emotional resistance. The brand marketer must walk a fine line: Present the new brand concept as different enough to draw attention, but link it to positive emotional reactions by showing how it can address consumers’ goals and needs more effectively than competing brands already on the shelf. Connecting brands to positive concepts in memory is time-consuming and expensive. Some brands try to take shortcuts around this process, and may achieve short-run successes as a result — for example, the brand that wins sales by copying the leading brand rather than differentiating, the brand that wins through distribution advantages rather than through its positioning, the brand that is simply bought on price, and so forth. But the vast majority of new brands don’t succeed unless they manage to develop a distinctive brand concept in the consumer’s mind with strong, positive, and relevant associations connected to that concept. The well-known statistic on new product introductions — that 80 percent of new products fail — is testimony to the difficulty of this task.

147

148

Part III: Neuromarketing in Action

Over time, brands build connections in memory through the implicit memory process called conditioning. Conditioning works through a simple three-part sequence: ✓ Exposure to the brand

✓ Association with an emotionally positive concept ✓ Reinforcement through repetition If you’re thinking, “That sounds like Pavlov’s dogs,” you’re right. This is the classic approach to conditioned learning. Just as Pavlov’s dogs were taught to salivate when they heard a bell ring, consumers are taught to associate brands and positive concepts, like the Apple and creativity example in the sidebar earlier in this chapter. After a brand and a concept are connected, that connection is strengthened every time either the brand or the concept is encountered, either directly (through experience) or indirectly (through messaging).

The marketing goal is to move a brand from novelty to familiarity and, ultimately, to an established habit, represented by habitual buying. As the process proceeds, the brand becomes associated with a promise in the mind of the consumer — to deliver on the expectations the consumer has developed through past exposures to the brand and the associated consumption experiences. The successful brand stands for consistency and satisfying established expectations.

Growing brain-friendly brands Conditioned learning is an implicit memory process. It occurs effortlessly and nonconsciously, so people aren’t aware of whether or how it’s operating. This means that marketers can’t ask people directly about the associations they’re forming with their brand.

Luckily, brain science research provides us with a number of guidelines that can be used to optimize the chances that a conditioned learning process is occurring and will be successful:

✓ To trigger buying goals, make sure the brand and its associated concept are represented visually in close proximity to each other. Nonconscious processing is more readily activated by visual cues, which are more easily processed than written messages (due to processing fluency). ✓ A successful conceptual connection with a brand is often facilitated by strong, positive emotional associations. Motivating goals are the main drivers of purchase intention, but emotional connections are often key ingredients in the specific choice ultimately made.

Chapter 9: Brands on the Brain ✓ When a brand has strong associations with a purchase occasion, such as a holiday or lifecycle event, this is a good indication that it’s successfully reinforcing conceptual connections in its marketing and advertising. ✓ High levels of customer satisfaction and loyalty are indicators that a brand is delivering consistently on consumer expectations whenever a purchase or consumption takes place. ✓ The more often and more radically a brand changes the conceptual connections communicated in marketing and advertising, the less likely it is to achieve reinforced long-term brand associations in memory. Conditioned learning is easily disrupted when one connection is replaced with another. ✓ Mature brands that depend only on familiarity to sustain their conceptual connections are at risk. Even established category leaders need to refresh their brand connections regularly in their consumers’ minds, either by strengthening existing associations or by developing new ones. A mature brand that isn’t skillfully combining novelty and familiarity in its messaging is at risk of seeing its conceptual connection deteriorate or be co-opted by upstart brands.

Why Leading Brands Are So Hard to Displace All the brand memory and activation processes we’ve been discussing in this chapter conspire to make leading brands extremely hard to displace. Because mental accessibility is a key driver of intuitive judgment and choice (see Chapter 8), being the most accessible brand in a consumer’s mind has numerous advantages. Yet upstarts do sometimes come along and knock leading brands off their thrones. The reasons behind both possible outcomes can be found in the brain processes of intuitive consumers.

Taking advantage of brand leadership Brands fulfill a wide range of important functions. They increase familiarity and fluency for branded products. They provide shortcuts to choice when alternatives are difficult to compute. They shape expectations that can influence consumption and usage experiences. They provide assurances of consistency and quality for future purchases. And finally, they can invoke implicit emotional connections that impact attention, attraction, and memory activation.

149

150

Part III: Neuromarketing in Action A leading brand takes advantage of all these functions in a kind of selfreinforcing cycle: It has at its disposal a strong set of positive associations in consumers’ minds that make it more accessible in more circumstances than other brands in its category. Greater accessibility translates into more sales, which create wider distribution opportunities, greater word of mouth (including in social media), more editorial media coverage, superior product placement, shelf and display space in retail environments, more recommendations by sales staff, greater promotional activities by retailers and brand owners, and even access to better talent when it comes to recruiting members of the marketing team or appointing a creative agency. These advantages, in turn, increase the frequency and quality of the leading brand’s exposure to consumers, allowing it to produce more frequent and effective activations of the brand concept and its associations in consumers’ memory, resulting in even greater accessibility for the brand over time. Researchers have shown that a strong brand may even benefit from the advertising and promotions of lesser-known brands. It isn’t unusual for consumers to attribute challenger brand advertising or other exposures to the leading brand. This happens because consumers don’t pay that much conscious attention to advertising and marketing. As a result, if competitors’ messages activate category concepts and associations that are easily connected to the leading brand, consumers may mistakenly associate the message with the leader, not the challenger.

Leveraging habitual buying One of the most powerful benefits leading brands have is their ability to take advantage of habitual buying. Habits, as discussed in Chapter 7, arise from repetition and are largely automatic. Unlike motivated behavior, driven by either conscious or nonconscious goal pursuit, habits do not require any form of intention or goal activation. Once the right situational cue is encountered, the habitual behavior script is triggered, and the action is carried out. Much of everyday shopping is habitual. Although retail experts often say that 90 percent of purchase decisions are made in-store (see Chapter 12), in fact a large proportion of those purchases are not based on decisions (implicit or explicit) but instead are a function of habit. Even major purchases are often habitual. For example, many consumers automatically gravitate to the same automobile brand, or the same appliance brand, or the same mortgage provider. As the top seller in a category, the leading brand captures the lion’s share of this habitual buying. Habits must be learned. There is always an initial choice process, which may even include some experimentation with different brands or product variations. The consumer then settles on a particular selection and, over time,

Chapter 9: Brands on the Brain habitual buying develops. Product selection becomes automatic: When supplies of brand A run low, the consumer “thoughtlessly” picks up more brand A on his or her next shopping trip. There is no considered decision.

For leading brands, a top goal is to encourage habitual buying and avoid doing anything that may disrupt established buying habits that favor the leading brand. Brain science suggests several strategies to support this goal:

✓ Maintain consistent triggers at the point of sale. Don’t change the situational cues that trigger habitual buying. Changing in-store displays and promotions can disrupt habitual behavior. ✓ Don’t ask your consumers to think. If they start thinking about the purchase, they may start thinking about alternative brands. ✓ Don’t violate the habitual buyer’s expectations. Any change in any aspect of the product — price, placement, packaging, or ingredients — can disrupt habitual buying. Novelty attracts attention, attention leads to conscious deliberation, and deliberation can lead to consideration of alternatives. ✓ Trigger behavior, not attitudes. Habitual buying is about activating a behavior with a situational cue, not remembering an attitude. Activating an attitude produces much less predictable results than activating a behavior. As these guidelines imply, habitual buying can be disrupted. While the leading brand usually wants to maintain its own habitual buyers, and the upstart brand wants to disrupt the leader’s habitual buyers, disruption can be used by both leaders and upstarts. The challenge for either is to devise a strategy that disrupts the competitors’ habitual buyers, but not your own.

Understanding the upstart’s dilemma So, what can a challenger brand do to deal with the habitual buying that favors the leading brand? Neuromarketers look to brain science for clues.

The best route to breaking the habits that favor the leading brand, without disrupting your own brand’s habitual buyers, is to draw the consumer’s attention away from the leading brand and engage him or her with enough novelty to disrupt both the habitual buying cycle and the deep sense of familiarity enjoyed by the leading brand. Disrupting a habitual buying cycle requires understanding the triggers and associations by which that cycle operates to the advantage of the leading brand.

151

152

Part III: Neuromarketing in Action According to product innovation expert Jean-Marie Dru, when the triggers and associations used by the leading brand are understood, the upstart’s objective should not be to disrupt that mental picture; instead, it should be to provide the consumer with a different set of desirable qualities that are not strongly associated with the leading brand, but can be associated with the upstart brand. This new set of concepts and associations then become mental territory that the upstart brand can dominate, creating and reinforcing a new network of associations that directs consumers to the upstart rather than the current leader. One way to perform this neat trick is to take a page out of the conceptual consumption playbook — associate your upstart brand with a set of higherorder values that are important to consumers in the category, but are not referenced by other competing brands. An example is provided in the dog-food category. For years, dog food was promoted on the basis of product qualities like vitamins, minerals, size of chunks, and meat content. The Pedigree brand disrupted this marketing convention by positioning itself at a higher level, declaring itself the “We’re for Dogs” brand with an emotional advertising campaign that said, in effect, “We love dogs more than any other dog-food brand does; if you love dogs, too, buy our brand.” It would’ve been nearly impossible and probably self-damaging for Pedigree to try to unseat the leading brand by emphasizing even greater product quality. After all, the leading brand had developed strong product-quality associations in consumers’ minds, which were frequently activated and strengthened through extensive advertising, promotions, sponsorships, and packaging. To question these associations would’ve been risky, because it would’ve disrupted habitual buying throughout the category, including opening up questions about Pedigree’s own associations with product quality. Instead, Pedigree focused its messaging on a new association with a value that was not linked to the leading brand (or to any other major brand), yet had a strong emotional connection to dog lovers. The resulting campaign was highly successful. Often, disruption is not an option. In those cases, new brands are unlikely to succeed when simply following the strategy of the leader, which can maintain its “top of mind” status through simple emotional conditioning, using emotional connections, often in low-attention contexts, to reinforce positive associations and habitual buying triggers with its brand. Although there are exceptions, like the early Pepsi follow-the-leader strategy (see “Experiencing a brand,” earlier in this chapter), more often than not,

Chapter 9: Brands on the Brain new brands need to adopt a different approach, one that shifts consumers from an implicit decision-making process to an explicit decision-making process: ✓ They must grab conscious attention. ✓ They must explain why they should be considered for purchase, using deeper, more cognitively oriented messaging. ✓ They must engage and satisfy counterarguments that regularly accompany conscious analysis of marketing claims. They don’t have the luxury of using reinforcement through low-attention processing.

Using Neuromarketing to Test Brands As we observed at the beginning of this chapter, branding is a natural research area for applying brain science insights and neuromarketing methods. In this section, we introduce some of the methods being used by neuromarketers today. We include a section like this at the end of each of the next five chapters in which we explore different application areas.

If you find any of these short technology introductions to raise more questions than answers for you, they are all described in much more detail in Part IV, especially Chapters 16–18.

Measuring brand equity the old-fashioned way Unfortunately, traditional market research has not produced a generally accepted way to measure brand equity. Many vendors are promoting their own proprietary brand-equity measures, but because brands end up with vastly different scores for each measure, none is considered definitive. Most brand-equity measures depend in large part on accounting metrics such as market share, relative price, and lifetime customer value. Such measures are very useful for monitoring the progress of a brand’s marketplace performance, but they don’t shed light on the evolution of brand equity where it lives, in the mind of the consumer. Some explicit brand concept mapping methodologies are available, but these are limited by their dependence on conscious consumer deliberation to identify associations with brands in memory. Such approaches introduce biases

153

154

Part III: Neuromarketing in Action into the association-mapping process, because they encourage consumers to think about what connections should be made with a particular brand, instead of connections that naturally occur at a nonconscious level. This is why the study of brand equity in the consumer mind, along with its consequences for consumer behavior, is such an ideal fit for neuromarketing tools and techniques.

Probing brand connections with neuromarketing For neuromarketers, three key elements serve as a starting point for measuring brand equity: ✓ Associations: The nature and strength of the brand’s associations in memory ✓ Emotions: The emotional responses (positive-negative, arousal) triggered by the brand ✓ Motivations: The link between the brand and the consumer’s conscious and nonconscious goals Neuromarketing provides several ways to measure brand associations. Some of these approaches measure behavioral responses; others measure changes in brain states that accompany activating strong associations in memory. Behavioral approaches take advantage of a key property of associative activation in the brain (discussed in the section on priming in Chapter 5). When two ideas are closely associated in memory, activating one with an external cue (like presenting a word on a screen) makes activating the other easier and faster. So, the strength of association can be inferred behaviorally from various kinds of response-time studies (for more details on these techniques, see Chapters 16 and 17): ✓ Semantic priming: Two words are presented in rapid succession. The task is to classify the second word in some neutral way, such as whether it’s a real word or a fake word. The greater the association between the first and second words, the faster the participant will be able to classify the second word. ✓ Implicit Association Test (IAT): A more complex classification test in which words or images are associated with different combinations of brand attributes at the same time, using a forced choice task. Response times are faster when the brand and attributes are positively associated in memory, and slower when they conflict with each other.

Chapter 9: Brands on the Brain Brain state approaches measure changes in brain activity relating to the memory processes that get activated by strong associations in memory: ✓ Functional magnetic resonance imaging (fMRI): Studies using fMRI, such as the “Pepsi Challenge” study (see the “Experiencing a brand” section, earlier in this chapter), identify brain regions that attract greater blood flow when strong associations are triggered. ✓ Electroencephalography (EEG): Studies using EEG measure electrical signals in the brain associated with memory activation. A specialized application of EEG, called event-related potential (ERP) analysis, identifies brain-wave patterns — called ERP components — that emerge when sequentially presented words or images are strongly associated in memory. Several neuromarketing vendors use ERP components as part of their product offerings (for more on EEG and ERP, see Chapter 16). Emotions are hard to measure with traditional verbal reporting, but several approaches to measuring emotional responses to brands are used by neuromarketers. Most nonconscious emotional responses to brand-related materials are immediate and automatic, so their valence (positive or negative direction) and arousal (intensity or level of stimulation) are best measured in the moment, rather than in later behavior. Neuromarketing methods for measuring emotional responses to brands include the following: ✓ Affective priming: Similar to semantic priming, this behavioral technique uses pairs of words rapidly shown one after the other. The second word is classified as positive or negative. The speed with which it is classified is a function of the emotional response to the first word. ✓ Electromyography (EMG): Studies using EMG measure facial micro-muscle movements that occur below the level of observable expressions. Certain muscles (such as the “frown” muscle and “smile” muscle) are especially sensitive to emotional reactions. ✓ Facial expression analysis: Automatic classification of observable facial expressions is available through several software programs, some of which can be implemented through webcams, with more or less reliable results (see Chapter 16). Motivational goal activation by brands can be measured by neuromarketers both behaviorally and via brain measures: ✓ Behavior studies: As shown in Chapter 7 and the “Apple and creativity” study mentioned earlier in this chapter, participants can be primed with a brand in various ways and then exposed to an experimental situation in which their behavior indicates the extent to which that brand triggered specific types of goal seeking, either consciously or nonconsciously.

155

156

Part III: Neuromarketing in Action ✓ EEG measurement of approach-avoidance: Neuroscientists have found that relative activation of certain brain-wave frequencies in the left and right frontal areas of the brain are reliable indicators of approach and avoidance motivation. Both academics and neuromarketers have developed metrics that use this indicator to measure degree of motivation in response to exposure to brands. This technique measures the activation of an approach-avoidance response, but it does not directly measure behavioral results of the activation. These approaches can be used separately or combined in studies that use multiple measurement techniques to increase reliability by comparing different responses with each other.

Chapter 10

Creating Products and Packages That Please Consumers’ Brains In This Chapter ▶ Looking at the balance between standing out and fitting in on the shopping shelf ▶ Understanding what makes product and package designs emotionally compelling to the

brain

▶ Tackling the big problem of product innovation that so often fails ▶ Identifying neuromarketing principles and methods to apply in each of these areas

I

n this chapter, we look at how brain science and neuromarketing can help companies create products that people want to buy and packages that stand out on the shelf alongside dozens if not hundreds of alternatives. First, we examine the precarious balancing act between novelty and familiarity that optimizes a product’s ability to attract attention and consideration on the shelf. Then we reveal some general principles of processing fluency that can be applied to the challenging tasks of product and package design. Finally, we look at product innovation and the ongoing dilemma of why 80 percent of new products fail. Throughout the chapter, we show how brain science principles introduced in Chapters 5 through 8 can be applied to understand these very practical product and packaging questions, and how neuromarketing techniques can augment and reinforce traditional research techniques.

How New Products Get Noticed When a shopper approaches a typical shelf in a typical aisle in a typical grocery store or other retail outlet, he can easily find himself gazing at hundreds of different products and packages. Not only are different brands and products competing for attention on the shelf, but a single product may have

158

Part III: Neuromarketing in Action many variants. A popular laundry detergent, for example, might have 50 different packaging and ingredient variants displayed on the shelf together. In Chapter 9, we explain that established brand leaders and new brand upstarts have very different challenges when it comes to attracting consumers. Established brands have the advantages of familiarity, product experience, and habitual buying to maintain and grow their existing market share, while new brands must leverage novelty and persuasion to begin building their own market presence. Brands are intangible concepts that build value through creating and reinforcing associations in the brain, but the battle between new and established brands really begins in the tangible world of physical products and packages. In that world, a new product must first get noticed before it can be chosen and bought. And to do that, brain science tells us that it must find a “sweet spot” between novelty and familiarity, two automatic assessments our human brains assign to every object or experience we encounter through our senses (these reactions are described in detail in Chapter 5).

Standing out versus blending in The tension between novelty and familiarity is an old marketing battleground. Marketers know intuitively that too much familiarity leads to boredom and eventual consumer defection, while too much novelty causes a new product to be rejected because consumers can’t see how it fits into a product category they know well. This balance between novelty and familiarity relates to approach and avoidance motivations and is illustrated in Figure 10-1.



Figure 10-1: The spectrum from novelty to familiarity.

Illustration by Wiley, Composition Services Graphics

Ideally, a new product on the shelf wants to occupy the “interesting” point on the novelty curve — not so novel as to be overwhelming and not so familiar as to be the same as the established products. Similarly, the established product wants to occupy the “comforting” point on the familiarity curve.

Chapter 10: Creating Products and Packages That Please Consumers’ Brains If it becomes too novel (“interesting”) it can disrupt habitual buyers (as described in Chapter 9) and trigger variety seeking (a response that leading products generally want to avoid), but if it doesn’t refresh itself from time to time, it risks becoming boring, which also opens it up to challenges from alternatives.

Because products typically are part of a familiar category, we have to consider the product’s novelty or familiarity in relation to that category. A new product enhances its ability to stand out among more familiar competitors in its category if it can do two things:

✓ Be physically distinct enough to draw involuntary attention at the point of sale ✓ Signal — either implicitly or explicitly — the goals it helps the consumer achieve Let’s consider an example of how these factors may work together to help a new product stand out on the shelf. Imagine a consumer approaching her grocery store’s yogurt aisle, where a new yogurt product is present on the shelf. Yogurt is not a habitual purchase for her, nor does she have a product or brand preference in mind. Her initial scan of the shelf typically gives each package only a few milliseconds of gaze time. In that brief moment, the new yogurt needs to make its case — it either attracts her attention or gets passed over, unnoticed. Three package attributes are most important at this moment: color, shape, and brightness.

Although some colors (red, orange) and shapes (rounded edges, curvy) have natural attention-attracting capabilities, the key element for on-shelf standout is distinctiveness. A bright orange box would stand out in isolation, but not on a shelf of all orange boxes. An important consideration for testing new products and new packages, therefore, is to test them in a realistic shopping context. A neuromarketing test that measures attention to a product package in isolation tells you nothing about how much attention that product will attract on a crowded shelf. Standing out is important, but it’s only a first step on the path to purchase. The new yogurt can’t afford to be different simply for the sake of being different. It also must communicate meaningful signals that the consumer can interpret as addressing one of her goals. For example, the package of the new yogurt must easily convey attributes like freshness, tastiness, and healthy eating. This process can have both conscious and nonconscious aspects. At a nonconscious level, products, brands, and other cues in the shopping environment (like signs and displays) can all trigger nonconscious goal pursuit that may result in a consumer paying more attention to one product on a shelf than others. This type of attention is called bottom-up attention, because it occurs involuntarily as a result of the process of motivational priming

159

160

Part III: Neuromarketing in Action described in Chapter 7. Because it’s triggered below the level of conscious awareness, consumers can’t report if or to what extent it impacted their attention to a particular product. Nonconscious goal-priming is learned through the implicit memory process of conditioning (see Chapter 9). Over time, consumers become conditioned through marketing and product experience to associate particular features with certain qualities, benefits, usage occasions, or brands. Marketers use the term learned codes to describe these associations — the consumer learns the meaning of a particular signal being communicated by the product or package through repeated association of the signal with a particular attribute of the product. New products can take advantage of learned codes to increase their sense of familiarity. For example, light colors are associated in many markets with various kinds of physically light product attributes, such as reduced fat in a food product. Consumers know that a picture of rising steam communicates a hot bowl of soup, or that stretchy strands of melted cheese communicate tasty, hot pizza. Because of these learned codes, new products can establish some degree of familiarity in their parent category to counterbalance the new and different attributes they also bring to the category. At a conscious level, consumers also have explicit goals for a product like yogurt that the new product must anticipate in order to attract top-down attention. Unlike bottom-up attention, top-down attention is voluntary, controlled, and driven by conscious goals. In the yogurt example, the consumer comes to the yogurt shelf with existing knowledge, expectations, and goals regarding yogurt, including things like favorite tastes, favorite brands, and previous positive or negative consumption experiences with different yogurt products.

Together, these nonconscious and conscious factors set the stage for standing out and attracting attention in a store or aisle. But attention alone is not enough to move a consumer from noticing a product to buying it. The product must meet a third criterion in the mind of the consumer: Create and reinforce positive emotional connections through priming, processing fluency, or the activation of existing nonconscious emotional markers In the next two sections, we look at ways in which both positive and not-sopositive emotional connections can be activated for both new and established products.

Watching out for your neighbors Products are rarely displayed by themselves. They’re typically grouped into categories — physically in the retail outlet, as well as in the consumer’s mind. Consumers like categorization because it makes it easier for them to

Chapter 10: Creating Products and Packages That Please Consumers’ Brains make a choice. Whole categories can be eliminated and just one or two may be selected for an in-depth assessment instead of having to make a decision with respect to each individual product. Research has shown that consumers even prefer to have meaningless categories (such as A, B, and C) than no categories at all. Research suggests that consumers’ implicit reactions to the category in which a product resides can impact their emotional response to the product itself. For example, when a category is well defined in the consumer’s mind, products that conform to established category expectations (learned codes) benefit from processing fluency and are more liked. But when a category is ill formed and vague in the consumer’s mind (for example, think about when you saw your first iPod), novel products can draw more positive emotional responses if they help the consumer better understand the category and its structure. Context matters in another important way that operates completely outside conscious awareness, through a mechanism called product contagion. In Chapter 7, we describe goal contagion (a tendency for people to nonconsciously “catch” goals being pursued by others in their immediate vicinity). Researchers have identified a similar process operating with products on shelves and in shopping carts. Disgust is an emotion that has served humans well because it generally keeps us from getting too close to things that might contaminate us, like rotten food, blood, body parts, insects, worms, and so on. Today, many non-food products, such as cat litter, trash bags, diapers, and women’s sanitary products, have been found to evoke similar levels of disgust in consumers. Researchers have discovered that these reactions can be transferred to other products if those products are perceived as touching the disgusting product. “Contaminated” products are rated as less appealing and are less likely to be chosen than noncontaminated products. Some interesting details underlie this effect. For example, the products need to be physically touching for the effect to occur, the effect is greater for products that are in transparent containers, and consumers have no idea that their conscious evaluation of “contaminated” products are influenced by contact with other products in this way. This finding is also a reminder that the nonconscious factors driving consumer judgment and choice are not necessarily rational and can’t be explained in rational or logical terms. In this case, attributions of disgust are misplaced and unrealistic — none of these “disgusting” products is, in fact, unsafe or unclean in any way. Nor can contamination jump from one sealed package to another as the effect seems to imply. Yet the nonconscious is undeterred by these facts and realities. Consumers can have irrational views of what is disgusting and then apply irrational contagion beliefs to objects with which those products are believed to have come in contact. The connections that get accessed automatically by our nonconscious brains are not governed by logical if-then rules; they emerge from unexamined associations and attributions that we might find laughable if we evaluated them consciously.

161

162

Part III: Neuromarketing in Action

Leveraging emotional connections As discussed in Chapter 6, emotional responses — both positive and negative — can drive attention. This is especially true for emotional valence (the perception of an object as more or less liked). Marketers generally recognize that their products and packages can enhance attention in crowded environments like grocery store shelves by activating positive emotions using shape, color, form, symbolism, and other signals. What marketers may be less aware of is the brain science insight that positive emotional connections can also be invoked indirectly through priming, processing fluency, or the activation of existing nonconscious emotional markers (see Chapter 5). Consider the simple chair: Its shape, its materials, and the room in which it’s located may trigger associations with comfort, health, authority, prestige, nature, youthfulness, nostalgia, and much more. The likelihood that a consumer will notice one chair over hundreds of others in a furniture showroom is increased if — in addition to being visually distinctive and conforming with learned codes that match the consumers’ conscious or nonconscious goals — that chair also triggers an automatic positive emotional response. How positive and negative emotions enhance attention to everyday objects, including common household goods, is being studied in a new research area called micro-valence analysis. Using implicit response measures (see Chapter 17), researchers have begun to trace the subtle emotional responses that people have to seemingly neutral objects like coffee cups, teapots, chairs, clocks, lamps, and so on. What researchers have discovered is that even these ordinary objects evoke positive and negative micro-valence responses. Of particular interest for the intersection of products, emotions, and attention is the related finding that these responses play a crucial role in the way people scan and focus their gaze when viewing a visual scene. Micro-valences, although people are unaware of them, consistently bias where we look and where we focus our attention when scanning and navigating complex visual scenes. Micro-valences appear to emerge from an integration of perceptual fluency and learned associations. These two sources reinforce each other because it’s easier to develop a liking for an object that incorporates positive perceptual features. For example, a consumer might more easily develop positive associations with a shiny, curved, symmetrical teapot than a dull, angular, asymmetrical teapot. In the next section, we show how product and package designs can take advantage of positive associations based on processing fluency to enhance not only attention, but also preference and choice in consumer decision making. Sometimes a product can trigger emotional connections that aren’t typical for the product category. For example, the Italian “gadget” company Alessi (www.alessi.com) creates everyday items for use around the home and office like corkscrews, toothpick holders, nutcrackers, clocks, baskets, fruit bowls, or paperclip holders, adding fun and enjoyment through quirky design

Chapter 10: Creating Products and Packages That Please Consumers’ Brains elements, which often associate unexpected but meaningful and likeable properties with the product (see Figure 10-2). This is an excellent example of combining emotional triggers and novelty to increase attention and approach motivation.



Figure 10-2: Simple items can trigger emotions with surprising associations.

Photographs courtesy of Photo Alessi Archive

In some instances, the packaging rather than the product is what needs to leverage emotional connections to attract attention at the point of sale. Perfume is an example of a product that’s difficult to distinguish visually but can stand out through distinctive packaging designed to trigger a wide range of associations like sexy, youthful, intriguing, powerful, desirable, confident, playful, eclectic, stylish, traditional, and so forth. To the extent that these associations align with consumers’ goals and learned codes, they can enhance both top-down and bottom-up attention to the package.

Because these positive associations are often nonconscious in nature, they can be resistant to traditional self-reported response measures. Academic researchers and neuromarketers can measure a number of attributes and associations to provide a clearer picture of emotional responses and attention to products and packages in shopping contexts:

✓ Familiarity: Familiar products are less likely to be noticed because of their packaging but more likely to attract attention because of consumers’ prior experience with them or repeated marketing exposures. ✓ Processing fluency: Easy-to-process products and packages can compensate for the negative emotional responses that often accompany novelty by creating a sense of familiarity and trust in the absence of actual prior experience or repeated marketing exposure.

163

164

Part III: Neuromarketing in Action ✓ Approach and avoidance: Emotional micro-valences can influence consumers’ focus of attention and likelihood to select different products. ✓ Nonconscious and conscious goal activation: Products and packages can act as primes to trigger nonconscious goal pursuit. Alignment with learned codes can attract top-down attention and better position a product to satisfy conscious purchasing goals. These neuromarketing approaches provide new ways to explore the nonconscious roots of emotion and attention during shopping. They help researchers identify and assess the signals that products and packages send to consumers through subtle design elements like style, color, shape, material, feel, and scent. They provide new metrics for estimating the degree to which a new product or package is making an emotional connection, addressing consumer goals, and standing out on a shelf or display area alongside dozens of competing products.

Neurodesign of Everyday Things Neuromarketing focuses on understanding how the nonconscious mind influences conscious judgments and decisions. Certain kinds of nonconscious responses, like the degree to which an object can be efficiently and easily understood in the mind (processing fluency), get translated into positive or negative emotional reactions toward that object, or to a feeling of familiarity. Some researchers have begun exploring this relationship from the object side rather than the brain-response side, asking if particular attributes of objects make them more or less easy to process and, therefore, more or less likely to evoke positive emotional responses. Asking these questions has led to a neuroscience subfield called neurodesign, the study of common design elements of physical objects that people tend to view as beautiful, aesthetically pleasing, and attractive. This work has come to the attention of neuromarketers and has been used to develop insights about design principles for products and packages, as well as new tests to identify winners and losers among candidate designs.

We’re hard-wired for good design A consumer in a kitchenware shop, looking at displays of coffee cups, glassware, or cutlery, is drawn to some of the products on display while others are immediately excluded from consideration. The same happens when looking across dozens of yogurt containers in the supermarket cooler or when browsing in a furniture or toy store. Consumers have immediate reactions — positive or negative — as they scan a range of alternatives in a shopping situation. Brain science helps us

Chapter 10: Creating Products and Packages That Please Consumers’ Brains understand not only how and why these reactions occur (processing fluency, familiarity, novelty, priming), but which characteristics of the items on display tend to trigger those positive or negative reactions, and most powerfully impact the choices and actions that follow from them. Not surprisingly, researchers who look at the evolution of the modern human brain find some compelling evolutionary reasons for many of our natural approach or avoidance responses. For example, in a 2006 study, researchers at Harvard Medical School showed that humans have an innate preference for curved objects compared to pointy objects. Across a wide range of categories (watches, couches, industrial products, abstract designs, font styles, and so on), they found that people preferred curved to sharp-edged items. They also found that this effect occurred not just with objects whose sharp edges had an association with danger (like knives and scissors) but for neutral objects as well (like couches and fonts). The authors suggest that this effect, which seems to be a part of impression formation and precedes conscious evaluation of the object, may be an evolutionary mechanism that helps us learn the difference between objects that promote safety and objects that represent potential threats. This automatic nonconscious emotional response can be seen as part of the brain’s adaptive “early warning system” that protected our ancestors from thinking too much in the face of danger. As with the discussion of disgust and product contagion earlier in this chapter, this association of pointy things and danger is often irrational in the modern world — accounts of people being attacked by sharp-edged couches are rare. But today these mechanisms play a different role that’s crucial for marketers and product designers to understand. They impact what we notice, what we like, and ultimately, what we buy.

Design tips from the lab Research on the topic of design and processing fluency is extensive. Much of it has emerged out of work addressing a much loftier question: What is beauty? Theories about the nature of beauty used to revolve around two diametrically opposed views. On one side, the objectivist view argued that beauty was a property of an object that produces a pleasurable experience in a person perceiving that object. On the other side, the subjectivist view argued that beauty was relative and could be found only “in the eye of the beholder,” so it must change over time and may be different in different cultures. Research in social psychology has proposed reconciling these two views by invoking the idea of processing fluency. In a series of studies led by Rolf Reber, Norbert Schwartz, and Piotr Winkielman, evidence has been compiled

165

166

Part III: Neuromarketing in Action to show that many objective attributes associated with beauty operate on people’s subjective evaluations because they support processing fluency. In other words, beauty has both objective and subjective sources. Whether applied to art or everyday objects, this insight has profound implications for design. In the world of product and packaging design, it implies that consumers are hard-wired to prefer designs that can be processed with minimum effort. Here are some of the key objective features of physical objects that have been found to lift processing fluency, perceived attractiveness, and preference: ✓ Conservation of information: Objects containing less information are easier to process and tend to be judged as more attractive than objects containing more information. Repetitive visual patterns, for example, minimize the amount of information that must be processed to form an accurate impression of an object. ✓ Symmetry: Objects that are symmetrical around a horizontal, vertical, or diagonal axis contain less (non-redundant) information than asymmetrical objects, so they’re easier to process and usually preferred. Vertical symmetry is easier to process than horizontal, which, in turn, is easier to process than diagonal, so objects arranged vertically are likely to be more appealing than objects arranged horizontally or diagonally. ✓ Contrast and clarity: Figure-ground contrast is the term used to describe the extent to which an object is clearly distinguishable from its background. Higher figure-ground contrast improves perceptual fluency and, therefore, contributes to judged attractiveness. Similarly, objects with crisp, clear lines are easier to process and are judged as more attractive than objects with blurry or indistinct lines. Additional research has shown that these features only lead to greater liking and judgments of attractiveness when they contribute to processing fluency, but they fail to have this effect when they do not. For example, figure-ground contrast should be more helpful for processing objects when they’re viewed for short periods of time, but not so much when they’re viewed for longer periods. Testing this hypothesis, researchers found that more contrast increased judgments of attractiveness when objects were viewed for less than a second, but didn’t when they were viewed for ten seconds. Other factors that lift processing fluency, perceived attractiveness, and preference have less to do with the objective features of an object and more to do with a person’s experience and prior exposure to the object: ✓ Repeated exposure: According to the mere exposure effect (see Chapter 5), the more often we’re exposed to an object — almost any object — the more familiar it becomes and the easier it is to process. As a result, we tend to like it more and perceive it as more attractive compared to objects we’re less familiar with.

Chapter 10: Creating Products and Packages That Please Consumers’ Brains ✓ Implicit pattern recognition: Objects are easier to process when their structure is understood. People’s liking of complex visual patterns is higher when the pattern is predictable than when it isn’t. Sentences that follow known grammatical rules are easier to process than sentences that violate grammatical rules. ✓ Typicality (average or ideal form): Items that represent an average or ideal version of a category are easier to process and more liked than items that are less typical. This has been shown to hold for a wide variety of objects, including color patches, music, works of art, and human faces. ✓ Priming: As discussed in Chapter 5, objects that are preceded by an associative prime are more easily processed than non-primed objects, tend to be more liked than non-primed objects, and may even be judged as more familiar than they really are. This effect highlights the importance of context on judgments of attractiveness and liking. Expectations play an important role in translating processing fluency into a subjective experience of liking or preference. Researchers have found that fluency has a more powerful impact on liking when its source is unknown and the experience of fluent processing comes as a surprise. In both experimental and real-world settings, if people are aware of the origins of processing fluency, such as an obvious repetition scheme or very simple predictive pattern, fluency’s impact on perceived attractiveness, liking, and preference may be muted. Also, the effect of fluency on subjective judgments and preferences may be diminished if the experience is attributed to an irrelevant source. For example, the usual effect of repetition on perceived liking disappears when people are told that they may like some items more because pleasant music is playing in the background. Designers of products and packages can take away several lessons from these brain science findings. Most important, some design elements are objectively more attractive and aesthetically pleasing to the human brain than others. People prefer rounded edges to sharp edges, simple to complicated designs, symmetrical to asymmetrical shapes, and high-definition contrast and clarity to indistinct shapes and blurry boundaries. But experience and learning, which vary from person to person, also play important roles in aesthetic responses. People are more likely to be attracted to items that they see repeatedly, that are structurally understandable, that are average or typical for their category, and that are primed by contextual information that makes them more expected.

Beauty is in the wallet of the beholder Aesthetic attraction wouldn’t be relevant to marketing if it didn’t translate into consumer decisions and actions.

167

168

Part III: Neuromarketing in Action Apple is often held up as the best example of how good design can translate into exceptional performance in the marketplace. Although there are many elements in Apple’s formula for success, product design is clearly one of them. When Apple introduced the iPod in 2001, it was a $5-billion-per-year computer company. In 2011, following the introductions and several generations of iPhones and iPads, along with new computer designs like the MacBook Air, it was a $150-billion-per-year company. Apple designs across its product lines consistently embody the three aesthetic principles that contribute to processing fluency: conservation of information, symmetry, and contrast and clarity. Apple favors rounded corners, too. Similar expressions of processing fluency are seen in many other successful product designs, such as those from companies like Bang & Olufsen, BMW, and IKEA. In each of these cases, distinctive product designs are not the only source of the company’s success, but they’re part of a larger pattern of brand connotations and associations that together build a strong brand concept in the consumer’s mind. Apple’s design innovations are naturally reinforced by its strong association with creativity, for example (see Chapter 9). The impact of product and packaging design on sales can also be illustrated by negative examples. An especially painful case occurred in 2009 for the orange juice brand Tropicana. Seeking to create a new package design that would reinforce the product’s attributes, Tropicana introduced a radical package redesign that replaced the brand’s iconic “orange with a straw coming out of it” central image with a half-revealed glass of orange juice. The new design was launched with heavy marketing, but after two months on the shelf, sales of Tropicana dropped 19 percent, or $33 million, with competitors picking up the lost market share. The company quickly withdrew the new package and reinstated the old one, at a huge (unrevealed) cost. Significantly, when the old packaging reappeared, sales quickly returned to their old levels. A number of factors may have led to this disaster. Many consumers buy orange juice habitually. Although the company claimed the new packaging failed because consumers had a previously unappreciated (by Tropicana) emotional bond to the old packaging, a neuromarketing assessment probably would’ve revealed that the new package simply got lost among its competitors in the orange juice cooler. The radical change in the appearance of the package made it hard for shoppers engaged in a relatively automatic process to find it, which disrupted their habitual purchasing pattern and triggered a considered purchase decision of an alternative product. A relatively simple neuromarketing test using eye tracking to trace the gaze patterns of shoppers viewing shelf images with the new and old packaging in place, and then asking them what product on the shelf they would buy, could’ve tested this hypothesis early on in the package design process. If Tropicana marketers and researchers had been more aware of the dynamics

Chapter 10: Creating Products and Packages That Please Consumers’ Brains of habitual shopping and the importance of implicit decision making in their category, they may have demanded such a simple perceptual test as part of their evaluation process.

Our point is not to pick on the good folks of Tropicana, whose orange juice is delicious and a favorite of all three authors of this book (for our discussion of product placement, see Chapter 14), but rather to emphasize that sometimes a neuromarketing perspective provides a simpler understanding of consumer behavior than a more traditional research approach. Perhaps the answer in this case is not a complicated story about people’s conscious emotional attachments to brand icons and logos, but simply the fact that people couldn’t find the new package on the shelf because Tropicana had inadvertently removed the primary cues by which habitual selection occurred.

Neuromarketing and New Product Innovation New products are the lifeblood of brands, but more than 80 percent of new products fail, sometimes with a devastating impact on the company’s balance sheet. In this section, we explore why new products fail and what can be done to lift the success rate, drawing on neuromarketing insights, concepts, and methodologies.

Why 80 percent of new products fail People are terrible at predicting what they’ll do in the future. Research has shown that more than 90 percent of consumers who go on a diet give up the diet and put the weight back on within a year. Similarly, most people don’t follow through with their New Year’s resolutions, despite the sincerity with which they make their plans and commitments on New Year’s Eve. Apply these lessons to the typical product evaluation focus group. A dozen or so consumers spend 90 minutes in a group discussion, usually dominated by one or two “alpha participants” who feel their opinions are more important than anyone else’s. Toward the end of the session, the moderator asks everyone how likely they are to buy the new product they’ve been discussing. In addition to their general inability to predict what they might do, their answers may be primed by the money they received for their participation, their desire to appear intelligent and insightful, and the fact that they just spent 90 minutes talking about a product they would normally waste little time thinking about.

169

170

Part III: Neuromarketing in Action It isn’t surprising that predictions based on traditional market-research techniques such as focus groups often turn out to be less than accurate. Here are some classic examples of successful products that never would’ve seen the light of day if someone hadn’t chosen to ignore the dismal focus group results: ✓ The Herman Miller Aeron chair was rejected in every market research study, yet when launched, it became the best-selling office chair ever. ✓ Baileys Irish Cream was rejected by consumers in group after group, but it developed into a huge and enduring success when launched. ✓ Researchers told Bang & Olufsen that they could expect to sell 65 units of a new sound system, which, once launched, became its best-selling product. ✓ More than 80 percent of Australian consumers said they would never use an automated teller machine (ATM) when research was conducted prior to their introduction. Today, more than 80 percent of Australian consumers use ATMs on a regular basis. ✓ One of the most popular products in history, the Sony Walkman, was rejected in every market research study but went on to revolutionize the way consumers listened to music while on the move. Results like these have been repeated over and over again. Consumers appear to be just as bad at predicting what they will like as they are at predicting what they won’t like. With an 80 percent failure rate, traditional marketresearch methodologies are in serious need of some assistance. Brain science provides some explanations, and neuromarketing provides some alternative approaches worth considering.

Overcoming bias against the new Novelty draws attention, but familiarity instills comfort. Processing fluency promotes liking, creates an impression of familiarity, and encourages approach motivation. Novelty violates expectations, promotes vigilance rather than comfort, and, therefore, is associated with caution and avoidance motivation. Novelty also triggers learning, because we try to absorb the lessons of the new and commit those lessons to memory. In summary, these workings of the human mind reveal that we’re hard-wired to notice new and different things, we focus conscious attention on them, but we tend to distrust them. Over time, as novelty gives way to familiarity and vigilance is replaced by comfort and habit, new things become a part of our everyday lives. But they don’t start out that way. Within these relationships and associations between novelty, familiarity, vigilance, comfort, learning, motivation, and habit, the brain science explanation

Chapter 10: Creating Products and Packages That Please Consumers’ Brains for our inability to predict our future likes and dislikes becomes clear. We simply don’t know how and when today’s novelty will translate into tomorrow’s familiarity. But all is not lost for product and package designers. After all, consumers accept new and innovative products all the time. Old product leaders get displaced and new leaders arise. Whole new categories appear on the scene and sweep the old and familiar aside. How does product innovation overcome our built-in bias against the new?

Researchers studying the relationship between novelty and liking in product design have identified a path out of the apparent dilemma — moderate levels of innovation tied to recognizable elements of familiarity. The most accepted innovations are those that don’t radically breach expectancies but offer just enough “newness” in a familiar context to break the monotony of too much familiarity. In what might be called a Goldilocks effect, three key innovation response variables — attention, recall, and liking — have been found to be lowest when an innovation is either insignificant (that is, changes things too little) or disruptive (that is, changes things too much), and highest when an innovation is seen as in between those extremes, neither too big nor too small. A number of studies in different product categories like furniture, kitchen appliances, and cars have replicated these results. In a 2012 study in the International Journal of Design, researchers found that when participants evaluated a set of chair designs with different levels of novelty in three dimensions (trendiness, complexity, and emotional engagement), the relationship of novelty and aesthetic preference formed an inverted U-shaped curve on each dimension. Chairs rated near the middle on trendiness, complexity, and emotional engagement were all seen as the most aesthetically pleasing.



So, one path out of the innovation dilemma is to moderate the level of innovation so as to avoid violating consumers’ current expectations and familiar associations. A second path is to use design insights and marketing messages to create new associations and a new definition of what is familiar, so that even the most disruptive innovation appears familiar and comforting, even though it is, in fact, brand-new. There are three neuromarketing keys to this approach:

✓ Use design principles that lift processing fluency. ✓ Use messaging (advertising and other marketing communications) to establish new associations between the new product and existing consumer expectations, needs, and wants. ✓ Use repetition to reinforce familiarity and liking through the mere exposure effect.

171

172

Part III: Neuromarketing in Action When a product is unfamiliar, designers are well advised to include as many familiar design touchpoints as possible. For example, the success of the iPhone and iPad may be due in part to the products mimicking the way consumers are familiar with turning pages in magazines. This familiarity not only makes navigation more intuitive, but also helps trigger positive emotions associated with relaxing with a magazine and a cup of coffee. The importance of repetition has been documented in many studies. For example, when consumers are exposed to an innovative product for the first time, they tend to favor the familiar. But when they’re exposed to a previously rejected innovation again after a period of time, they tend to prefer the new to the familiar. Studies have confirmed this repetition effect using objective measures (electrodermal activity), as well as subjective ratings by consumers. These findings underline the importance of familiarity and associated processing fluency for increasing perceived liking of new and innovative products. In the next chapter, we drill down into the relationships among repetition, association building, and advertising to identify ways in which new product ideas can break through the clutter of existing, familiar products to gain consumer acceptance and market share against strong brand and product leaders.

Using Neuromarketing to Test Product and Package Designs Two neuromarketing methodologies are especially well suited for product and package testing: eye tracking and forced-choice testing. Each of these methods can be supplemented by more complex (and more expensive) brain and body measures to gain additional understanding of the emotional underpinnings of gaze and choice behavior, if such deeper insights are required by the research questions being asked.

The eyes have it: Eye tracking and design testing Because much of the purpose of product and package design is to attract attention, eye tracking is a natural technology for testing. Modern eye-tracking solutions provide a real-time record of where and when visual attention is directed, as well as how pupil dilation changes over time, a useful indicator of emotional arousal.

Chapter 10: Creating Products and Packages That Please Consumers’ Brains Eye tracking records three main types of eye movement data that provide a glimpse into the mental processes that underlie eye movement while looking at an object or scene, such as a product in isolation or a store shelf full of competing products: ✓ Fixations: These are moments when eye movement is relatively stationary. Fixations tend to be associated with information acquisition. The frequency, locations, durations, and order of fixations are all useful measures for understanding how attention is being allocated while viewing an image. ✓ Saccades: These are rapid eye movements from one point in a scene to another. Information acquisition isn’t occurring during saccades, but different types of saccades provide clues to engagement and effort in interpreting an image. For example, saccades that backtrack to points in an image previously viewed may indicate confusion or processing difficulty (lack of fluency). ✓ Blink rate and pupil size: If brightness doesn’t vary while viewing, pupil dilation can be a measure of interest or engagement. Blink rates are also indicative of mental processes. Slower blink rates can indicate processing effort, and faster blink rates can indicate fatigue or confusion. Eye-tracking data is critically dependent on the task that the viewer is performing. If consumers aren’t given a specific task while viewing an image, they’ll make up one of their own. This is why eye-tracking results based on instructions to “just look at this image for ten seconds” tend to be meaningless. In such a case, viewers usually assign themselves an “amateur detective” task, in which they try to figure out what might be hidden in this image that the researcher wants them to find. Of course, this is a completely unrealistic task compared to what people do in real shopping contexts. The two most important types of tasks consumers perform while shopping are search tasks and choice tasks. In product and package testing, search tasks usually ask consumers to “find the product on the shelf.” When a consumer is engaged in such a task, eyetracking results become meaningful and informative. Measuring the “time to first fixation” on the target product is a simple and intuitive indicator of product standout in a competitive set. By varying the size and number of items in the surrounding shelf, and comparing search times in the different contexts, a measure of bottom-up attention can be calculated based on how much longer it takes to find the target item as context size increases. Choice tasks ask consumers to make a selection or judgment from a set of alternatives, displayed either together or individually. A product “lineup” image is often an excellent source for eye-tracking analysis. How viewers

173

174

Part III: Neuromarketing in Action scan the image when asked to select the “best” or the “worst” package can be highly informative, above and beyond the actual choice. When viewing package images individually, eye tracking will reveal different information if consumers are asked different questions (giving them different choice tasks). Researchers have found, for example, that people will scan a package much differently when asked “How attractive is this package?” than when asked “How likely would you be to buy this product?”

Choosing in the blink of an eye Another neuromarketing technique that’s very useful for evaluating product and package designs is forced-choice testing. In this type of test, consumers are shown images that may differ by only one or two attributes, such as ketchup bottles that are identical except for different-shaped tops or different-colored labels. These images are usually presented two at a time on a screen. Viewers are asked to pick the one they like the best, and to do so as quickly as possible. The rapid response requirement forces people to rely on their immediate “gut reactions,” thus diminishing the role of conscious deliberation and increasing the impact of nonconscious processes. By creating a sequence of rapid comparisons that vary a small number of attributes at a time, and then reassembling the results into an overall assessment of complete design alternatives, this approach can bypass many of the self-reporting biases that cause overall product or package assessments to go awry. Forced-choice results are easier to interpret than brain or body measures because they represent actual behavior. This technique has been used to test many aspects of products and packages, including different designs, different elements within a single design, micro-valences, and price sensitivity.

Eye tracking and forced-choice methods can also be combined with brain or body measures to provide more detailed testing of the underlying mental mechanisms that are driving the observed behavioral results. Combining eye tracking with electroencephalography (EEG) or functional magnetic resonance imaging (fMRI), for instance, can provide additional insights into whether fixations are associated with engagement or confusion. More details on these methods are provided in Chapters 16 through 18.

Chapter 11

Advertising Effectiveness In This Chapter ▶ Distinguishing between two views of how advertising works ▶ Understanding challenges to the traditional model of advertising effectiveness ▶ Seeing how ads can be effective even when we aren’t paying much attention to them ▶ Learning how ads can impact brand attitudes and sales without containing a persuasive

message

P

eople have a love-hate relationship with advertising. On the one hand, they record their favorite TV programs with digital video recorders (DVRs), largely so they can fast-forward through the commercials. On the other hand, they tune in to the Super Bowl every year almost as much to watch the new commercials as to watch the game. Advertising is also the subject of a huge volume of research, both academic and commercial. It’s a complex and multifaceted topic. So, in this chapter we focus only on TV advertising, which is still where most advertising dollars are spent. In later chapters, we look into in-store advertising (Chapter 12), online advertising (Chapter 13), and product placement advertising in movies and TV programs (Chapter 14). Our overview of advertising considers three big questions that neuromarketers and traditional market researchers tend to answer differently: ✓ What is the purpose of advertising? ✓ How does advertising achieve its purpose? ✓ How can we best measure advertising effectiveness?

Two Views of How Advertising Works If you ask an experienced traditional market researcher what advertising is for, you’ll probably get a long and nuanced answer, but the gist of the response will be that the purpose of advertising is to increase sales. How

176

Part III: Neuromarketing in Action this is done is a function of persuasion, and persuasion is a function of attention, logical argument, and learning. He may mention emotional appeal, but he mostly views it as something that helps information transfer. Advertising works at the point of sale through recall — the consumer recalls the logical argument communicated in the advertising and buys the product. If you ask a neuromarketer with a grounding in brain science the same question, you may get a very different answer. She would assert that the purpose of advertising is also to increase sales, but indirectly, by first creating positive associations with a brand or product in memory. How this happens is through conditioning, not overt persuasion. Conditioning is a function of emotional connection, repetition, and implicit learning. She may mention attention, but she may see it as an obstacle to ad effectiveness. Advertising works at the point of sale indirectly, through priming — seeing the brand in the store primes the emotional associations created by the advertising, increasing attention and likelihood to buy the product. And priming works best if advertising has succeeded in increasing familiarity, processing fluency, and liking for the brand on the shelf. These are very simplified descriptions, but they highlight the key differences between the two views of advertising we identify in this chapter: ✓ The direct route to advertising effectiveness: Emphasizing attention, conscious processing, logical argument, explicit recall, and sales ✓ The indirect route to advertising effectiveness: Emphasizing emotional connections, nonconscious processing, priming, implicit memory, brand attitudes, and sales These views are sometimes presented as mutually exclusive, but we believe they’re complementary. Each may be the more realistic model in different circumstances, for different types of products, or for different consumers. When considering an advertising research project using either traditional or neuromarketing methods, make sure you and your research partner share a common definition of advertising effectiveness. Similarly, when working with a neuromarketing vendor or consultant, make sure you’re aligned on whether the direct or indirect route best captures your objectives for the advertising you’re testing. This will make designing studies much easier and will prevent disappointments and confusion down the line when results are presented.

The direct route: Impacting the sale directly The historical roots of the direct route to advertising effectiveness are found in the classic persuasion models discussed in Chapter 2, including the AIDA model that defines persuasion as a four-step process of grabbing attention, generating interest, instilling desire, and enabling action (the purchase).

Chapter 11: Advertising Effectiveness According to this view, the purpose of advertising is to communicate a simple and logical argument that persuades consumers to buy a product, either by reinforcing their current preferences for that product or by changing their preferences from a competing product. The role of creativity in advertising is to get consumers to pay attention to these arguments, because high attention drives later recall, which is required at the point of sale to complete the connection between the ad and the sale. The direct route describes a process of persuasion and choice that is very much in the tradition of Kahneman’s System 2 thinking: It’s conscious, deliberate, effortful, and logical. As we explain in Chapter 2, this view is based on several assumptions (called the rational consumer model) that have been challenged by recent work in neuroscience, social psychology, and behavioral economics. To be clear, concerns about this approach are not derived from any doubts about whether the persuasion path it describes is psychologically possible. Numerous studies have shown that this path can work, and does work, in a wide variety of circumstances. The issue is that consumers, in their normal and everyday shopping and decision-making mode, generally do not engage in the kind of conscious thinking and logical decision making the model ascribes to them. So, the problem is not that they can’t be influenced by advertising in the manner described, but that they usually aren’t. Here are some issues that have been identified in the direct-route model: ✓ People normally pay little attention to most TV advertising. ✓ People are usually unable to recall specific aspects of an ad. When they do recall successfully, they’re more likely to recall storylines and characters than product claims and verbal arguments. ✓ People have built-in resistance to advertising claims. If they do pay attention to claims, they tend to evaluate them in terms of counterarguments. ✓ In real-world shopping contexts, people generally don’t incorporate ad claims into their decision making. Instead, they rely on heuristics (judgment and decision-making shortcuts) and habit to make most purchase decisions. ✓ Attributing sales to advertising is a tough case to make. With the exception of a small minority of cases, advertising does not have a large impact on sales (see the nearby sidebar, “Impacting sales with advertising isn’t easy”). These challenges to the direct-route model do not invalidate it. However, we believe they do indicate that it has more limited applicability than might originally have been assumed. Within its realm of applicability, the model provides good explanations and predictions. Extensive ad research shows

177

178

Part III: Neuromarketing in Action that consumers are more likely to process ads with attention and conscious evaluation, and make purchase decisions based on arguments and claims, when ✓ The product being advertised is new or contains novel features (for example, Dyson vacuum cleaners compared to traditional vacuum cleaners). ✓ The product’s category is new (for example, any new technology such as smartphones, tablet computers, or 3-D TVs). ✓ The product is expensive and purchased infrequently (for example, cars, home mortgages, or appliances). ✓ The purpose of the ad is to generate a direct response rather than a delayed sale (for example, ads soliciting charitable donations or infomercials designed to persuade viewers to “call right now”).

Impacting sales with advertising isn’t easy It may seem obvious that the purpose of advertising is to increase sales of the advertised product, but the reality is more complex. First, as we describe in Chapter 2, although a few ad campaigns have big effects on sales, most do not. Advertising spending is an expensive contributor to sales — on average, a 1 percent increase in advertising spend produces only a 0.1 percent increase in sales. Price discounts, in comparison, have 20 times the impact on sales. But averages can be deceiving. In an influential study published in 1995 by John Philip Jones, exposure to ads for 78 brands across 2,000 U.S. households was compared to actual sales over a two-year period. Jones measured the difference in sales for one week following presentation of an ad on TV. He found that, on average, households that saw an ad bought 24 percent more of the advertised product than households that did not see the ad. So, advertising clearly worked in this study. But the surprising finding was the wide variations in these results. The top 20 percent of

ads increased sales by 98 percent compared to households that did not see the ads. Those were the big winners. But the bottom 20 percent of ads actually generated lower sales, 18 percent lower than the non-exposed households. In the middle, the next-to-lowest 20 percent of ads had no effect on sales (0 percent difference), the next 20 percent had 12 percent higher sales, and the next-to-top 20 percent had 30 percent higher sales. So, most of the benefits of advertising went to the top 40 percent of ads (and most of that to the top 20 percent of ads), while 20 percent of ads did a little better than break even, and 40 percent of ads actually had a negative effect on sales, or no effect at all. In some cases, advertising can’t increase sales because all competitors are advertising so heavily that their efforts essentially cancel each other out. But there is still a lot of wasted advertising in these numbers. If traditional advertising research could accurately predict the actual sales impact of all those ads, many of them might never have been run.

Chapter 11: Advertising Effectiveness

The indirect route: Changing and reinforcing attitudes toward the brand In contrast to the direct route, the indirect route to advertising effectiveness is a two-step model:

1. Advertising affects brand equity in the form of changing attitudes, memory, and intentions toward the brand.



2. Brand attitudes and associations impact sales at the point of purchase. Ads build brand equity (see Chapter 9), and brand equity drives purchase behavior. From a marketer’s perspective, one important benefit of the indirect route as a way to look at advertising effectiveness is that it identifies more marketing checkpoints between an ad exposure and a product purchase. These are points where marketing can be measured and, if required, adjusted. Rather than trying to connect ads directly to sales, putting brand equity in the middle makes it easier to connect the pieces. First, changes in brand equity can be more directly linked to ads, because they occur in the mind of the viewer as a result of watching the ad. Second, the connection between brand equity and various aspects of market performance (including, but not limited to sales) is more direct as well. As we illustrate in Chapter 9, brand equity can affect brand performance in a number of measurable ways, including having a powerful impact on expectations, goals, fluency, and values, which in turn have been shown to impact decision making and buying behavior directly. According to this view, the purpose of advertising is to improve brand equity. This impact is achieved through conditioning, an implicit learning process in which a positive emotional connection with the brand is created and reinforced by advertising. Conditioning operates through repetition, so ads must be seen several times for conditioning to occur. Later, at the point of sale, the positive emotional connection is activated when the brand is encountered, and from there it can influence choice and purchasing behavior. The indirect route describes a process of priming and choice that is very much in the tradition of Kahneman’s System 1 thinking: It’s largely nonconscious, automatic, effortless, and driven more by emotion than logic. Research has shown that the indirect route tends to work best when

✓ The product being advertised and its category are well established and familiar (leveraging existing emotional connections, familiarity, and processing fluency). ✓ The ad minimizes information and message content and focuses on an engaging narrative in which the brand plays a central role (reinforcing the emotional connection while minimizing counter-arguing).

179

180

Part III: Neuromarketing in Action ✓ The product is inexpensive and purchased frequently (and less likely to trigger deliberation and explicit decision making). ✓ The ad isn’t meant to produce a direct response in the viewer, but is aimed at building or reinforcing longer-term associations with a brand.

Driving the Direct Route to Advertising Effectiveness In this section, we look more closely at how the direct route is believed to lead to advertising effectiveness, and summarize what recent brain science research has to say about how and when the model should work well, or not so well. The direct route is basically the model of advertising effectiveness that smart people would’ve come up with if they hadn’t known the nonconscious mind existed. And that’s pretty much what happened. Imagine your conscious mind looking at itself and asking, “How could advertising influence me?” The direct route would be a very good answer. If you believe the human mind is rational and logical, it follows that you would expect it to be most persuaded by logical arguments. Because arguments can be expressed either in words or in images (product demos in ads are a form of persuasive argument), you would look for just the right words or illustration to express your argument, something along the lines of saying or graphically implying, “If you want A, then you really must buy my product, B.” So you would focus on communicating that argument as your first task in creating an effective ad. You would quickly realize that you could create the most persuasive argument imaginable, but it would be useless if nobody heard it. Your message would need to be noticed, which is to say, people would need to pay attention to it. And even then it would still be useless if they didn’t remember it when they went shopping. So, three main questions naturally arise if you want to make sure your ad is successfully driving along the direct route to advertising effectiveness: ✓ Does it draw people’s attention? ✓ Are they persuaded by its argument? ✓ Will they remember it?

Chapter 11: Advertising Effectiveness Today, we know a lot more about how the brain operates, including how it relies on nonconscious as well as conscious processes. We’re a lot less confident about asking our conscious minds to explain how our brains work. So, let’s take a closer look at each of these questions in light of recent brain science findings.

Pay attention, I’m talking to you Attention is one of those psychological concepts that appears at first to be simple but then quickly becomes quite complicated. We believe we know when we’re paying attention and when we aren’t, but researchers have found that attention comes in different flavors. Two very different kinds of attention have been identified: ✓ High attention: A state of alertness in which you’re actively and voluntarily focusing and maintaining your attention on a particular object. This is what people usually think of when they think of attention. ✓ Low attention: Involves much less active mental control. It consists of passively monitoring objects and events in your environment, often without much awareness of doing so. You only become aware of low-attention processing when something happens that escalates it up to high attention, such as when you hear your name spoken in a crowded room. High attention and low attention are related to, but different from, the concepts of top-down attention and bottom-up attention introduced in Chapter 5. Both top-down and bottom-up attention are mechanisms by which we can be brought to a state of high attention. Low attention is a state of passive monitoring of our environment that allows external events to trigger bottomup attention. Low attention is also the mode of attention we allocate to other things when we’re paying high attention to one thing. High attention is what many advertisers have traditionally assumed advertising must achieve to be effective. But as we’ve seen, viewers are seldom engaged in high attention when they see ads in a natural setting. Instead, most of the attention we devote to advertising is now understood to be low attention, not high attention. It shouldn’t be that surprising that high attention would be a lofty aspirational goal for most advertising. After all, we’re exposed to approximately 3,500 to 5,000 ads every day. It would be disastrous for all our other daily goals if we had to pay active attention to all of them. So, we’ve developed some natural resistance strategies in our nonconscious (or pre-attentive) processing of ads. We filter them out. We activate corrective goals against efforts to persuade us.

181

182

Part III: Neuromarketing in Action

In many circumstances, high attention to advertising may not be such a good idea. Ads are usually interruptions. They’re a nuisance we put up with to get other things we want, like TV shows or online videos. So, our default response to any ad that grabs our attention is just as likely to be negative as positive, which is exactly the emotional connection that advertisers want to avoid for their products and brands.

You are now officially persuaded We devote a section of Chapter 8 to the limits of persuasive messaging in consumer decision making. We won’t repeat those points here other than to say that traditional persuasion is often made irrelevant by three characteristics of consumer buying decisions: ✓ Many consumer decisions bypass conscious deliberation, so they leave no opportunity for persuasive messaging to impact purchase decisions. ✓ In the absence of conscious deliberation, purchase decisions are more likely to be influenced by heuristics and choice architectures (the way choices are presented in the shopping environment) than by any persuasive message from advertising. ✓ Many purchase decisions are habitual, triggered by environmental cues, and carried out automatically without conscious oversight, including any active recall of persuasive arguments from advertising. Of course, there are buying situations in which persuasion isn’t irrelevant, especially when the product or category is new or novel, or when the purpose of the ad is to convince the viewer to take a direct action, like make a donation or call a toll-free number to buy the product being advertised. Then persuasive advertising can have a significant impact. But for most of the things that consumers buy every day, the traditional idea of persuasion is simply not a part of the buying equation.

Read it back to me In our discussion of memory and brands in Chapter 9, we describe two types of long-term memory: explicit and implicit. The kind of memory assumed to operate in the direct route is explicit memory, because it’s tested by asking people what they can consciously recall from a particular experience in the past — in this case, an ad. It ends up that this simple and obvious question has some big repercussions.

Chapter 11: Advertising Effectiveness

When advertisers and market researchers first thought to test advertising effectiveness by asking people if they remembered seeing an ad, they were probably unaware of the whole implicit-explicit memory distinction. But when they took the answer to this question as their primary measure of ad effectiveness — ad recall — they essentially cut themselves off from measuring implicit memory. And in doing so, they missed a major way in which advertising actually works in human memory. Because linking advertising directly to sales is difficult, ad recall evolved into a kind of surrogate measure for ad effectiveness. As we note earlier, the logic seemed impeccable — if you need to remember an ad in order for it to influence you at a point of sale, then an ad that is better remembered is more likely to play that role (all else being equal). Some observers of advertising feel that this equation has caused at least some advertisers to strive for explicit memory at all costs — by being louder, more obnoxious, more shocking, or more irritating than other ads. Apparently embracing an idea akin to the principle that “There is no bad publicity,” some advertising seems to be based on the idea that “There are no bad memories.” A quick glance through Part II of this book provides many examples of why this is not the case. In addition, direct research on the predictive impact of recall on sales hasn’t been kind. A large body of studies, by both academics and practitioners, has found very little relationship between ad recall and sales or market share. The consensus view seems to be that picking ads on the basis of recall is about equivalent to flipping a coin. In a way, this is good news. The failure of recall to predict sales implies that some other process must be at work for those ads that do have a significant impact on sales, at least sometimes.

Taking the Indirect Route to Advertising Effectiveness The indirect route to advertising effectiveness eventually arrives at the same destination as the direct route, but it differs considerably in how it gets there. Instead of depending on high attention, it focuses on low attention. Instead of relying on explicit persuasion, it relies on priming and repetitive conditioning. Instead of aiming at creating explicit memories, it emphasizes the creation of implicit memories. And finally, instead of trying to impact sales directly, it focuses on impacting brand equity, which then carries the burden of influencing purchase behavior at the point of sale.

183

184

Part III: Neuromarketing in Action

Advertising and low-attention processing The idea that low attention may be better for advertising effectiveness than high attention was first introduced by Herbert Krugman in the 1960s and has been pursued by Robert Heath since 2001, most extensively in his 2012 book, Seducing the Subconscious: The Psychology of Emotional Influence in Advertising (Wiley-Blackwell). Evidence for low-attention processing of advertising has been growing since the 1990s. An influential early study published by Stuart Shapiro and colleagues in 1997 showed that advertising placed at the edge of people’s vision, accompanied by a study task that forced them to keep all their attention focused centrally, still affected the products they later selected when asked to create a shopping list. When simple ads for carrots and a can opener were displayed, those products showed up more often on the shopping lists, even though people weren’t aware of seeing the ads. The study confirmed that advertising could influence choice without requiring high attention. Most people can accept the idea that too much attention may not be good for advertising effectiveness. Advertising is generally an interruption, not something we actively seek out, and many ad claims are pretty weak or silly if you make the effort to actually think about them. But the other side of the argument is more challenging: How can less attention lead to more brand favorability? The answer comes in two parts, which we discuss in the next two sections: ✓ It has to do with how human brains respond emotionally to sensory stimuli. We generate emotional responses before we pay attention, so attention isn’t required to create the emotional connections that underlie priming and conditioning. ✓ It has to do with memory. Emotional associations established at low levels of attention lead to longer-lasting influences on attitudes and behavior than rational arguments, because they trigger implicit rather than explicit memories.

Dissecting the feel-good ad Some ads seem to violate all the rules of traditional advertising effectiveness. They don’t clamor for your attention. They contain no persuasive arguments. They barely mention the product at all, perhaps only with a low-key logo display at the end of the ad. They usually tell an emotionally engaging story, often set to catchy music, that has little to do with the product or brand, except for a subtle suggestion that the advertiser shares the positive values illustrated in the ad.

Chapter 11: Advertising Effectiveness Yet, despite these violations, such ads can be highly effective. Although reliable data on financial performance of ad campaigns is hard to come by, one respected source is the Databank (http://staging.ipa.autometrics. com) from the Institute of Practitioners in Advertising (IPA), which contains over 1,400 case studies of successful advertising campaigns submitted to the IPA Effectiveness Awards competition over three decades. Researchers classified these campaigns as emotional, rational, or mixed in their basic appeal. They found that campaigns containing exclusively emotional content were twice as likely to produce very large profit gains than campaigns that emphasized rational content (31 percent versus 16 percent). Campaigns that mixed some emotional content with rational content also performed better than purely rational campaigns (26 percent versus 16 percent). According to these findings, emotional advertising works better than rational advertising where it matters: at the bottom line. But how do these ads work? The answer begins with the way we process emotional input. As we explain in Chapter 5, emotional responses are primarily preconscious. We have circuitry in our brains that allows us to make a rapid emotional assessment of objects in our environment (creating emotional markers) well before we’re consciously aware of them. By the time we notice something, the object has already been “tagged” with an emotional marker that tells us whether it’s something we should approach or avoid. This process is highly efficient for our cognitive miser minds, because it occurs without the expenditure of costly cognitive resources required for conscious deliberation. These emotional responses then get associated with the advertised brand through the psychological process of conditioning, in which responses to one object (the emotions generated by the ad) get transferred to another object (the brand). The mechanism by which conditioning occurs couldn’t be simpler; it’s repetition — the repeated presentation of the emotional response and the brand together. Technically, this is the process of affective conditioning, which is different from classical conditioning, the process illustrated in the famous “Pavlov’s dogs” experiment. In affective conditioning, emotions associated with an ad aren’t just triggered by later exposure to the brand — they become an integral part of the brand identity. Consider any of the strongest brand associations you can think of — achievement and Nike, creativity and Apple, safety and Michelin, family and Disney — all these associations have been built up by years and years of consistent conditioning through advertising (and other forms of marketing) that tied the two concepts together in your mind. And it all happened without any conscious effort on your part. This is because conditioning is an implicit learning process, using implicit memory to create associations in your long-term memory without your conscious effort or involvement.

185

186

Part III: Neuromarketing in Action

Conditioning, unlike logical persuasion, doesn’t require attention to create learning. Indeed, attention may actually inhibit nonconscious conditioning, because it triggers (nonconscious) correction goals and (conscious) counterarguing in the mind of the viewer. This is why some researchers, like Robert Heath, argue that attention is not only difficult to achieve for most advertising, but would actually be detrimental to advertising effectiveness if it could be achieved, because it would disrupt the real mechanism by which advertising operates.

Catch you later: Learning without listening Explicit memory requires effort, fades relatively quickly, and has to be reinforced regularly. But implicit memory is triggered effortlessly and lasts indefinitely. Place a brand in an emotionally engaging ad, repeat the association under low-attention conditions like TV watching, and you’ll get both implicit memory formation and a favorable default attitude toward your brand. Implicit memory creates associations at two levels: perceptual and conceptual. Perceptual associations have to do with physical similarities. Conceptual associations have to do with thematic connections or meanings. Ad-based conditioning is usually about creating and reinforcing conceptual associations, because the purpose of the ad is to change your concept of the brand. Implicit memory has some extraordinary properties. It operates automatically, outside our conscious awareness, so we have no direct control over it. It doesn’t depend on attention. It has a huge capacity compared to explicit memory. It endures for much longer periods of time than explicit memory. And it can’t be voluntarily recalled, so it remains invisible to all forms of selfreported recall testing. A final important property of implicit memory formation is that it can’t be consciously evaluated and double-checked by our conscious minds. The implication for consumers is that we’re carrying a lot of implicit associations around in our heads that have been created by advertising but not subjected to any kind of evaluative scrutiny. This would be quite worrisome if the only way we interacted with products or brands was through advertising. But luckily, we actually use products and brands, so direct experience is also a part of our memories, attitudes, and expectations. The slickest advertising campaign can’t overcome the reality of a pizza that tastes like cardboard.

Chapter 11: Advertising Effectiveness

Using Neuromarketing to Test Advertising It’s no coincidence that traditional research methods tend to be used to measure the direct route to advertising effectiveness. The methods and the model essentially grew up together. Some researchers have argued that this closeness creates a problem — that advertisers who rely on traditional methods will only produce direct-route advertising, because that’s the kind of advertising that “wins” on those kinds of measures. There is, indeed, some risk of this, and we believe neuromarketing measures can provide a useful supplement to traditional measures for testing direct-route advertising. But the real benefit of neuromarketing measures is their ability to address the testing requirements of indirect-route advertising, which gains much of its power from responses that occur below conscious awareness and, therefore, cannot be tested using the self-reporting measures of traditional advertising research. Neuromarketing draws upon the same methods that have been used in academic research to uncover the dynamics of the indirect route: low-attention processing, nonconscious emotional reactions, conditioning, implicit learning, brand associations, and buying behavior.

Tracking attention, high and low Attention to advertising can be measured in real time using several techniques (for more details, see Chapter 16). Two of the most popular are as follows: ✓ Eye tracking: Using standard eye-tracking hardware and software, it’s possible to measure the number of fixations per second (fps) when a person is viewing an ad. This measure has been found to be sensitive to cognitive load (the amount of information being processed consciously), which increases the more active attention is being paid to an ad. When our brains are actively taking in information, our eyes tend to jump more rapidly from place to place in the visual field, and we devote less time to each fixation. ✓ Electroencephalography (EEG): For a more direct measure of attention, changes in certain brain-wave patterns over regions of the scalp can be used to detect changes in top-down attention. Decreasing alpha wave activity over the frontal brain areas, for example, can be converted into a reliable moment-to-moment measure of attention.

187

188

Part III: Neuromarketing in Action

Measuring attention is only the first step. Equally important is interpreting the attention measure. For advertising that takes the indirect route to effectiveness, we want to see low attention, not high. For advertising that takes the direct route, we want to see the opposite. In either case, to accurately measure this effect, it’s important to test advertising in a natural viewing context. To get a realistic simulation of a natural TV ad viewing experience, we suggest telling people they’re going to watch a TV show, and then show them ads as part of an unannounced ad break, just like in real life.

Monitoring emotional reactions A positive emotional reaction to advertising stands at the center of the indirect route to effectiveness. Positive, approach-oriented emotions result from many attributes we’ve discussed in previous chapters, such as processing fluency and familiarity. Brain science tells us that a short but pleasant ad, viewed multiple times, will reliably produce stronger positive feelings toward the product and brand, even if the product has little logically to do with the pleasant experience. Three techniques are commonly used by neuromarketers to measure emotional responses to advertising: ✓ Electromyography (EMG): This technique measures micro-level activation of muscles in the face that are involuntarily associated with emotional reactions, such as the “frown” and “smile” muscles. ✓ Facial expression analysis: Several software programs provide automatic classification of observable facial expressions while watching ads. Some of these programs can be implemented through webcams, allowing a scalable way to test across large samples of viewers. ✓ EEG measurement of approach-avoidance: Relative activations of certain brain-wave frequencies in the left and right frontal areas of the brain have been found to be good indicators of nonconscious approach-andavoidance motivation. Tracked over time while a viewer is watching an ad, this measure can identify precisely what moments of the ad are contributing most to approach or avoidance responses.

Testing for the right things Ultimately, the key to successful ad testing is being sure you know what the advertiser is trying to accomplish. If the ad is for a new product with great new features that change the game in its category, you want to go for all the

Chapter 11: Advertising Effectiveness attributes of a successful direct-route ad — high attention, a persuasive message, and high recall. You’ll want to look for novelty and attraction, nonconscious and conscious goal activation, and both implicit and explicit memory activation. You’ll want to do significant testing at the point of sale, determining what product packaging, shelf locations, and merchandising displays trigger the memories laid down by the advertising. You’ll feel more comfortable asking people what they think about your ad and product, because the ad is meant to work largely at a conscious level. If, on the other hand, you’re testing an ad meant to bolster or reinforce the brand equity of a familiar product with positive emotional associations, you want to test for a successful indirect-route execution — low attention, high positive emotion, less recall, and more implicit memory activation. You’ll want to focus more on brand-equity effects of the ad than you would for a directroute ad. You’ll be more suspicious of self-reporting measures, because much of what you’re trying to accomplish with the ad is occurring at a nonconscious level. You’ll still want to tie your ad testing to point-of-sale testing, because you’ll still want to know how your ad impacts actual behavior. Ad testing is one of the most obvious areas in which neuromarketing research techniques can add real value to traditional techniques. As we learn more about how advertising really works, we’ll see more potential for neuromarketing measures that provide access to mental responses occurring below the level of conscious awareness. The potential payoff isn’t just more effective ads. If advertising could lessen its preoccupation with attention at all costs, we suspect it would become a much less irritating and vexing intrusion in consumers’ lives. And if the focus on driving home a sometimes strident persuasive message could be softened a bit, we believe both advertisers and consumers would heave a sigh of relief.

189

190

Part III: Neuromarketing in Action

Chapter 12

The Shopping Brain and In-Store Marketing In This Chapter ▶ Understanding why and how we shop ▶ Exploring the multisensory nature of shopping ▶ Identifying different shopping styles based on personality traits and gender ▶ Discovering ways to design the shopping environment for maximum impact

T

he impact of brands, products, and advertising all come together at the point of sale in the shopping experience. In this chapter, we look at what brain science and neuromarketing have to tell us about the shopping brain in its “natural” habitat, the physical store. In the next chapter, we look at shopping in the online, “virtual” world, where some things remain the same, but others are quite different.

Understanding the Mind of the Shopper Shopping is a complex experience for the human mind. It begins with conscious goals and expectations. These goals and expectations are derived from two sources: ✓ Actual personal experience with products and brands ✓ Learned associations acquired through advertising, marketing, and the experiences of others In the real world (as compared to the virtual world, which we cover in the next chapter), shopping is a physical experience that requires physical movement to accomplish. This seemingly obvious fact is important because the human brain is, in many ways, optimized by evolution to be good at navigating through space to acquire objects in its environment that meet the body’s

192

Part III: Neuromarketing in Action basic needs (like food and shelter). Not only are we good at it, but we’re motivationally driven to do it, and we draw intense satisfaction from seeking out and finding the things we want and need. Shopping is the modern equivalent of hunting and gathering. Although it’s directed by conscious goals, it utilizes the same nonconscious processes that were selected in our ancestors’ brains and passed down to our modern minds: the ability to notice novelty and familiarity in our environment, the motivation to approach things that appear good for us and avoid things that don’t, the tenacity to pursue our goals in the face of obstacles and interruptions, and the ability to choose rapidly among alternatives that involve uncertainty and risk.

Shopping: A multisensory experience We shop in the same way our ancestors hunted and gathered — by searching through physical space using environmental cues flowing into our brains through all our sensory pathways to guide us toward achieving our goals. Retail stores and other shopping environments (for example, showrooms) trigger all a shopper’s senses and impact the shopping experience through those triggers. These sensory experiences may be deliberately activated by the retailer or may occur by chance, but every experience is absorbed by the shopper’s brain, either consciously or nonconsciously, and has the potential to increase or decrease the likelihood of purchases being made. Neuromarketing research has begun to focus on these sensory aspects of shopping. Neuromarketing firms have arisen that specialize in testing sensory effects and advising retailers on sensory best practices. Here are some results and implications across the five basic senses: ✓ Sight is critically important to shoppers in a retail environment. Package or product design, displays, signage, colors, typestyles, and other visual elements can be used to attract attention, prime the shopper, fast-track a decision, create positive emotional connections, or aid rapid recognition and ease of processing. ✓ Touch is particularly important when people are shopping for items that come in contact with the body, such as towels, clothes, and health and beauty products, as well as products that are carried around or held, like umbrellas, briefcases, handbags, or wallets. Researchers have found that touch can have surprising priming effects. For example, the weight, texture, and hardness of touched objects can impact our later judgment of people (or brands or products) as being more serious (heavy), difficult (rough), or rigid (hard).

Chapter 12: The Shopping Brain and In-Store Marketing ✓ Taste is important with foods and beverages, especially when the purchase can be challenged by high cost or lack of familiarity. In-store taste testing is a proven way to reduce risk and activate goals, which may lead to a trial purchase. Both the display and the person managing the taste testing have been found to prime the consumer, creating positive or negative expectations that can significantly impact the taste experience. ✓ Smell is increasingly exploited by retailers using piped-in fragrances to trigger associations and activate goals related to a purchase. For example, a supermarket may dispense the smell of freshly baked bread, an infant apparel store may disperse baby powder through the air ducts, and a department store may use scents to trigger associations for specific product categories, such as a beach smell in the swimwear section. Scent marketing has become a big business, with specialized agencies claiming clients across a wide range of environments, including banks, auto showrooms, fitness centers, movie theaters, hotels, grocery stores, medical offices, cruise ships, and airplanes. ✓ Sound is also receiving more attention as a means of activating positive associations that prime a purchase. For example, a supermarket in the United Kingdom placed four French and four German wines, matched for wine style and price, on its shelves. A tape deck on top of the shelving unit played French music on even days and German music on odd ones. On French music days, 77 percent of the wine purchased was French; on German music days, 73 percent of the wine purchased was German. Background music marketing appears to face more resistance among shoppers than scent marketing, in part because it’s often consciously perceived as invasive and inappropriate. These examples highlight the wide variety of ways that sensory inputs can impact retail shopping environments. Neuromarketing testing is particularly well suited to evaluating these sensory effects on the shopping experience because many of them occur below the level of conscious awareness.

Shopping and goal pursuit As we discuss in Chapter 7, people can pursue goals without knowing they’re pursuing them. They do so with exactly the same set of accompanying behaviors that are observed in conscious goal pursuit. Nonconscious goals operate over time, persist in the face of obstacles, are quickly resumed when interrupted, and impact later moods and behavior, just as conscious goals do. Shopping pursuits can be broadly classified into two categories, represented by the common phrases doing the shopping (which captures the idea of shopping as a chore) and going shopping (which captures the idea of shopping for pleasure). The goals are quite different for these two kinds of shopping, as is the balance between conscious and nonconscious goals in each experience.

193

194

Part III: Neuromarketing in Action When doing the shopping, the consumer typically wants to minimize the time, money, and effort he or she needs to spend to acquire the needed items. Doing the shopping is a repetitive task, with the consumer habitually going to the same retail outlet and buying the same brands and products. In these instances, the shopper is likely pursuing his or her goals — to minimize time, money, and effort spent — largely nonconsciously. In this shopping mindset, habit is in charge and vigilance is low. The shopper is less susceptible to explicit marketing messages and has little interest in variety seeking or complex choice tasks. In-store marketing and priming are less likely to change the habitual shopping patterns that characterize doing the shopping. When going shopping, the shopper is more likely to pursue conscious goals. The reason is anticipation: The shopper is looking forward to the shopping trip and is ready to be stimulated and excited by new offers and ideas. He or she is more likely to engage in variety seeking and welcome the idea of choosing among alternative options. In this mind-set, vigilance is high. The shopper is actively seeking out relevant marketing messages and environmental cues that stimulate, prolong, and heighten the shopping experience. The same shopper is likely to engage in both going shopping and doing the shopping, but on different occasions and often in different types of stores. What’s engaging when going shopping may be irritating when doing the shopping. Research suggests that some retail categories, such as supermarkets, retail banks, and gas stations, typically fall into the doing the shopping category, while fashion boutiques (for women), computer stores (for men), and specialty stores in general (such as bookshops and high-end furniture stores) are more likely to be going shopping destinations.

To be successful, retailers need to align their in-store marketing strategies with their consumers’ shopping goals. Supermarkets or convenience stores where people do the shopping need to focus on saving the consumer time, money, and effort. They need to make habitual shopping easier with good category management, consistent placement of products, highly visible special offers, and fast checkout. For a going shopping destination, a completely different strategy is likely to be successful, including elements like expert customer service, an unhurried atmosphere, and understated pricing tactics.

Efficiency and convenience are important to reinforce the typical habitual shopper’s goals, but these benefits generally don’t help to develop a strong emotional relationship with the shopper. As a result, loyalty tends to be low. If another retailer offers the consumer an opportunity to save even more time, money, or effort, the shopper may very well switch without a second thought. Some retailers commonly associated with doing the shopping address this problem by integrating elements into their stores that deliver the emotional benefits typically offered by going shopping. For example, Aldi, an international grocery chain, now includes a “middle aisle” in its stores that offers extremely low prices on goods not typically found in supermarkets, introducing an element of shopping excitement into a store otherwise designed for convenience

Chapter 12: The Shopping Brain and In-Store Marketing and efficiency. Costco similarly surprises shoppers with items that are available only occasionally. Essentially, these strategies create anticipation and, potentially, surprise and excitement. These emotional benefits balance the doing the shopping experience by offering some going shopping elements. There is a brain science principle behind this practice that retailers are probably not aware of. Studies of the reward circuitry in the human brain show that when pleasure is delivered in an unpredictable manner, it creates a greater sense of reward than when it’s delivered in a regular, predictable manner. So, the anticipation of something new and potentially rewarding that’s also surprising is more motivating that the same reward delivered with predictable regularity. Unlike predictable things, unpredictable things have the potential to tell us something new and different about the world. Because they serve as a signal that a big reward might be close by, they naturally command our attention. Retailers, by providing our pleasure-seeking brains with this possibility of unpredictable reward, are directly stimulating this powerful motivational circuitry in our brains. The activation of both conscious and nonconscious goals is a critical part of any shopping experience. What goals are activated, with what consequences, is a function of the anticipations and expectations of the consumers, combined with the environmental cues provided by the retailer. If expectations and cues are in alignment, the shopping experience is likely to be positive for both the shopper and the store. If expectations and cues diverge, the results are likely to be disappointing for both.

Personality and shopping styles An important aspect of shopping research is the impact of consumer personality, temperament, and behavioral style on shopping behavior and outcomes. Although most neuromarketing research focuses on how different marketing materials generate different consumer responses, some neuromarketers are beginning to look at the other side of the equation — how different types of consumers may respond to the same marketing materials. In psychology, this is sometimes called the difference between trait and state explanations. Traits are relatively stable and long-term predispositions to act in certain ways. States are shorter-term responses to specific situations or events. Quickness to anger is a trait; getting angry at a rude salesperson is a state. Traits can be the basis of consumer segmentation models. Most segmentation models used in market research today are either demographic (based on factors like age, gender, and income) or psychographic (based on factors like attitudes, interests, and lifestyles). Neuromarketing opens up the possibility of brain-based segmentation, which might be called neurographic, the segmentation of consumers by trait propensities like extroversion or impulsiveness.

195

196

Part III: Neuromarketing in Action Neurographic segmentation is a relatively new specialty in neuromarketing. Its roots can be found in neurologically based predispositions that appear to significantly impact how people think and act as consumers. Here are three examples of trait propensities that have been found to differ among individuals and influence their general orientation toward shopping and marketing: ✓ Behavioral inhibition system (BIS) versus behavioral activation system (BAS): People vary in terms of their overall approach-versus-avoidance orientation toward the world. Behavioral activation and inhibition are orientations in individuals’ basic approach-avoidance makeup. High-BIS individuals are more likely to withdraw from highly stimulating experiences, while high-BAS individuals are more likely to seek out and enjoy such experiences. Researchers have found strong relationships between people’s BIS/BAS tendencies and their consumer-related activities. In general, people who score high on BIS are more attracted to offers that emphasize avoiding losses, while people who score high on BAS are more attracted to offers that emphasize achieving gains. High BAS has also been found to be associated with impulsive buying, overeating, and substance abuse, three consumer behaviors that have profound public policy and public health implications above and beyond marketing considerations. ✓ Regulatory focus: People vary in how they approach problems and pursue goals, using either a promotion focus (emphasizing ideals and achieving desirable outcomes) or a prevention focus (emphasizing obligations and avoiding negative outcomes). Research on regulatory focus has identified several ways in which matching a marketing message or shopping experience to a person’s preferred regulatory orientation — either promotion or prevention — improves motivation, heightens goal pursuit, and increases perceived value from a transaction or shopping experience. For example, people with a promotion orientation are more sensitive to the presence or absence of positive outcomes, so they’re more receptive to offers that stress ideal outcomes, outstanding opportunities, or unbeatable deals. People with a prevention orientation, in contrast, are more sensitive to the presence or absence of negative outcomes, so they’re more likely to be swayed by offers that include strong guarantees, other forms of loss protection, or offers that emphasize meeting obligations or fulfilling responsibilities. ✓ Pain of paying: People vary in the extent to which they experience psychological pain when they part with money, resulting in a distinction between tightwads (people who experience high pain of paying) and spendthrifts (people who experience low pain of paying). Pain of paying has an established neurological basis in the surprising finding that paying for things activates the same centers in the brain that are activated by physical pain. Paying literally hurts, and it appears to naturally hurt some people more than others. Spendthrifts and

Chapter 12: The Shopping Brain and In-Store Marketing tightwads exhibit very different consumer behaviors. Spendthrifts who use credit are three times as likely to carry debt as tightwads who use credit. They’re also twice as likely to have less than $10,000 in savings, while tightwads are twice as likely to have more than $250,000 in savings. Perhaps most interestingly, spending differences between tightwads and spendthrifts are five times greater among men than among women, implying that pain of paying has less of an influence on women’s buying behavior than on men’s buying behavior. These are just three examples of ways in which people differ in terms of traits or predispositions that impact their shopping styles and preferences. There are many others.

If you’re a retailer or advertiser considering engaging a neuromarketing firm to perform a shopping study, be sure to ask if and how they use neurographic segmentation in their research, and how they would recommend segmenting your test participants in relation to the research topic you want to pursue.

Making Stores More Brain-Friendly There are three basic tasks that any retail (or online) store must accomplish to make shopping more brain-friendly. All three can benefit from neuromarketing insights and can be assessed with neuromarketing methods: ✓ Finding: Shoppers need to be able to find what they’re looking for, as well as discover new things that they may not have been looking for. How can retailers help shoppers navigate the store environment? ✓ Choosing: Shoppers must be able to choose among alternatives. Choice can be made harder or easier, and many a sale can be lost if the choice task is too daunting. How can retailers enable not just any choice, but an optimal choice for both the shopper and the store? ✓ Paying: Shoppers must be able to overcome the pain of paying. Some shoppers feel this pain more than others, but all shoppers feel it. How can retailers ease the pain of paying? Providing a successful shopping experience that encompasses finding, choosing, and paying can be done only if the experience is aligned with the shopper’s goals, both conscious and nonconscious. As we illustrate earlier in this chapter, those goals may differ: A store serving a customer who seeks an efficient shopping trip may need to look very different from a store serving a customer who wants to explore and discover. From a neuromarketing perspective, the same principles apply in both cases — they’re just applied differently. For example, both types of retailers can apply neuromarketing concepts like framing, anchoring, and priming, but in different ways to meet different shopper goals.

197

198

Part III: Neuromarketing in Action

The shopper and the retailer may not always have the same objectives. The shopper’s goal may be to have a highly efficient shopping trip, but the retailer’s goal may be to retain the shopper for longer, expose him or her to items he or she may not have intended to buy, or perhaps increase the likelihood of an impulse purchase. The retailer can select how to use neuromarketing in light of the underlying retail strategy.

Getting shoppers where they need to be From the retailer’s point of view, the store is a series of subtle and not-sosubtle cues to help the shopper satisfy his or her explicit goals while, at the same time, triggering and fulfilling additional goals that benefit the retailer. The objective is to maximize dwell time (the amount of time customers stay in the store), because shoppers regularly change their minds after they enter a store. Shopping researchers provide a number of ways to track consumers moving through a store. Using cellphone signals, stores can create a detailed map of individual and cumulative traffic. Using overhead cameras and facial recognition software, they can estimate demographic characteristics like gender and age breakdowns. Computer-tablet-equipped shopping carts provide another tool for guiding shoppers through the store. As shoppers navigate the store, displays and imagery act as primes, influencing attention, emotional associations, and selection via the many nonconscious mechanisms we identify in this book. Much of store layout and product display is dedicated to priming. For example, at Whole Foods grocery stores, the idea of freshness is primed with displays of fresh flowers and product-on-ice displays, while the ideas of wholesome and local are primed using in-crate displays that look like they’re straight from the farm and simulated chalk-on-blackboard signage. In line with the principles of nonconscious goal activation that we describe in Chapter 7, many sophisticated retailers focus on priming broader motivational goals. Nordstrom, for example, works hard to provide cues to shoppers that prime the idea of seeking luxury. Nordstrom’s fashionable settings, attentive service, classical music, and other factors all contribute to putting consumers into a pursuit-of-luxury mind-set as they shop. Coordinated environmental stimuli like these help activate nonconscious consumer goals and create mind-sets that carry over into purchase decisions.

Making choices easier Once the consumer has found his or her way to the shelf, retailers want to encourage choice, not just browsing. All suppliers, of course, want to encourage choosing their products over the competition’s products. At this point

Chapter 12: The Shopping Brain and In-Store Marketing in the shopping experience, many nonconscious and conscious factors come together to contribute to the eventual choice (or non-choice). Brain science offers many insights that retailers and shopping researchers can use to impact the consumer’s decision. Habitual shoppers’ choices are the easiest to predict. Because they’re acting out behavioral routines without much thought, the retailer’s task is simply to make sure that their habitual patterns aren’t disrupted. As we discuss in Chapter 9, this means maintaining consistent triggers at the point of sale and avoiding any kind of novelty that may disrupt the habitual buying process. For shoppers who are engaged in deliberate search and discovery, influences on choice are more varied and harder to control. This is because people often don’t know what draws their attention or how they truly feel about products. Also, as we discuss in Chapter 8, people may believe they have stable product or brand preferences, but these are largely constructed and, therefore, can be changed with the right situational cues.

Here are some strategies that brain science research, especially from the behavioral economics tradition, has identified to simplify choice in a shopping situation:

✓ Minimize choice. The most important principle is the simplest — don’t overwhelm the consumer with too many choices. In a classic experiment, grocery store shoppers were offered the chance to taste a selection of either 24 jams or 6 jams. More shoppers stopped to sample the larger variety, but sales to the group that had fewer options were more than five times higher. ✓ Play with pricing. Shoppers often don’t do math (processing fluency at work) and are attracted to “more.” In one experiment, a “50 percent bonus pack” sold 71 percent more than a “35 percent discount,” even though the latter is a slightly lower price per unit. Retailers have learned that clustering items (for example, ten for $10) leads people to buy more. Also, using a high-priced item to create an anchoring effect (see Chapter 8) can make lower-priced items appear less expensive. ✓ Increase shopping momentum. Researchers have found that when people pick up inexpensive, easy-to-buy items displayed at the front of the store, they’re more likely to buy other, more expensive items deeper in the store. Buying one item, no matter how trivial, creates momentum to buy more. ✓ Categorize. Categorization simplifies choice. Consumers in particular like unfamiliar products to be categorized — even if the categories are meaningless! In a study of different coffees, people were more satisfied with their choice if it came from a categorized selection, even when the categories were simply A, B, and C.

199

200

Part III: Neuromarketing in Action ✓ Provide decoy items. A $30 item that isn’t selling well by itself will sell better when it’s placed next to a similar item with a $90 price tag. This is sometimes called the five-patty burger principle — if you want to sell more three-patty burgers in your restaurant, put a five-patty burger on the menu next to it.

Decreasing the pain of paying

Every decision to buy something involves a trade-off between the anticipated benefit of possessing the item and the anticipated pain of paying for it. As noted in the discussion of tightwads and spendthrifts in the “Personality and shopping styles” section earlier in this chapter, these anticipations have observable signatures in distinct areas and networks in the brain. Retailers have discovered several tactics for minimizing the pain of paying:

✓ Delay payment. The simplest tactic is to offer a way to delay payment. This moves the pain of paying into the future, where it weighs less heavily on the present choice deliberation. Layaway plans, no-payments-forthree-months plans, and other credit arrangements all encourage buying today by putting off paying until tomorrow. Credit in general operates on this principle. Knowing the bill won’t arrive until the end of the month makes it a lot easier to buy something today. ✓ Offer a money-back guarantee. Immediate pain of paying can be eased by offering a way to undo the purchase later on. Although money-back guarantees are hardly ever invoked, they provide a psychological crutch that can help a consumer overcome pain of payment with the rationale that “I can always take it back.” ✓ Tie the purchase to a rewards program. A rewards program provides another kind of rationale for making an immediate purchase. In this case, it isn’t offsetting the pain directly, but adding to the anticipated benefit of the purchase, thereby offsetting the pain indirectly.

Using Neuromarketing to Test Shopping Environments Unlike consumer responses to marketing messages or product consumption experiences, both of which result in a mental state that marketers and researchers want to measure (such as liking, approach motivation, familiarity, surprise, and so on), the outcome of interest in shopping is an observable behavior — what the consumer buys, where, when, and for how much. There are lots of intervening mental-state variables that researchers want to measure as well, such as perceived ease of finding products, overall impressions of the store, likelihood to return, and so on, but the ultimate outcome of interest is

Chapter 12: The Shopping Brain and In-Store Marketing buying behavior. This simple fact has a big impact on how neuromarketing can be applied most effectively to the measurement of shopping experience. If buying behavior is the chief outcome variable of shopping research, what shoppers see (and touch, taste, smell, and hear) is the chief input variable. In fact, all the shopping research questions we may imagine can be boiled down to one question: How did that shopper get from everything he or she saw to that one thing he or she bought? This leads to two important implications for neuromarketing research aimed at shopping. ✓ Behavioral testing — such as presenting consumers with choice scenarios in which situational factors like price and shelf position are varied — is likely to be more useful than measuring mental states alone. ✓ Eye tracking — to measure where consumers are looking in the aisle, at the shelf, and when examining individual products — is likely to be an integrated part of any useful neuromarketing solution.

Challenges in tracking the free-range shopper Attempting to track the mental states of a shopper in a natural shopping environment poses a number of challenges, and these challenges increase as the data collection technology becomes more sophisticated and sensitive. Electroencephalography (EEG), for example, which provides very sensitive measures of electrical activity in the brain (see Chapter 16), is also very sensitive to muscle movement. Measuring EEG while a person is naturally walking through a store, turning his or her head, moving his or her eyes, and activating other muscles, is compromised by these other signals, which must be removed from the data stream before the EEG signals can be properly analyzed and interpreted. Similar “noisy signal” problems exist for other sensor-based technologies, such as biometric measures of emotional arousal or attention. Free-roaming shoppers pose many additional challenges for experimental designs and controls that try to measure mental states, regardless of the measurement technology used. In scientific experimentation, there is always a trade-off between the naturalness of an experimental setting and the ability to draw confident conclusions about causes and effects. When people are measured in a natural setting, like taking a real shopping trip to a real store, their mental states are more naturally induced, but there are often too many things happening at once to determine with confidence what situational factors are influencing what mental states. Neuromarketing researchers have developed a number of alternatives to instore testing that provide needed controls while maintaining enough realism to simulate, if not perfectly re-create, a natural shopping experience.

201

202

Part III: Neuromarketing in Action

Neuromarketing alternatives to testing in-store Behavioral testing of choice scenarios in a lab setting has been found to translate well to real-world settings because the same deep nonconscious heuristics and biases are activated in each case. Using eye tracking with static images of shelf sets (called planograms) yields useful insights into how consumers visually search a shelf to find and select products. Combined with neurometric or biometric measures and explicit choice tasks, such studies can provide a wealth of practical information about the impact of different shelf configurations on product search and selection. A good compromise between naturalness and control can be achieved by having consumers watch video depictions of shopping environments and experiences in the lab. Participants are exposed to the same video, which increases control, and are able to remain stationary, which decreases signal noise. Much as our brains can easily become immersed in a movie (see Chapter 14), researchers have found that viewing video shopping experiences can closely replicate the mental states and behavioral responses we would experience in a real-world shopping situation.

Simulating the shopping experience The next step beyond passively watching an imaginary stroll down a videotaped store aisle is to engage in an interactive virtual reality (VR) shopping experience. Not only do VR shopping environments represent large cost savings compared to designing and constructing physical test stores, but they also provide an even better balance between naturalness and control than can be achieved with in-lab video experiences. The consumer can ✓ Be surrounded by a very realistic store environment ✓ Move through that environment voluntarily (without having to move physically) ✓ Be measured precisely during the experience ✓ Be exposed to identical shopping scenarios so situational variables can be properly controlled Several research vendors are beginning to provide very detailed and interactive VR offerings, including full 3-D immersive environments. We expect to see this approach growing as a neuromarketing research tool over the next few years.

Chapter 13

When Consumers’ Brains Go Online In This Chapter ▶ Recognizing how online marketing is different from traditional marketing ▶ Understanding how our brains consume web pages ▶ Looking at what causes website frustration, confusion, and rejection ▶ Seeing how we use nonconscious processes when we go online ▶ Identifying three major ways the Internet is changing our world

T

he human brain has encountered something brand-new with the invention of the online world. Throughout history, our brains have absorbed many profound innovations in communication technologies, beginning with the invention of language itself, then writing and reading, then the visual languages of photography and film, and most recently that pinnacle of human civilization, TV. But the online experience includes and goes beyond all these modes of communication. It challenges and entices our brains in new ways, enabling conscious goals and tasks to be pursued within a context of new and unique nonconscious primes and triggers, all mixed together inside a dynamic new presentation medium called a web page. Because the Internet increases mental demands compared to more passive media, we shouldn’t be surprised to find our brains employing cognitive miser strategies to manage the resulting cognitive load. To measure such strategies, marketers need to rely more on neuromarketing techniques to access the nonconscious processes involved. Online marketing and web experience may seem to be areas where neuromarketing would be well established. But, in fact, neuromarketing has been applied only in limited ways in the online world. This is because the Internet presents many unique challenges for brain science research that don’t appear in more passive marketing contexts like TV. As we illustrate throughout this chapter, these challenges revolve around the idea that people’s

204

Part III: Neuromarketing in Action brains are much more active when they go online than when they’re relaxing in front of their TVs. This difference means that many of the lessons marketers — and neuromarketers — have learned in more traditional media have to be reexamined when consumers’ brains go online. First, we look at how online marketing differs from traditional marketing. Then we examine the ways in which a web page can provide a satisfying or frustrating experience, and how nonconscious processes contribute to those outcomes. Next, we consider how the Internet extends our ability to satisfy many very basic human needs, with some interesting implications for our cognitive miser brains. Finally, we look at how neuromarketing approaches can be used to test online marketing and improve online experiences.

Understanding How Online Marketing Is Different In the early days of television, TV commercials looked a lot like print advertising. Similarly, in the early days of the Internet, online advertising looked a lot like TV advertising. But marketers soon realized that there were big differences between watching TV and going online. Three of those differences define much of the challenge for marketing and advertising in the online context.

Embracing interactivity and consumer control As we saw in Chapter 11, TV viewing is a passive activity. People do it to relax, and they’re quite willing to let the TV determine the flow of their entertainment experience for long periods of time (interrupted now and again by a channel change or fast-forwarding through an ad break). In such a state of relaxation, people are extremely unmotivated to pay attention to advertising, and they become more susceptible to repetitive conditioning by cognitively undemanding, emotionally satisfying ads. Going online is quite different. Unlike TV, the Internet is an active medium. When people go online, they’re doing something, not just watching something. And this can radically change how they receive and process product information and advertising. There are two key dimensions to this activepassive distinction: ✓ Interactivity: Going online is interactive in the sense that it gives consumers opportunities to actively participate in a dynamic experience with the website itself (interactive content), as well as with other con-

Chapter 13: When Consumers’ Brains Go Online sumers, advertisers, retailers, and product providers (interactive communication). This provides new opportunities for learning and satisfying wants and needs. ✓ Control: Going online allows consumers to control how they interact with online content. An online ad, for example, can be completely ignored, viewed without taking any further action, or clicked on to access more information or even complete a purchase. To be involved in an interactive experience is to be mentally engaged. Although advertisers may assume that more online interaction is always better, researchers have actually found a more complicated relationship between interaction and advertising effectiveness. This relationship is largely driven by the extent to which consumers are actively interested in (and paying attention to) the message of the ad. If interest and attention are low — as when an ad is unrelated to a person’s reason for viewing a web page — interactive features may be observed, but the consumer will not be engaged enough to actually use them. In such cases, the mere existence of the interactive features may act as a peripheral cue or low-attention prime for the non-engaged consumer. Because the consumer is likely to believe that interactivity is basically a good thing, this peripheral cue can lead to increased liking of the website, the ad, and the associated brand or product. If, on the other hand, interest and attention are high — as when an ad is highly relevant to a person’s reason for viewing a web page — then interactive features can have contradictory effects. To the extent that the interactive features facilitate choice and allow the consumer to selectively focus on the most important information, they can enhance the web page experience and have a positive effect on persuasion, brand favorability, and purchase intent. But if the interactive features are too taxing on the consumer’s mental resources — for example, if they make it hard for the consumer to manage the interactive information flow or keep track of his location — interactivity can divert attention away from relevant information gathering, increase frustration and confusion, and diminish persuasion, brand favorability, and purchase intent. Embracing interactivity, therefore, is not quite as simple as it might appear at first glance. More interactivity is not necessarily better. If the web page is not carefully designed to balance interactive capabilities and cognitive demands, interactivity can lead to less effective, not more effective, online advertising. A similar mixed picture has been found for the degree of control provided by a web page. As with interactivity, having more control can lead to more positive outcomes, such as higher satisfaction, better knowledge and recall, and higher confidence in judgments and choices. But if the control features are too demanding on mental resources, they can have a negative impact on all these outcomes.

205

206

Part III: Neuromarketing in Action Determining the extent to which interactivity or control has positive or negative impacts on consumers’ online experiences is difficult with traditional self-reporting measures. Neuromarketing measures can often provide better indicators of the cognitive responses involved, including attention, emotional intensity, and positive or negative emotional reactions.

Aligning ads with online tasks and goals People go online with a purpose. Unlike watching TV, which people generally do with no other purpose than to be entertained, going online is basically impossible without some purpose, intention, or task driving the behavior. Purpose changes how people engage with advertising. When ads are encountered in a passive entertainment context, as we show in Chapter 11, they’re seldom processed with System 2 logical thinking (the direct route to advertising effectiveness). They usually don’t attract much attention, and when they do, it’s often because they’re generating a negative emotional response by disrupting the entertainment experience. Advertising effectiveness in such a context becomes a question of bypassing attention, persuasion, and recall with low-attention processing, repetitive conditioning, and implicit memory (the indirect route to advertising effectiveness). In an active, goal-directed context, however, the direct route may become more relevant. If a consumer is viewing a web page with a purpose, and that purpose involves acquiring information, then advertising on that page can become something other than a disruption — it can become another source of information that may help with the task at hand. When the human brain is pursuing a goal, it’s drawn to anything in its environment that can help it achieve that goal (see Chapter 7). Online advertising in the context of goal pursuit may be processed quite differently from traditional TV advertising, but only if it’s aligned with the online tasks and goals being pursued by the consumer at the moment the ad is encountered. The problem for a lot of online advertising is that it isn’t aligned with online tasks and goals. There are exceptions, of course. The most-aligned type of online advertising is search advertising — those little text ads that appear above and to the right of your search results on Google or other search engines. If you’re searching for information about a digital camera, for example, ads offering best prices on that camera will appear next to your search results. Those ads will be directly relevant to your interests at that moment, so you’re more likely to pay attention to them. This alignment advantage of search advertising is reflected in how advertisers invest their online spending. Search ads remain the most popular form of online advertising, accounting for almost half of all online ad expenditures in 2012, compared to about one-third for display ads, which are usually much more graphically rich but are generally not related to immediate tasks and goals.

Chapter 13: When Consumers’ Brains Go Online So, online advertising can perform much like the direct-route model says it should, if it’s aligned with the consumer’s tasks and goals. But if it isn’t aligned with those tasks and goals, it’s more likely to be treated like a traditional TV ad, avoided (at least consciously) as a distraction to the task at hand. It may be scanned peripherally, much like a TV ad is scanned with low attention, but it’s unlikely to attract attention, communicate a persuasive message, or promote a click-through action, as the direct-route model would predict. When online ads are aligned with online tasks, there is a real opportunity for advertising to become less intrusive and more relevant to the wants and needs of consumers. Such an outcome benefits both consumers and advertisers: Consumers get exposed to ads that have real informational value to them, and advertisers get to put their message in front of an audience that has a real interest in receiving it.

Dissolving the gap between marketing and buying The final way in which online marketing differs from traditional marketing is in its ability to provide immediate gratification of purchase intent — for the first time since the demise of the door-to-door salesman, consumers can see it, want it, and buy it all at the same time. When the sale is a couple of clicks away from the offer, one of marketing’s most central purposes is significantly diminished: It’s no longer necessary to create a lasting memory that will survive in either explicit or implicit form for days or weeks between message exposure and purchase opportunity. Coupled with advertising that aligns to consumer goals and tasks, the ability to complete a purchase at the point of ad exposure converts online experiences into full-blown sales experiences. This means that testing the relative effectiveness of online marketing can encompass choice and action outcomes, as well as attention and emotional responses to advertising. To the extent that these factors operate below the level of conscious awareness or employ heuristics (judgment and decision-making shortcuts), neuromarketing methods provide useful tools for comparing different designs. The ability to convert a marketing exposure into a sales opportunity has increased the importance of the landing page (the page you arrive at when you click on an ad) in website design. Landing pages are where the offer presented in the online ad gets converted into a choice opportunity and, if everything goes right, a purchase. Guidelines for increasing the persuasive power of landing pages have been developed by web designers, and many of those guidelines take at least part of their inspiration from neuromarketing principles covered in this book, such as processing fluency, nonconscious goal activation, loss aversion, and Cialdini’s six principles of persuasion (see Part II).

207

208

Part III: Neuromarketing in Action

Building the Perfect Website Because people go online with a purpose, websites exist to fulfill those purposes, whatever they might be. A “perfect” website, therefore, is one that enables its visitors to achieve their goals and accomplish their tasks easily, with a sense of satisfaction and accomplishment.

How the brain consumes web pages When people view a web page, their eyes scan the page using two types of attention we’ve encountered before: bottom-up, or involuntary, attention and top-down, or directed, attention (see Chapter 5). Extensive eye-tracking research has documented that bottom-up attention is automatically activated, without conscious control, immediately when a person sees something new in his or her visual field. Some features of viewed objects are naturally visually salient, meaning they automatically attract bottom-up visual attention. Examples include ✓ Brightness relative to background ✓ Distinct borders ✓ The center of the viewing area ✓ Tight groupings of visual objects ✓ Overlapping items ✓ Movement (especially around the edges) ✓ Faces and locations where faces are looking These automatic attractions are so predictable that some companies now provide software that can identify the salient elements of a web page or other visual object, as well as the likely order in which those elements will be viewed, with up to 80 percent accuracy compared to a real eye-tracking study. Using this neuroscience-based information, it becomes feasible to tune a website design with salient visual features to guide viewers’ gaze patterns to desired locations on the page. Bottom-up attention generates a saliency map of regions on the web page that are worth scanning. It allows us to nonconsciously divide up a web page into areas of high or low informational promise and sets the stage for the second type of attention, directed top-down attention, which is driven by the viewer’s goals and intentions.

Chapter 13: When Consumers’ Brains Go Online

An important finding from eye-tracking research is that our goals make a difference for where we look. Whether viewing a web page, a store shelf, or a magazine print ad, people use different scanning strategies when they have a goal in mind. Goals largely determine what we pay attention to, and several studies have shown how information that is more relevant to goal attainment is attended to more than information that is irrelevant or distracting. Visual selection is the process of choosing specific areas of the web page to focus on. If a consumer is picking an item from a set of alternatives, for example, she will fix her gaze more selectively on a subset of the available alternatives and will most likely make her choice from that subset. It has been found that the more time people spend looking at an item, the more likely they are to choose it. This creates an opportunity for web designers to structure the way choice options are presented. By increasing the duration of presentation of some options over others, they can increase the odds of those options being chosen. Web pages don’t have an objective property of “effectiveness.” They’re only more or less effective relative to a given goal or task. If a neuromarketing vendor offers to test web pages or websites without giving study participants an explicit task to follow, the results are not likely to tell you much, because people will create their own tasks, which will vary unpredictably across the test group. As a neuromarketing client, it’s your responsibility to know what task you want your visitors to accomplish on every page of your website, and to communicate this to your neuromarketing vendor so that these are the tasks against which your website’s performance is tested.

Website frustration, confusion, and rejection Everyone has experienced website frustration at one time or another. The main cause is a failure of alignment between web page design and user intent — that is, failure of the web page to deliver on the goals and expectations of the person interacting with the page. Web usability researchers normally collect evidence for alignment or misalignment by asking people what they’re experiencing, commonly referred to as the talk-aloud method. This technique has limitations similar to other self-reporting methods in that people may not be aware of the real causes of their frustration and may provide rationalizations that seem plausible at the time but point redesign efforts in the wrong direction. Using clues from eye tracking and involuntary physiological responses like increased emotional agitation (arousal) or facial muscle movement

209

210

Part III: Neuromarketing in Action (increased activation of frown muscles), neuromarketing researchers can provide additional information on how a web page is performing, beyond verbal self-reports. Given that goals can be nonconsciously pursued (as discussed in Chapter 7), it shouldn’t be surprising to learn that frustrating those goals may also be nonconsciously experienced, with significant nonconscious and behavioral impacts on the web page viewer. One factor that clearly influences web experience satisfaction, or lack of it, is the presence and disruptive impact of advertising on the web page. Ads usually exist around the periphery (edges) of a web page, and they usually aren’t aligned with viewer intent. In such cases, they can have a peripheral disruptive influence that’s difficult to measure with traditional methods. Even eye tracking can be misleading in this situation, because it only records the center of our visual gaze (called our foveal vision) but not our peripheral gaze (called parafoveal vision). If ads are located around the periphery of the page, they may appear in the eye-tracking record to be completely ignored (the source of a common eye-tracking result called banner blindness). But in fact, they’re being observed peripherally, and they can have a significant impact on the overall web page experience. Peripheral ads on a web page can disrupt the viewing experience by creating distracting clutter, especially if they involve bottom-up attention attractors such as bright colors, flashing animations, or moving images. Movement can be especially intrusive because our peripheral vision is biologically tuned to be sensitive to movement around the edges of our visual field, so we can’t help but be attracted to it. Unfortunately for advertisers, that attraction comes at a negative emotional cost, because sensitivity to peripheral movement evolved as an emotional marker for identifying danger. This doesn’t mean that we drop our laptops and run off in terror when we perceive movement at the edges of our web pages (although some online ads do come close to triggering that response), but we do experience an increase in annoyance and resistance that impacts our memories and future behaviors, and may or may not reach conscious awareness. Some online publishers have attempted to counter these negative effects by moving the ads into the center of the page where they can intersect with the viewer’s task flow. However, researchers studying this tactic have found a contradictory result: For ads that were not aligned with intent, putting the ad in the middle of the task flow significantly increased awareness and memory for the ad, but it also resulted in lower purchase intent scores — lower, in fact, than when no ad was presented at all. People noticed the ad more but had a negative emotional response to the disruption, and the advertiser paid the price. For ads that were aligned with intent, the inline ad was much more successful, improving awareness, recall, consideration set inclusion, and purchase intent.

Chapter 13: When Consumers’ Brains Go Online Because online experiences are mostly task driven, the traditional model of maximizing conscious awareness through attention, persuasion, and recall can achieve positive conscious outcomes — provided the website and all its content elements, including advertising, are aligned with the goals and intentions of the consumer. So, here’s an interesting irony: The online website, being in many ways a virtual version of the door-to-door salesman model, may be a better fit for the traditional view of advertising effectiveness through attention, persuasion, and recall than TV, the medium where the model has been applied for over half a century.

Nonconscious processing and the online experience Nonconscious processes and outcomes are fully activated by online experiences as well. Low-attention processing, priming, and implicit memory all operate alongside conscious processes as consumers engage in online experiences. Website designers and online advertisers need to understand how these processes influence consumer attitudes and behaviors in order to maximize online effectiveness and web experience satisfaction. An example of these processes at work is provided in a 2008 article titled “Unconscious Processing of Web Advertising” (http://onlinelibrary. wiley.com/doi/10.1002/dir.20110/abstract). Using a clever experimental design (see the nearby sidebar), author Chan Yun Yoo showed that conscious attention to online ads was not necessary in order for those ads to have an impact on participants’ memory, attitudes, or later brand selection behavior. Specifically, the study produced three main findings: ✓ Consumers who experienced online ads nonconsciously demonstrated observable priming effects caused by implicit memory of the ads. ✓ Consumers built more favorable attitudes toward advertised brands, regardless of whether they experienced online ads consciously or nonconsciously. ✓ Consumers who experienced online ads nonconsciously were more likely to select the advertised brand on a next-day brand choice task than were those who had no exposure to the ad (the control group). This study was one of the first to show conclusively that nonconscious processing of web ads was real, that it could occur in the absence of any conscious awareness of seeing the ad, and that it could lead to positive effects on brand attitudes and purchase intentions.

211

212

Part III: Neuromarketing in Action

How to get people to reveal memories they don’t know they have To test for implicit memory effects in his study “Unconscious Processing of Web Advertising,” Chan Yun Yoo randomly assigned participants to three groups. The first group, the control group, saw web pages with no banner ads on them. The second group saw web pages with banner ads but were given instructions that caused them to completely ignore the ads. The third group saw the same web pages and ads but were given instructions that caused them to pay explicit attention to the ads. After viewing the web pages, participants were given a word completion task in which they had to fill out incomplete words like L I _ _ and K I _ _. One of the banner ads shown on the web pages — an ad for a fictitious online movie site — mentioned the movie The Lion King. When members of the second group (who “saw” this ad but didn’t pay attention to it) completed these words with LION and KING more often than

the people who didn’t see the ad (the control group), that was evidence for implicit memory. The unattended banner ads made a nonconscious impression that caused the words LION and KING to come to mind more often than would otherwise be expected. In a second test, participants were contacted by e-mail the day after the experiment and asked to select online movie sites they would consider for renting a movie. When members of the second group picked the fictitious movie site from the unattended banner ad more often than members of the control group, this was again evidence for implicit memory effects. Even though they didn’t consciously “see” the ad, the site it advertised was recorded in memory and later activated when it appeared in the list, and it was chosen more often than would otherwise be expected.

In an online world in which the average banner-ad click-through rate is less than 0.2 percent and the average eye-tracking result shows literally no attention paid to online ads, these results represent good news. By recognizing and measuring other ways that online ads can influence consumers, neuromarketing provides a more realistic picture of how online efforts really work. Using these new techniques, advertisers and marketers can better understand how ad impressions influence consumers above and beyond explicit memory and click-through behavior.

Satisfying (Almost) All Our Needs Online It wouldn’t be an exaggeration to say that the Internet has changed almost every aspect of our daily lives. Here are three of the biggest areas of change, and how they’re impacting online marketing and website experiences: ✓ How we search: Unlike TV, which provides a passive entertainment experience, the Internet is basically an information acquisition medium.

Chapter 13: When Consumers’ Brains Go Online Just about everything we do online involves acquiring, evaluating, or comparing information, and this can have profound implications for how marketing and advertising work. ✓ How we share: The rise of social-networking sites has created many new ways to communicate with old friends and make new ones — it has even turned the word friend into a verb. People can share and align their likes and goals with their friends more easily than ever before, creating both opportunities and challenges for marketers. ✓ How we buy: For just about any type of product, the Internet can dissolve the lag time between marketing and buying. On the web, the store is the ad, and the ad is the store. The need for marketing to create memories is diminished, and the opportunities for marketing to create immediate goal satisfaction are increased.

Online search and limitless information The Internet has changed our relationship with information. In the old days (say, pre-1995), people used to get their information from aggregators who selected the information for them. Each aggregator was a destination where information was prepared by an arcane process called editing. People selected the aggregators they preferred — newspapers, magazines, the evening news — because they trusted those aggregators to give them the information they needed. Information gathering was largely a passive affair. People didn’t normally search for information; they consumed what they were offered. In the online world, passive consumption of information has been replaced by active search. The old aggregators are becoming endangered species as newspaper and magazine subscriptions decline and traditional evening news viewership shrinks. Search engines like Google and Bing put limitless information at people’s disposal. This is changing not just the amount of information available, but the way in which people interact with that information. Search, like most other online tasks, is active and goal driven. Researchers have found that people approach searching for information online in a manner very similar to how animals forage for food in the wild. They no longer rely on trusted information sources. Every website they encounter is a potential information patch that they rapidly evaluate for the quality and amount of information it offers relative to their goals. As people become more expert at this foraging behavior, many of the clues and cues they use to make their evaluations become automatic and nonconscious. Both website design and online advertising effectiveness depend on identifying and understanding how this new process of information foraging operates in practice. It’s very different from the passive information gathering techniques consumers used in the pre-Internet era. Explicit intentions and

213

214

Part III: Neuromarketing in Action consciously pursued tasks are central to information foraging, but nonconscious processes that occur rapidly and automatically play a key role as well, making this a research area ready-made for an integrated blend of traditional and neuromarketing techniques.

Social networking and limitless sharing The Internet has also changed how we relate to other people, making a significant impact on how we share and how we form preferences. In the old days, advertisers enjoyed simple one-way communications with their consumers, with the nature and timing of those communications under their direct control. The first-generation Internet changed all that by making it incredibly easy to establish two-way communications between advertisers and consumers, with control now shifting back and forth between the two. Life got more complicated. Then along came social networking to add a third player (actually, a network of players) to the situation — a wide range of friends and acquaintances who are in essentially instantaneous communication with each other, and who seem to have an insatiable desire to document and share every detail of their lives, including who they like, what they like, where they go, and what they buy. Neuroscientists have recently learned something that should be unsurprising to dedicated Facebook users: Talking about ourselves to others is intrinsically rewarding. It activates the same reward circuitry in our brains as eating, receiving money, and having sex. Social-networking sites have tapped into this deep propensity in human nature, giving each of us a virtual soapbox to share our most intimate thoughts with hundreds, if not millions, of people. The impact of all this sharing on marketing and advertising is to make the processes of persuasion and choice much more complicated. As the number of choices we face every day multiplies, and as our ability to access the preferences of our trusted peers online becomes easier, the messages we receive from advertisers and marketers become less relevant to how we decide. Some commentators have gone so far as to speculate that choice in the social-networking world of the future will become more mimicry than decision making. Copying the behavior or decisions of others is a strategy that appeals to our cognitive miser brains. Whether we copy the preferences of known friends or people in general, the net effect will be a less predictable world, in which what is popular is popular because it is popular, not because of its intrinsic qualities, brand reputation, or unique selling proposition. At a minimum, this is a world in which the power of brand loyalty may be weakened by the power of social conformity.

Chapter 13: When Consumers’ Brains Go Online

Online shopping and limitless choice One of the unique characteristics of online marketing is the disappearing gap between advertising and buying. An additional aspect of this development is the explosion of choice in the online marketplace. Pick just about any product in any category, and the Internet offers not only the opportunity to immediately buy that product, but a limitless array of offers to choose from, plus interactive tools to compare any offer with any other. A simple search for toaster ovens, for example, yields over 6,000 results, with options to sort and compare by availability, price, brand, cooking method, size, features, and retail store. In addition, the results page helpfully suggests several related product categories to consider, including toasters, microwave ovens, sandwich makers, waffle irons, and drip coffee makers. Given this overabundance of choice available at our fingertips, the question naturally arises: How does limitless choice impact our human capacity to make decisions? Social psychologists and decision scientists have begun looking at this question, and the results show that excessive choice can have several implications for consumer decision making: ✓ Decision avoidance: When confronted with too much choice, consumers often choose not to choose. ✓ Reliance on habits: Habitual buying gives shoppers a way to avoid complex choices by relying on selections that have worked in the past. ✓ Reliance on others: People become more dependent on the opinions of others when they can’t disentangle complex choices on their own. ✓ Decreased self-control: When consumers do make complex choices, the process is mentally exhausting, often resulting in willpower depletion (see Chapter 7), less self-control, and greater impulsiveness. ✓ Greater dependence on heuristics: In a state of willpower depletion, consumers are more likely to rely on heuristics that bypass rational System 2 decision-making capabilities (see Chapter 8). In summary, limitless online choice places significant burdens on our human decision-making abilities. Faced with too much choice, we tend to avoid choice altogether, or revert to implicit System 1 decision making. This is a challenging situation, but one that gives website designers an opportunity to develop decision support tools that simplify complex choice and return choice control to consumers. Indeed, this is an area where neuromarketers and website designers can combine forces to provide real value to online shoppers, as well as online retailers, marketers, and advertisers.

215

216

Part III: Neuromarketing in Action

How to Use Neuromarketing to Test Online Experiences and Marketing Effectiveness Neuromarketing has not been applied extensively to the study of online marketing and web experience. Some commentators have expressed the view that neuromarketing is overkill for understanding online activity. We disagree, and in this chapter we give numerous examples of how nonconscious processes, emotional markers, priming, implicit memory, and intuitive choice significantly impact online behavior. Over time, we expect neuromarketing methods to become more prominent research tools for both online marketing researchers and website designers.

Testing online ad effectiveness Eye tracking is indispensible for online ad testing, but it isn’t a complete solution. First, it doesn’t track peripheral vision, so it misses ad impressions that occur outside the central gaze pattern. Second, eye tracking can’t tell why a viewer is focusing on a particular area of a web page. Supplementary methods, such as the following, need to be used to assess whether gaze fixations are a function of positive or negative emotional responses: ✓ Facial expression analysis: Synchronizing changes in observable facial expressions with gaze fixations can provide clues as to the direction of emotional responses. ✓ Electromyography (EMG): At a more precise level, involuntary activation of the “frown” and “smile” muscles can reliably indicate whether a fixation is associated with positive or negative emotions. Direct brain response methodologies, such as electroencephalography (EEG) and functional magnetic resonance imaging (fMRI), may be less useful for online ad testing, because they require more elaborate experimental procedures to separate ad effects from the effects of other elements on a web page. They also tend to be more expensive and time consuming. Because alignment with consumer intent is central to the effectiveness of online ads, viewer intent needs to be built into ad-testing designs. This may require incorporating both implicit and explicit measures, such as implicit memory tests and measures of explicit attitudes, behaviors, and intentions.

Chapter 13: When Consumers’ Brains Go Online

Testing website ease of use Eye tracking, EMG, and facial recognition have all been used successfully to test website experiences in conjunction with traditional methods like video recording and talk-aloud. Because testing can cover long periods of time, EEG and fMRI are typically impractical due to comfort issues. Website testing, like online ad testing, should be done in relation to an explicit goal or task to yield meaningful results.

217

218

Part III: Neuromarketing in Action

Chapter 14

Entertainment Effectiveness In This Chapter ▶ Appreciating the power of stories to entertain and persuade ▶ Understanding why our brains are attracted to movies and video games ▶ Discovering how product placement works, and why it’s a growing practice in

entertainment

▶ Seeing how neuromarketing can be used to test entertainment effectiveness

T

he media and entertainment industries are massive in their own right. In addition, marketers from other industry sectors are tapping into the connections these industries build with consumers to promote their own brands and products. This is an area where neuromarketing is just beginning to play a role, providing a different perspective on how stories in general, and movies and games in particular, create experiences in people’s minds, both consciously and nonconsciously, that can significantly impact their attitudes, preferences, and actions. Understanding these impacts is important to marketers and researchers, not only because storytelling is big business, but because it’s a major delivery medium for attitude and behavior change, the heart and soul of marketing. Because a story isn’t an obvious persuasive message, it’s often able to persuade us in ways traditional persuasive messaging (such as advertising) cannot. Marketers are catching on to this, and consumers should as well. In this chapter, we look at four aspects of entertainment effectiveness: ✓ How stories capture our minds and imaginations ✓ How movies engage us as an audience, not just as individuals ✓ How product placement works in different media ✓ How video games represent a new kind of entertainment that transitions us from entertainment observers to entertainment participants We conclude with a brief description of neuromarketing methods and techniques that are being applied to test these different types of entertainment experiences.

220

Part III: Neuromarketing in Action

Why Our Brains Like Stories The attraction of stories to the human brain appears to be deeply embedded in our biological reward systems. Anyone who has ever read the same story to a toddler a hundred times knows this to be true. Brain scientists have explored this question in detail and have come up with three main benefits that stories provide to the human brain: ✓ Stories activate empathy. Reading or watching stories allows us to experience the feelings of others as if they were our own. ✓ Stories let us simulate situations we haven’t experienced directly. Reading or watching stories allows us to experience situations, times, and places that we could never experience ourselves. ✓ Stories persuade us and help us to learn. Stories have a structure, level of detail, and connectivity of elements that make remembering them and the lessons they entail much easier than when information is organized in less accessible ways. Empathy is the ability to imagine what other people are thinking and feeling. Neuroscientists have discovered that this ability is associated with a network of cells in the brain called the mirror neuron system (neuron is another word for brain cell). Mirror neurons are activated when we do a physical activity, like peel a banana. What’s interesting is that these same neurons are also activated when we see someone else peel a banana. Mirror neurons allow us to both understand other people’s actions and repeat those actions on our own. They also allow us to feel other people’s emotions as if they were our own — that is, they allow us to empathize with others. One source of a story’s power is its ability to activate these neurons, to translate a series of words on a page or visual images on a screen into a shared emotional experience. In a good story, we can literally feel what’s happening and the emotions experienced by the characters, thanks to our mirror neurons. Empathy turns these emotional signals into curiosity about how a story may end. Our emotional connection to the story draws us in, suppressing our awareness of our actual surroundings, allowing us to escape into the unreal, but realistically experienced world of the story. Social psychologists call this feeling transportation, but not in the sense of riding a train. It’s the feeling of being transported out of ordinary reality to a reality of the imagination. As we explain in the “Stories and persuasion” section, later in this chapter, it has a lot to do with the power of stories to persuade us. This ability to be transported into a story also helps explain why stories are so useful for simulating alternative realities and situations in our minds. An effective narrative offers an important advantage over reality: It delivers

Chapter 14: Entertainment Effectiveness sensory experiences and allows us to feel other people’s emotions, but without real physical risk. Most people will never climb Mount Everest, but they can simulate what it must be like by reading the accounts of climbers, all in the safety of their living rooms.

That reminds me of a story . . . An effective narrative allows us to feel the emotions of its characters, but it also can activate other parts of our brains. For example, research has shown that reading words like lavender, cinnamon, perfume, coffee, or soap activates areas of the brain where smells are processed (called the primary olfactory cortex), exactly as if we were actually smelling them. A metaphor like “The singer had a velvet voice” or “He had leathery hands” activates areas of the brain where we process touch (the sensory cortex). And words describing motion, like “Kick the ball,” activate the areas of the brain that control body movement (the motor cortex). These are all good examples of how the brain acts as a simulation machine to help us understand the world around us (see Chapter 6). Language is a relatively new capability for mammal brains, which evolved for millions of years without it. It’s rather clever that we’ve repurposed some of our old brain machinery to make sense of this new type of input. In the same way we understand peeling a banana by watching someone do it, we can also understand peeling a banana by listening to someone describe it. From a brain processing perspective, there isn’t much difference between reading about an experience, watching it depicted in a movie, and experiencing it ourselves. In each case, the same neurological areas are activated. In these and other cases, a narrative activates a wide range of memories that have been shaped by earlier experiences. We can only feel certain emotions and replicate sensory experiences because we’ve had them before. By tapping into these emotional memories, an effective narrative can integrate past real-world experiences into the new imaginary context it creates in our minds. Activating our memories of actual experiences as they’re reflected in the story helps transport us into this imaginary world. Experiencing stories and narratives in this deep way provides valuable opportunities for learning — without suffering the sometimes bruising consequences of learning in the real world. Reading provides limitless examples of engaging with different types of people, exploring the thoughts and feelings of others, and seeing how situations we’ve never experienced might play out if we did experience them. It isn’t surprising that researchers have found that people who frequently read fiction display a higher degree of empathy for others and are able and willing to see the world from perspectives other than their own.

221

222

Part III: Neuromarketing in Action

Pacing and the brain Since the first stories were told around campfires, orators and storytellers have known that pacing and timing are critical to maintaining interest in a narrative. In particular, a good story carefully lays out an alternating sequence of tension and resolution at various scales throughout the story — from the structure of a single sentence or scene to the overall arc of the story, from the introduction of a problem, to the depiction of obstacles resulting from the problem, to the problem’s resolution and the experience’s impact on the characters. From a brain processing point of view, this back and forth between tension and resolution can be measured in terms of emotional arousal, as defined in Chapter 6. Arousal is the feeling of intensity or stimulation that accompanies the direct experience of tension, and a drop in arousal is one byproduct of the reward of experiencing a resolution. So, the pace of a story can be measured with arousal measures like electrodermal activity (EDA) and pupil dilation (for more details, see Chapter 16). This has important implications for testing stories in entertainment. The pacing of a story matters, because the wrong pace is likely to disrupt the recipient’s immersion in the imaginary world. Research has shown that mirror neurons are only activated by behavior that is perceived as purposeful. A story is likely to be seen as lacking purpose when the pace is too slow. Boredom sets in and the imaginary world crumbles. Confusion is likely to result when the story moves too quickly, forcing the recipient to resort to cognitive thought to work out what’s happening. This will also destroy the imaginary world created by the story, or may prevent the story from engaging the imagination in the first place. Pace is, therefore, of critical importance because it can enhance or destroy the ability of a story to transport us out of our current reality.

Stories and persuasion Studies of stories’ ability to transport us into an imaginary world have found a strong relationship between degree of transport and persuasion. When people are deeply transported into a narrative, they find fewer flaws in the story and are more likely to hold beliefs and make evaluations that align with beliefs and evaluations expressed in the story. In contrast, when people are less transported by the story, they’re less likely to hold story-consistent beliefs and evaluations. Interestingly, these results remain consistent whether the story is labeled as fact or fiction. We can understand these findings in light of our discussion of judgment and decision making in Chapter 8. As we show in that chapter, people’s

Chapter 14: Entertainment Effectiveness judgments often are based more on nonconscious feelings than conscious deliberations — that is, they’re governed more by System 1 than System 2 thinking. And when people aren’t engaged in deliberation — as they aren’t when absorbed in a story — they’re less likely to process statements and claims logically, so they’re less likely to generate counterarguments to beliefs and evaluations encountered. This is why stories have caught the attention of marketers. They present the intriguing possibility of persuading without appearing to be persuading. When deeply immersed in a story, a reader or viewer is more receptive to ideas expressed in the story than he might otherwise be. In fact, while immersed in a story, his pre-existing beliefs and opinions are relatively inaccessible. Which makes marketers extremely curious about how consumers respond to Brad Pitt driving a Prius in a movie, compared to Brad Pitt pitching a Prius in a TV spot. One place where the question of story persuasiveness has huge implications is in the courtroom, where lawyers and prosecutors try to convince jurors with stories depicting their case. Examining winning and losing legal arguments, psychologists Philip Mazzocco and Melanie Green have identified a number of factors that seem to improve a narrative’s ability to persuade: ✓ Immersive imagery: The story has to deliver enough detail to allow the listener to picture the characters and scenes. ✓ Realism: There has to be a connection to reality that allows the recipient to follow the story. Otherwise, the story doesn’t make sense, bringing the recipient back to reality. ✓ Structure: A good story has a beginning, a middle, and an end. A story that is confusing or that doesn’t follow a natural flow is likely to require more mental effort to be understood, which is likely to diminish its ability to transport its audience. ✓ Isolation from surroundings: The immersion in the imaginary world can be interrupted by extraneous disturbances, such as loud conversations by others, screaming children, or other background noise. ✓ Lack of awareness: When recipients become aware that the purpose of the story is to influence their own attitudes, beliefs, or values (for example, the message of an advertisement), they’re taken into deliberation mode and allocate mental resources to resist the message.

Neuromarketing Goes to the Movies Movies, which use multisensory inputs and a highly optimized viewing environment (when viewed in a theater), are particularly powerful vehicles for delivering narratives. How movies influence audiences — while at the same time entertaining them — is a multi-billion-dollar question for both the movie

223

224

Part III: Neuromarketing in Action industry and other industries that want to present their products within the imaginary worlds that movies create. In this section, we look at three ways neuromarketing research techniques are being used in the movie business: ✓ Testing how well movies create shared entertainment experiences ✓ Helping design persuasive trailers ✓ Measuring the ability of movies to influence consumer behavior

How movies synchronize our brains Suppose you and your next-door neighbor watch the same movie. Is it possible to tell whether the two of you are having roughly the same experience, or whether you’re experiencing the movie in highly different ways? Neuroscientists in a new field called neurocinematics have begun looking at this question by measuring people’s brain activity while they’re watching movies. They’re finding that it’s a mix of both: Some brain areas seem to synchronize (that is, activate in the same way at the same times), while other brain areas seem to activate differently for different individuals. So, it appears that movies do have some ability to synchronize our minds, as well as our eye movements. But that level of synchronization apparently differs as a function of movie content, editing, and directing style. In a study published in 2008, neuroscientist Uri Hasson and his colleagues recorded participants’ brain images in a functional magnetic resonance imaging (fMRI) machine while they viewed short excerpts of movies and TV shows. The researchers analyzed not only the brains of each individual but also the extent to which the participants shared the same brain responses at the same moments in the videos. The findings showed that some films produced considerable synchronization of viewers’ brain activity and eye movements, aligning brain responses and associated mental experiences — perceptions, emotions, thoughts, and attitudes — in response to the unfolding story on the screen. However, this effect was found to vary considerably by type of film. An episode of Larry David’s comedy Curb Your Enthusiasm synchronized only 18 percent of viewers’ brain activity, while an episode of the suspense drama Alfred Hitchcock Presents synchronized 65 percent of brain activity across viewers. In contrast, a one-shot video of New York City’s Washington Square Park, which employed no cinematic devices such as pans, cuts, or close-ups, achieved synchronization of only 5 percent of viewers’ brain activity. These findings suggest some tentative conclusions: ✓ People respond more similarly to highly arousing, suspenseful stories, perhaps because responses to these fight-or-flight narratives are largely automatic and outside our voluntary control.

Chapter 14: Entertainment Effectiveness ✓ People respond in a less synchronized way to comedy, perhaps because humor is more idiosyncratic and based on personal experiences, which may vary considerably from person to person. ✓ A mechanical reproduction of reality, without any cinematic intention or intervention (as represented by the Washington Square video), is not sufficiently compelling to synchronize viewers’ brain activity.

Research such as this opens up a wide area of opportunity for developing objective measures of entertainment effectiveness. Instead of just asking people whether they liked a movie, we can measure the extent to which the movie evoked synchronized brain responses across a cross section of people. The greater the synchronization, the more likely the film is achieving its narrative goals.

How trailers trigger nonconscious goals A movie trailer is a two-and-a-half-minute mini-movie with one purpose: to get its viewers to go see the movie it describes. As a piece of persuasive messaging, a trailer has to accomplish a number of objectives to achieve its purpose: ✓ It must provide a lot of basic information. This information includes the movie’s genre, its central characters, the actors who perform in it, its location in time and space, and the essence of its plot. ✓ It must convey the emotional tone of the movie. Viewers need to know whether the movie is funny, scary, suspenseful, mysterious, romantic, and so on. ✓ Most important, it must activate a motivational goal. It must leave the viewer with a conscious or nonconscious goal that can only be satisfied by seeing the whole movie. Trailers have historically been tested with old-fashioned self-reporting methods. People are brought into a theater, shown the trailer (or ten of them), and then asked whether they would go to the movie and why. Neuromarketing techniques bring a different perspective to trailer testing, focusing on how the trailer activates nonconscious and conscious responses in the viewer, such as impressions of novelty and familiarity, nonconscious emotional reactions to different scenes, fluctuations in attention and interest, memory activation, approach or avoidance motivations, and audience synchronization. These techniques provide a battery of summary and moment-to-moment measures that can be used not only to evaluate a trailer’s effectiveness, but also to fine-tune the trailer so it can be made more effective and, ultimately, more persuasive.

225

226

Part III: Neuromarketing in Action The unique insight that brain science and neuromarketing bring to movietrailer testing is the idea that a trailer can be designed to act as a prime to trigger nonconscious motivational goals, exactly as described in Chapter 7. There are a number of ways a trailer can activate nonconscious goals: ✓ The trailer can trigger our brains’ natural attraction to movies as inherently rewarding experiences that can transport us out of ordinary reality into imaginative reality. To do this, the trailer has to deliver the impression that this movie will be transporting for me. If it does this (by successfully triggering a sense of emotional connection or wonder about the world of the movie), it can activate a powerful goal to seek out and view the movie. ✓ The trailer can trigger memories of actors or a director the viewer has enjoyed in the past, thus activating the goal to repeat those prior positive experiences. ✓ The trailer can pose a question or sketch a conflict or challenge that arouses the viewer’s curiosity. Wanting to know how the story will end can activate a strong motivational goal to see the movie. ✓ The trailer can activate social goals by subtly reminding viewers that their friends will want to see this movie and that they may enjoy higher social status or other self-enhancing goals by seeing the movie. ✓ The trailer can activate prior experiences with a movie studio. Studios are brands that can trigger distinct associations for movies they produce. Just knowing a movie is from Disney, for example, may prime a viewing goal in a child or parent of a child. Strong studio brands that are associated with particular values or types of movies, such as Marvel or Pixar, may also activate particular values or create expectations that can translate into goal activation to see a movie. As detailed in Chapter 7, a nonconscious goal, once activated, will be pursued until it’s satisfied or abandoned. It will be resumed if interrupted and rerouted if confronted by an obstacle. And it will become stronger the longer it remains unsatisfied. Given these attributes, it isn’t surprising that movie makers and marketers have become extremely interested in how trailers can be constructed to activate nonconscious goals and tested to see if they’re succeeding in doing so.

How movies influence behavior Movies should be a natural source of behavioral priming, influencing both nonconscious goals and subsequent behaviors. Coming out of a superhero movie, don’t we all feel a little more empowered, a little more able to accomplish whatever goals we’re pursuing in our lives? And doesn’t that affect how we think and act, at least for a little while?

Chapter 14: Entertainment Effectiveness But the academic literature on nonconscious processing hasn’t explored the priming effects of movie viewing, probably because movies are too rich a source of priming to be used in controlled experiments. Because so many goals and behaviors may be primed by a movie experience, separate impacts can’t be unraveled and measured in a controlled study. We do know from other research that movies and related entertainment experiences can influence behavior. For example, many studies of aggressive behavior and violent media have found that exposure to violent movies and TV shows can cause an increase in aggressive and violent behavior in children and adults. Although the exact nature of this connection is subject to ongoing debate, the existence of a priming effect is not disputed. Given the general way that priming works, it’s also likely that movies can prime pro-social or altruistic behavior. Certainly this kind of effect has been seen with other, less complex types of primes. For example, we describe an experiment in Chapter 5 in which simply having a backpack on the table (versus a briefcase) primes more cooperative behavior among college students in a bargaining game. Positive behavior priming by movies is a fascinating topic we expect to see covered in much more depth in future neuromarketing research. One type of movie priming that has been explored in some detail is the effect of movie experiences on consumer behavior. Here most of the focus has been on product or brand placement, and how such placements impact later product choice. Some positive effects have been observed, as we describe in the next section.

Product Placement in Movies, TV Shows, and Beyond Products seem to be popping up everywhere in entertainment these days. Not just in movies and TV shows, where they’ve become standard fare, but in other kinds of media as well, such as video games, music videos, online videos, magazine articles, and clothing. They’ve even begun to appear in places that would’ve been unthinkable only a few years ago, like novels, comic books, and Broadway plays. Product placement has become big business, with costs ranging from $10,000 to hundreds of thousands of dollars per exposure. Global expenditures for product placement were estimated at over $8 billion in 2012, with over 75 percent of U.S. prime-time TV shows now using product placements in their episodes.

227

228

Part III: Neuromarketing in Action One reason consistently cited for the growth in product placement is the fact that over 40 percent of U.S. homes now have digital video recorders (DVRs), which allow TV viewers to fast-forward through ads. In order to reach those consumers who may be voluntarily diminishing their traditional ad input, marketers have zeroed in on the next best thing, placing their products directly into the entertainment itself. But does it work?

Neuromarketing principles behind product placement Neuromarketing and its underlying brain sciences tell us that product placement should work, but not in a way that can be easily measured by traditional survey research techniques. Although many researchers try to measure the effects of product placement using verbal self-reports of attention, interest, awareness, recall, recognition, attitude change, and purchase intent, these measures are likely to underestimate or miss the most important effects of product placement because they can’t measure the key brain processes involved. From a neuromarketing perspective, there are two critical outcomes of a product placement: ✓ The activation of a brand memory in the consumer’s mind, which may be implicit ✓ The conversion of that brand memory into a purchase, which may not occur until long after The connection between the brand memory and purchase behavior is goal activation, possibly a conscious goal that the consumer is aware of, but more likely a nonconscious goal primed by the product placement below the consumer’s conscious awareness. A product placement is more likely to achieve this conversion if three features are present: ✓ The product placement strengthens an existing brand memory instead of forming a new one. It’s rare for product placement to be used for a new brand or product. ✓ It leverages existing associations with that brand, preferably in fresh and novel ways (such as was done with the placement of BMW cars in James Bond movies). ✓ These new associations link to the brand with strong, positive emotions. A benefit enjoyed by product placements that are not available to traditional advertising is the fact that the product is presented within a narrative story. As described earlier in this chapter, the more deeply a viewer is transported

Chapter 14: Entertainment Effectiveness by an engaging narrative, the less access he’ll have to deliberative and logical thinking about what he’s watching. This means he’ll be more receptive to the ideas presented in the story and less questioning of any claims made or implied as a part of the narrative. When product placement is added to this mix, the implication is clear: Reactions to the product may bypass the vigilance and counterarguing that would normally be triggered if the product were appearing in a traditional ad. In effect, the story placement allows the product to ride on top of the receptive feelings produced by the narrative, allowing it to share in the suspension of disbelief that accompanies any deeply transporting narrative experience. The enhanced persuasion that has been found to accompany transporting narratives is suddenly available to the product as well. Neuromarketing also helps us understand how a memory created by not paying attention to something can show up influencing purchasing behavior at a later time. The mechanism, introduced in Chapter 5, is implicit memory, the effortless, automatic, unintentional form of memory that accompanies much of our brains’ nonconscious processing.

Product placement gets results As an indirect measure, the rapidly rising marketing expenditures being put into product placement provide strong evidence that advertisers feel they’re getting something for their money. Academic research on product placement also generally finds that it works, even though much of this work relies on explicit memory measures only. One recent study that examined both implicit and explicit effects of product placement strongly supported the effectiveness of the practice. Researchers Yang and Roskos-Ewoldsen looked at three types of product placement: products integrated into the storyline, products used by a character, and products appearing in the background. Measuring explicit memory, implicit memory, and later product selection, they found support for strong product placement effects: ✓ When a product was part of the story or used by a character, viewers had better explicit memory for it than when it appeared in the background only. ✓ When viewers had seen a product, they were more likely to fill in a partially completed word with the product brand name (for example, “COKE” for “C _ K E”) than viewers who hadn’t seen that product. This was true no matter how the product was used in the story. ✓ When offered a product choice after completing the experiment, viewers were more likely to pick the product they had seen in the story. Again, this was true no matter how the product was used in the story.

229

230

Part III: Neuromarketing in Action

The Future of Entertainment: Immersive Games and Simulations The year 2008 was a landmark for the video-game industry — it was the year worldwide video-game sales first surpassed movie sales. Video games represent something fundamentally new in the evolution of entertainment: the transition from viewer to player at the center of the entertainment experience. Ever-accelerating computer technology has enabled game designers to enhance the realism of gaming environments and the power of games to immerse players in simulated worlds and stories. Interactivity and the ability to control the flow of a game through player actions have added another dimension unavailable in traditional, passive-media experiences, such as TV or movies. Video games, with their rapid, immersive, emotionally charged, interactive experiences, are natural targets for neuromarketing research because it’s almost impossible for people to describe what they’re feeling as they engage in such an experience.

Immersion and “presence” in online and video games We’ve seen how movies can transport a viewer into an imaginary world, delivering quasi-experiences. Games can take this immersive effect to an even higher level by allowing players to become active participants in the imaginary world created. In gaming research, the term presence is often used to describe the immersive experience created by the game. Presence is the degree to which the player feels she’s fully transported into the game experience. Full presence means the player has become unaware of her actual physical surroundings and is focused almost exclusively on sensory inputs coming from the game. Presence in gaming has been studied extensively. One source of greater experienced presence is the technical quality of the game, including its screen resolution and responsiveness to the player’s actions. As games have gotten more sophisticated, a strong positive effect of story or narrative on presence has also been observed. In a study comparing story-driven and non-storydriven games, it was found that story increased not only sense of presence, but also emotional arousal, identification with characters, and overall satisfaction with the gameplay experience. Adding narratives to games definitely appears to make them more interactive, more immersive, and more involving, as a brain science perspective would predict.

Chapter 14: Entertainment Effectiveness

Product placement in immersive games Several studies have examined the role of product and brand placement within video games. For the most part, the results have been similar to those for product placement in movies. In-game product placement succeeds when ✓ It aligns with the type and mood of the game. ✓ It doesn’t disrupt the game’s flow or delay the game’s rewards. ✓ It feels like a natural extension of the game. As in other forms of entertainment, as long as the immersive experience is not disrupted by the product placement, a less vigilant mind-set induced by the experience appears to increase nonconscious priming of product-friendly goals, improve attitudes, and increase product and brand purchasing.

Getting back to planet Earth: Aftereffects of game immersion Researchers have reported several significant aftereffects of immersive gaming, some of which seem to be beneficial, and others of which seem to be worrisome. On the beneficial side, playing video games appears to increase perceptual skills and hand-eye coordination. Studies have found that habitual game players have faster reflexes, better peripheral vision, increased visual attention, and greater spatial discrimination than nonplayers. Such findings help explain otherwise puzzling results like the observation that some surgeons who excel at video games make 47 percent fewer errors and work 39 percent faster than their peers. Results with regard to social behavior are more mixed. Most of this research has focused on the aftereffects of playing violent games, and these, like the violence-and-movies studies, have found evidence of increased antisocial behavior after playing violent games, among both children and adults. Scientists also have expressed concerns that games may contribute to declining empathy levels. In contrast, studies of collaboration in multiplayer games have found that players can act more cooperatively in real life after engaging in cooperative behavior in a video game. Looking at these results from the perspective of neuromarketing and brain science, this mix of positive and negative effects of gaming is not surprising. One thing modern brain science tells us is that we’re much more influenced by whatever situation we’re in and whatever task we’re performing than we’re able to recognize consciously. These impacts are usually relatively short-lived.

231

232

Part III: Neuromarketing in Action Longer-term impacts deserve ongoing study as well, but they usually involve not just a situational cue, but an individual personality issue as well, so they can’t be simplistically attributed to gaming by itself.

Using Neuromarketing to Test Entertainment Unlike testing marketing materials, where effectiveness is ultimately a function of later behavior (choice, purchase), entertainment testing is mostly about whether the experience right now is effective. So, the focus, for the most part, is on immediate, moment-to-moment measures, as well as on how those measures play out over the duration of the experience, rather than in any single moment.

Measuring physiological responses to entertainment Transport, immersion, and presence are all highly emotional experiences. Arousal, the pace of tension and release, and the ebb and flow of emotional valence (pleasure, displeasure) are all critical to the quality of the experience. Given these criteria, biometric measures such as the following have generally been the method of choice for measuring entertainment: ✓ EDA: Measures the production of perspiration on the skin. It’s a reliable measure of emotional arousal, especially over longer time frames. It’s simple to administer, and it has been employed in many entertainment studies. ✓ Electromyography (EMG): Measures micro-muscle movement. It’s a reliable measure of emotional valence, and it also performs well over longer time frames. EMG is usually applied to the “smile” or “frown” muscles, but it can also be applied to other muscles, like neck, shoulder, and jaw, which tend to be involved in states of anxiety and tension. It has also been employed in a large number of entertainment studies. Other biometric measures that have been found to provide useful information on emotional responses to entertainment include pupil dilation, heart rate, and respiration.

Chapter 14: Entertainment Effectiveness

Measuring brain and behavioral responses to entertainment Examples of brain-response methods being applied to entertainment testing are less common: ✓ fMRI: Has been used in some very sophisticated entertainment studies, like the audience synchronization study described in the section “How movies synchronize our brains,” earlier in this chapter. But it suffers from being a very unnatural and uncomfortable setting for longer-duration testing. ✓ Electroencephalography (EEG): Has been used only infrequently for entertainment testing, in part because of issues with longer-duration testing, due to its sensitivity to body movement and muscle tension, both of which are common when engaged in a highly arousing entertainment experience. Behavioral testing is less relevant to measuring entertainment experience in the moment. But when aftereffects are the focus — such as when testing whether product placement is impacting implicit memory or product choice — behavioral testing is the only way to go.

233

234

Part III: Neuromarketing in Action

Part IV

Measuring Consumer Response with Neuromarketing

H

In this part . . .

ere, we look at the full spectrum of available market research methodologies, from the most traditional to the most cutting-edge. We explain how they work, what they’re good for, and when to use them. We begin with classic “self-reporting” techniques, in which people answer questions about what they think, how they feel, what they’ve done in the past, and what they expect to do in the future. Then we compare these techniques with newer neuromarketing approaches that monitor signals from the body and brain to identify emotional responses, motivations, and likely future behaviors of consumers. Neuromarketing studies can be costly, so we devote a chapter to some inexpensive techniques that can be used by almost any business to gain a better understanding of customers, products, brands, and marketing efforts. The final chapter in this part provides a checklist and guidelines for matching the most appropriate methodologies to your specific research needs.

Chapter 15

Traditional Approaches: Why Not Just Ask People? In This Chapter ▶ Understanding why consumers often don’t know what they think, but believe they do ▶ Asking questions consumers are more likely to answer truthfully and accurately ▶ Identifying the pros and cons of the three workhorses of traditional market research ▶ Appreciating why we need to measure both conscious and nonconscious consumer

responses

I

n this chapter, we review traditional market research approaches, which generally share the same underlying idea: If you want to understand consumers’ attitudes, opinions, preferences, and product choices, just ask them. Earlier in this book, we show how this self-evident idea is challenged in many ways by recent brain science, and how neuromarketing has risen, at least in part, as an alternative way to deal with the very counterintuitive discovery that human beings actually have very little awareness of why they do the things they do. So, when people are asked what brands they like or what they’ll buy in the future, their answers are often no better than guesses. For the most part, when people make these guesses, they aren’t lying or trying to deceive researchers — they’re literally unaware of the real causes and reasons for their opinions or actions. In Chapter 2, we also introduce a further complication: People not only make up plausible explanations of their mental states, but they vastly overestimate the accuracy of their own reports. Scientists call this confabulation (the replacement of a gap in our memories with a made-up substitute that we truly believe to be true). Countering confabulation is probably the most important justification for the development and adoption of neuromarketing research techniques.

238

Part IV: Measuring Consumer Response with Neuromarketing

Given these challenges, you may think that neuromarketers would advise marketers never to ask questions, but this is not the case. People’s responses to researchers’ questions — whether in an interview, a focus group, or a survey — are still incredibly valuable data points. Learning what people think they think, even when you know their answers may be poor predictors of actual future behavior, is extremely useful because it tells you what aspects of their nonconscious mental processes have risen to the level of their conscious thoughts and expressions. The trick is to listen carefully to what people say, but not necessarily to believe them.

Understanding Why Asking Questions Is Risky Business Market researchers have known for years that people sometimes fail to tell the truth in response to research questions. This is called response bias, because incorrect answers bias (or distort) the results of the research. Several types of response bias have been documented and studied by psychologists, including the following: ✓ Agreeableness bias: People like to be agreeable. If they think they know what answer will please the researcher, they’re more likely to give it. ✓ Social desirability bias: People like to express opinions that they believe are socially acceptable. If they have an opinion they think others don’t share, they’re less likely to reveal it. ✓ Knowledge exposure bias: People don’t like to reveal what they don’t know. If they don’t have an opinion, they may just make one up so they don’t appear ignorant. ✓ Misinformation bias: Sometimes people are just contrary, and give deliberately false answers because they don’t like being questioned. This has become a more frequent problem with people who are deluged by surveys, like voters in primary election states in the United States. All these sources of bias share the feature that they involve deliberate deception on the part of the person being questioned. In other words, people know they aren’t giving truthful answers in each of these cases. Researchers have developed various techniques to minimize these types of inaccuracy, so they’re all to some degree controllable within the overall question-asking model. More troublesome are sources of bias that people aren’t aware of. These are the guesses that people make — and believe are true — because they don’t have access to the nonconscious processes that underlie their conscious

Chapter 15: Traditional Approaches: Why Not Just Ask People? thinking. There are three major types of bias, and each one impacts an important kind of question that researchers ask all the time: ✓ Memory bias: Researchers regularly ask people about their past experiences with a product or brand. But the answers that people give can be inaccurate because memories are constructed and subject to distortion based on many factors, including immediate needs and desires. This is not to say that memories are always or even regularly wrong, but inducing false memories is very easy (see Chapter 6). The bottom line for researchers is that memories can be reliably accessed, especially if they’re relatively recent in time and emotionally relevant, but they can also be influenced easily by questioning or priming if researchers aren’t careful. ✓ Emotion (and preference) access bias: Researchers are always asking people what they like and don’t like. But our understanding of our emotional states, like our memories, is largely constructed. When asked a relatively simple question like “How much do you like broccoli?”, we don’t have direct access to the answer. Instead, we ask ourselves how much we like broccoli and, like detectives, we start assembling evidence from our experience. This is a highly selective and biased deliberative process, so the answer may not be accurate even though we believe at the moment it is. Questions about preferences suffer from a similar problem. Preferences are much less stable than we think they are (see Chapter 8), so we often construct them when we’re asked to do so. ✓ Prediction bias: Researchers regularly ask people what they’ll do in the future. But predicting the future accesses both the memory and emotion constructive systems, and adds another. We try to imagine what we’ve done in the past, we try to estimate what our feelings will be in the future, and from that we try to make an educated guess as to what we may do in the future. Mountains of research have documented that these predictions are seldom accurate. This shouldn’t be surprising, because all the assumptions on which the predictions are based are faulty. Yet, we tend to have completely unjustified confidence in our predictions.

Given all these obstacles to getting accurate responses from consumers, it’s fair to wonder whether there are ways to ask questions that may minimize some of these obstacles. In fact, there are. Researchers interested in understanding how and when attitudes predict actual behavior — such as whether pro-environmental attitudes lead to behaviors like recycling — have developed guidelines for asking people about attitudes, called the Theory of Planned Behavior. These guidelines are useful for any type of methodology that aims to predict behavior from interviews or survey questions:

✓ Ask about attitudes toward specific behaviors, not attitudes in general. When people are asked to recall how they actually behaved in the past, they’re more likely to accurately infer their attitudes. Instead of asking, “How much do you like broccoli?”, ask, “How often do you cook broccoli?”

239

240

Part IV: Measuring Consumer Response with Neuromarketing ✓ Ask about the attitudes of relevant peer groups, not personal attitudes. Asking people what others think is a good way to get them to express their own beliefs without having to feel accountable for them. For example, ask, “How popular do you think broccoli is as a dinner vegetable for moms in your neighborhood?” ✓ Ask about control factors that can help or impede behaviors. These questions provide a way to evaluate situational factors that may contribute to behavior. For example, ask, “How expensive is broccoli compared to other vegetables at the supermarket?” or “How many different ways can you cook broccoli?” A person may love broccoli, but if she thinks it’s too expensive compared to other alternatives, she’s less likely to buy it. Some additional guidelines that can increase the honesty and accuracy of consumer responses to research questions have to do with when and where the questioning occurs: ✓ Ask questions as close as possible to when and where people are actually engaged in the behavior you’re interested in. For example, ask your broccoli question in the produce aisle at the grocery store. ✓ Ask questions when people are in the right mind-set and context. For example, ask about food preferences when the consumer is in a grocery store. ✓ Ask questions to confirm or clarify what’s observed in behavior. For example, in a grocery store interview, ask, “I notice you have broccoli in your shopping cart. How often do you buy broccoli?” And that’s the last time we talk about broccoli in this book. We promise.

Introducing the Three Workhorses of Market Research For decades, market research has rested on three main data collection methods: consumer interviews, focus groups, and surveys. Each of these methods has undergone numerous changes and improvements over the years, but the basic idea they all share remains the same: If you want to know what people think, you ask them. The differences are in how you ask: ✓ In-depth interviews: Good interviews tend to be relatively unstructured. The skillful interviewer follows the interviewee’s lead, identifying interesting areas to explore and new or unexpected directions in real time. Interviews often go deeper than other techniques. For example, one common technique is called “Five Why’s.” The interviewer doesn’t let a question go until he has asked “Why?” to an answer, and then has asked “Why?” to that answer, and so on for five answers. Sometimes interviewers simultaneously

Chapter 15: Traditional Approaches: Why Not Just Ask People? take notes, but more often the interview is recorded or videotaped and studied in detail later on. ✓ Focus groups: Possibly the most well-known and maligned research technique, focus groups bring together a small number of consumers (usually six to ten) to discuss a marketing issue, concept, or idea, managed by a moderator. The exercise is usually performed in front of a large one-way mirror, behind which marketers observe the proceedings. The usefulness of focus groups is very dependent on the skills of the moderator, who must balance complex group dynamics to get a good reading of the views of the group as a whole. ✓ Consumer surveys: The most scientific of the three workhorses, surveys consist of structured questionnaires that are administered to a representative sample of consumers, with statistical analyses exploring key issues. Surveys used to be conducted door-to-door, then by telephone, but today they’re conducted overwhelmingly online (although telephone surveys still play a large role, especially when responses need to be turned around quickly). Until the rise of neuromarketing, these three approaches were the primary means by which consumer responses to products and marketing were collected. They still make up about 90 percent of the research that’s performed in the market research industry today. In this section, we look at each of these methods in turn and describe how and when they’re most useful in today’s mix of available methodologies. We show that, in certain circumstances and for certain purposes, they continue to have an important role to play.

Conducting in-depth interviews As the name suggests, in-depth interviews try to get below the surface of rationalizations, attempting to explore the drivers behind consumers’ attitudes, opinions, decisions, and actions. Assuming the interviewer is skilled and experienced in this type of interviewing and that the respondents (interviewees) are at least roughly representative of a target group of interest, we can see several uses for this approach, but also some risks and limitations.

When in-depth interviews make sense In-depth interviews offer the luxury of studying a relatively small number of consumers at length, providing an intimacy of findings and insights that standardized interviews and surveys can’t match. However, this depth is gained at a cost. The sample size is usually quite small, and the lack of standardization across interviews makes it difficult to generalize with any statistical precision from the results. But often the insights obtained provide useful inputs into later marketing and product development initiatives, so these drawbacks aren’t seen as a serious hindrance.

241

242

Part IV: Measuring Consumer Response with Neuromarketing In-depth interviews aren’t recommended for testing existing hypotheses, but they’re great for early-stage studies — for generating hypotheses and discovering and exploring new ideas. They provide an excellent way for marketers and product developers to learn from their consumers, enabling a rich exchange of ideas between companies and a subset of their customers. Sometimes in-depth interviews are accompanied by metaphor elicitation techniques that probe for deeper connections and motivations, such as having consumers recount childhood experiences or asking them to assemble a collage of images representing how they feel about a product or brand. These methods are believed to uncover the deeper motivations that drive consumer attachments to brands and products, making them complementary to neuromarketing methods that test for nonconscious goals and motivations in consumer choice and behavior.

Risks and limitations of in-depth interviews In-depth interviews are time consuming and expensive. The quality of the findings depends heavily on the expertise of the interviewer. After the interviews are completed, a significant amount of time is often required to analyze and interpret the results, so this approach isn’t suited to getting quick feedback from the market. The biggest potential risk of in-depth interviews is that findings that have been discovered through interviews may be misidentified as findings that have been confirmed. Unfortunately, marketing professionals are just as susceptible to judgment biases as consumers are. It doesn’t take long for a newly discovered insight to begin to appear inevitable, thanks to the distorting effects of hindsight and accessibility biases. But in-depth interviews actually have relatively poor test-retest reliability, which is a fancy way of saying that if you interview a different group of people, you’ll probably come up with a different set of results (which will in retrospect also begin to appear inevitable). So, falling in love with your insight is a temptation to be resisted.

Use interviews to generate hypotheses, but use surveys or neuromarketing techniques to test the generalizability of those hypotheses.

Seeking the wisdom of focus groups Focus groups typically bring together six to ten consumers, representing a particular target group, to discuss a particular issue or to comment on some concepts, ideas, or items. It’s a free-flowing discussion, managed by a moderator, who explains the rules, tries to keep dominant group members under control, encourages shy participants to contribute, and gets the discussion back on track when it deviates from the topic.

Chapter 15: Traditional Approaches: Why Not Just Ask People? For years, commissioning focus groups was the standard first response by many marketers wanting to acquire consumer input about a marketing challenge, or simply wanting to confirm that they were on the right track. More recently, some large companies have begun to sour on focus groups, even going so far as to ban them from their research methodologies because focus groups are so poor at predicting actual marketplace behavior. In retrospect, this result shouldn’t have been surprising. Focus groups, like in-depth interviews, are a qualitative methodology — that is, they capture how a particular group of people are reacting and evaluating right now, but they consist of too small a sample to generalize with confidence to the attitudes or behaviors of a larger population (such as all consumers who may buy a product). So, like in-depth interviews, focus groups are good for identifying hypotheses and issues that need to be verified, but they aren’t good for testing hypotheses.

When focus groups make sense Focus groups can be a useful research methodology when marketers want to find out whether consumers understand their message and interpret it as intended. You can’t generalize from a few focus groups to the total market, but focus groups can provide a kind of early warning system that may indicate when a message or product is missing its mark. Focus groups are also a good idea when the people being brought together share a decision-making process or product-related experience. For example, to understand holiday shopping, it makes sense to conduct a group discussion involving all members of a family. When friends typically go shopping for clothes together, it makes sense to invite friends to a group discussion, and so forth. The resulting discussions are likely to be more natural because the group composition reflects a real-world situation. For marketers, the main value of a focus group is that it allows them to see their consumers close-up. They can observe and pick up subtle cues and clues that may only emerge in face-to-face interactions. It’s often the case that the best information marketers can glean from a focus group is not from what people say, but from what they do — small gestures, facial expressions, reactions to the statements of others, and so on. These interpretations are often intuitive in nature. Experienced researchers can draw intuitive insights from how participants talk, how they express themselves in body language, how they change their tone of voice, whom they interact with, and so on. Such insights are not strictly logical and testable in a scientific sense, but they can, nevertheless, be extremely useful. Reading the memoirs of marketing legends, it’s surprising how many of their most successful insights appear to be extracted from such intuitive observations.

243

244

Part IV: Measuring Consumer Response with Neuromarketing

Don’t trust these observations and insights too much. They’re subject to the same biases and misattributions as any other human observation. Don’t allow them to begin to appear inevitable and necessarily true. At best, they’re hypotheses that need to be subjected to more rigorous, scientific testing before being used to inform or change decision making.

Risks and limitations of focus groups Because focus groups deal with a group of consumers, many unique challenges come from the resulting group dynamics. People act differently in groups than they do in one-on-one situations. Challenges of group dynamics include ✓ Dominance: The so-called alpha participant problem, in which one participant (or sometimes a pair of participants) dominates the discussion and overpowers the opinions of others in the group. ✓ Groupthink: A psychological tendency for groups to agree with each other and coalesce prematurely into a consensus. ✓ Motivated participation: Participants may feel pressure to contribute something even when they actually have no opinion. (This can be exacerbated by a feeling of obligation to participate because they were paid to do so.) ✓ False leads: When consumers are asked to spend 90 minutes discussing something they would normally give little thought to, they’re likely to come up with a wide range of semi-random comments that marketers may take much more seriously than they should. Although focus groups are good for seeing how a message or product idea comes across to a group of consumers, they shouldn’t be used for trying to determine what a message should be. The dynamics of focus groups tend to encourage conformity and inhibit creativity. Groups tend to value the known over the unknown and the familiar over the unfamiliar. When it comes to developing a strategic marketing message, focus groups are unlikely to make a creative contribution.

Sampling opinions in consumer surveys Consumer surveys are the most used methods in market research. Especially since the introduction of online surveys and consumer panels devoted to every conceivable research topic, they’ve become a cheap and extremely fast-turnaround tool for probing the opinions and behaviors of consumers around the world. But they don’t come without some costs and risks.

Chapter 15: Traditional Approaches: Why Not Just Ask People? When consumer surveys make sense It makes sense to use surveys to ask people questions they can answer, such as what they normally do or have done, especially if referring to the recent past. It’s more problematic to ask people about their beliefs and feelings, because the true sources of their preferences and attitudes may be largely unknown to them because they reside in their nonconscious minds. It’s also risky to ask people about what they’ll do in the future, because people’s guesses about the future are subject to numerous uncertainties and biases that are unlikely to yield accurate predictions. Researchers easily can be misled by answers to questions like these, because people sincerely believe they’re answering truthfully and accurately. But they are, in fact, providing rationalizations and guesses that can lead researchers astray. Certain techniques help to limit such rationalizations, such as asking people to make rapid, simple binary choices rather than formulate and express considered opinions. This approach minimizes one of the main sources of distortion in survey responses: the fact that people are being asked to use System 2 deliberative processing to tell a plausible story about choices and actions that they often perform using System 1 automatic processes. (See Chapter 8 for more on System 1 and System 2.) Theory of Planned Behavior techniques (see “Understanding Why Asking Questions Is Risky Business,” earlier in this chapter) also provide useful guidance for formulating survey questions that minimize self-presentation biases and improve the predictive accuracy of results. Building questionnaires around the three Theory of Planned Behavior guidelines — asking about behaviors, asking about behaviors of peer groups, and asking about situational controls that influence behaviors — can improve both the usefulness and predictive accuracy of consumer survey results.

Risks and limitations of consumer surveys The primary limitation of surveys is that they assume that people can accurately report on their attitudes, beliefs, and feelings; describe their preferences; remember what and why they did something in the past; and predict what they’ll do in the future. Despite the finding of brain science and the warnings of neuromarketers that we describe in some detail, we suspect that these questions will continue to be asked in consumer surveys. As most market researchers would acknowledge, it’s better to know something that may be wrong, and treat it with appropriate caution, than to know nothing at all. Some additional methodological issues can impact the validity and generalizability of survey results. We mention them here only in summary because they’re beyond the scope of this book, but some of them pop up again in our

245

246

Part IV: Measuring Consumer Response with Neuromarketing discussions of methodological issues relevant to neuromarketing studies in later chapters. ✓ Designing the questionnaire: The biggest pitfall is assuming you know all the questions that need to be asked. All too often, surveys are limited to the questions that marketers believe are important, potentially missing more important questions that may be on the minds of consumers. Conducting in-depth interviews before formulating survey questions is a good way to avoid this pitfall. ✓ Selecting the sample: The biggest challenge here is ensuring that the sample is representative of the target population of interest. This is especially tricky with online surveys, which draw from online panels of consumers that are nonrepresentative in various ways, known and unknown. A common mistake is to assume that this problem can be solved with larger sample sizes. A large biased sample is just as damaging to statistical inference as a small biased sample. ✓ Analyzing the results: It’s important not to confuse statistical significance with substantive significance. Especially with online surveys, huge samples can be generated relatively inexpensively. Such samples will produce some highly significant associations because many statistics (such as the often-used correlation coefficient) are sensitive to sample size. Also, surveys should be analyzed using sophisticated multivariate statistics, not simple two-variable correlations, because most relationships of interest involve several variables, not just two.

Other Ways to Ask Consumers Questions In this section, we outline three variations on the core methodologies outlined in the preceding section. These three variations are widely used in market research today.

Test marketing using experimental designs and targeted samples Experimental designs are typically used to test variations in marketing offers. Most commonly, they’re used to fine-tune direct marketing or online offers. Because it’s inexpensive to test variations in offers or pricing with relatively small random samples, it’s possible to identify an optimal combination before rolling out the offer to a full market. Experimental designs are also useful for testing new products in test markets before a broader rollout. Online forced-choice testing can be used to refine offers with very large-scale samples in a very short amount of time.

Chapter 15: Traditional Approaches: Why Not Just Ask People? A risk in test marketing is that it can alert competitors to the imminent launch and the form it will take. Also, test marketing can be expensive and can take a long time to gain conclusive results. However, properly conducted test-market experimental designs are highly reliable because they’re based on real-world consumer behavior.

Consumer panels Consumer panels consist of volunteer members who allow researchers to keep records of their behavior for a period of time. For example, participants in a media panel may be asked to record whenever they listen to the radio or watch television, while participants in a grocery shopping panel may be asked to record all their grocery purchases. Today, much of this data collection can be done automatically and much more accurately, with set-top boxes for media usage and cash register and point-of-sale purchase card data for shopping. Panels provide a rich source of information for understanding how advertising and marketing impact shopping decisions for real consumers. The main challenge with panels is that members may become overly aware of the fact that they’re being monitored, which, in turn, may impact what they do. Validation studies have shown that consumers do exhibit some tendency to adjust their behavior when they’re part of a panel. The interesting point is that they typically don’t lie about their behavior, but rather start to behave in a way that mirrors how they want to be seen as behaving.

Observational studies Observational studies, also called anthropological or ethnographic studies, rely on the intuitive power of a skilled observer. Instead of asking consumers questions, observational researchers spend time with consumers in their natural environments and activities — at home, shopping, socializing, snacking, searching for information, and so on. The researcher draws intuitive conclusions from the natural behavior observed and the context within which the behavior unfolds. The key principle of the observational researcher is to observe but not interact. The researcher tries to become the figurative fly on the wall. Observational studies are mostly qualitative in nature and, like in-depth interviews, typically cover only a small sample, so they don’t generate results that can be generalized. But also like in-depth interviews, they provide insights that can be uncovered in no other way. For example, observational studies can be used to find out whether consumers purchase a brand habitually. If the observer sees that most consumers

247

248

Part IV: Measuring Consumer Response with Neuromarketing pick the brand off the supermarket shelf without hesitation and without comparing prices or checking labels, she can reasonably infer that she’s observing habitual buyers in action. Of course, this study won’t explain why or how consumers became habitual buyers, but it will help the brand’s marketers understand the behaviors of an important segment of their market.

Mixing and Matching Traditional and Neuromarketing Approaches Marketers, like all human beings, can be sorely tempted to believe results that seem to confirm what they want to believe. To eliminate this potential bias, marketers need to be willing to scientifically test any insights they derive from qualitative methods like interviews and focus groups. Scientific surveys can sometimes play this role, but even the most statistically rigorous survey result should also be subjected to complementary checks before being translated into marketing and business decisions that can commit millions of dollars to a new product or marketing campaign. We believe that traditional approaches and neuromarketing methodologies largely complement each other. Together, they provide a more complete picture than either set of methodologies can deliver on its own. Traditional approaches should be used for exploration and hypothesis generation (in-depth interviews, focus groups) and for documenting recent behaviors across large samples of consumers (surveys). Consumers’ self-reports of memories, attitudes, feelings, and future plans are important because they represent what people consciously believe to be true, but they should be interpreted by researchers from the perspective of conscious–nonconscious interaction. They only represent the tip of the iceberg of what’s going on in people’s minds. Neuromarketing approaches, on the other hand, are designed to identify and measure those nonconscious workings of the mind. They rely on rigorous experimental methods and statistical inference and may or may not be expressed in conscious statements and behaviors. For the modern market researcher, the interaction of conscious and nonconscious consumer responses should be what matters. What happens below the level of consciousness deeply influences conscious responses, but conscious responses also deeply influence nonconscious processes. Through the mechanism of expectation formation, our conscious beliefs and attitudes shape our subsequent nonconscious impressions and evaluations. So, if researchers want to understand not only what goes on in consumers’ minds, but also how consumers change their minds and behaviors based on experience, they need to understand both conscious and nonconscious consumer responses.

Chapter 16

Neuromarketing Measures: Listening to Signals from the Body and the Brain In This Chapter ▶ Understanding how signals are produced by the human nervous system ▶ Seeing how neuromarketing captures signals from the body ▶ Looking at how neuromarketing captures signals from the brain ▶ Balancing the focus on technologies versus business questions in neuromarketing

I

n this chapter, we take a tour through the human nervous systems to understand how our bodies produce the signals that neuromarketing measures. We look closely at ten signals from the body and the brain. For each, we describe the major technologies used to capture these signals, and then explain how measuring them can help us understand consumer responses, decisions, and actions. The tour covers a lot of territory, because the brain sciences have bequeathed to neuromarketing a treasure-trove of advanced measurement techniques, most of which have been applied and refined through decades in medical and academic research.

Understanding Where Neuromarketing Signals Originate In Chapter 2, we introduce a model to talk about how we use our brains to understand, interpret, and influence the world around us. Our model divides brain operations into four main activities: ✓ Forming impressions ✓ Determining meaning and value

250

Part IV: Measuring Consumer Response with Neuromarketing ✓ Deliberating and analyzing ✓ Speaking and acting In Figure 16-1, we show how these activities fit into the bigger picture of the human nervous system as a whole. The nervous system, with the brain at its center, is the engine of everything we sense and do as human beings.



Figure 16-1: The central and peripheral nervous systems in action.

Illustration by Wiley, Composition Services Graphics

Getting to know your nervous system The main division of labor in the nervous system is between the central nervous system (CNS) and the peripheral nervous system (PNS). The central nervous system consists of the brain and the spinal cord. Two of the activities in our model — determining meaning and value and deliberating and analyzing — occur exclusively in the CNS and are responsible for producing decisions, which also occur exclusively in the CNS. The other two activities in our model — forming impressions and speaking and acting — involve the peripheral nervous system, which consists of our sensory input systems (the nerves that communicate those inputs to the brain) and our motor execution systems (which receive commands from the brain and communicate them to our muscles and glands).

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain As we note around the edges of Figure 16-1, the PNS is responsible for detecting sensor signals and executing physical movements; the CNS is responsible for analyzing inputs and deciding outputs.

Mapping neuromarketing measures to the nervous system Two divisions in the human nervous system are important for understanding the origins and operations of neuromarketing measures. The first is the division between the CNS and the PNS or, more simply, brain versus body. In neuromarketing, brain measures focus on capturing CNS activity inside the brain. Technologies that measure the brain are often called neuroimaging technologies because they involve creating pictures or images of activity within the brain. Body measures capture physical actions (muscle movements) directed by the brain through the PNS. These motor commands are communicated through the second important division in the nervous system depicted in Figure 16-1: the division within the PNS of the somatic nervous system (SNS) and the autonomic nervous system (ANS). The distinction between the SNS and the ANS is important for understanding neuromarketing measures because signals originating through the ANS are relatively slow and mostly automatic. These include body responses like perspiration, heart rate, breathing, and pupil dilation. Signals originating through the SNS are much faster and under at least partial voluntary control. These include responses like facial expressions, eye movements, blinks, and behavioral responses. Brain measures also can be divided into two main categories: blood flow measures, which infer brain activity from localized increases in blood flow necessary to deliver energy (oxygen and glucose) to neurons that are activated, and electrical measures, which directly capture the electrical and magnetic signals produced when neurons are activated. Figure 16-2 shows how the neuromarketing measures covered in this chapter can be categorized in terms of these divisions.

251

252

Part IV: Measuring Consumer Response with Neuromarketing



Figure 16-2: Neuromarketing measures from the body and the brain.

Illustration by Wiley, Composition Services Graphics

Capturing Signals from the Body Although we often think of behavior in terms of overt movements such as walking, smiling, and speaking, the body also responds to internal and external stimulation in more subtle ways — the skin sweats, the heart pumps harder, facial muscles contract microscopically, the eyes take in more light. These less overtly observable physiological measures play an especially important role in measuring nonconscious reactions to marketing materials. They do this because they originate in the close connection between body and mind — our bodies often respond to environmental stimuli before our conscious minds have become aware that a response is taking place. Here are some of the most important ways the body signals its reactions to the world around it: ✓ Facial expressions: Universal, observable facial responses to emotional states (joy, anger, surprise, and so on) ✓ Facial muscle movements: Micro-movements that are not observable by the human eye but accompany nonconscious emotional responses ✓ Eye movements: Gaze patterns, fixations, blinks, startle reflexes, and pupil dilation

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain ✓ Electrodermal activity: Perspiration production as a response to emotional arousal ✓ Heart rate, blood pressure, and respiration: Byproducts of the body preparing for action, associated with attention and emotional responses ✓ Behavioral response times: How fast we respond to simple choice and judgment tasks, which provides clues about personal relevance and nonconscious emotions

Interpreting facial expressions Emotions are central to every aspect of human behavior and communication. Charles Darwin first suggested that some emotions are universal and can be recognized in facial expressions across all cultures. Beginning in the 1970s, American psychologist Paul Ekman found evidence for six universal human emotions, each associated with a distinctive facial expression recognized consistently across cultures: happiness, sadness, anger, fear, disgust, and surprise. More recently, contempt has been identified as a seventh universal emotion. Facial expressions are controlled by the SNS, so they’re partially under voluntary control. They’re generally reliable indicators of emotional states. A sincere smile, for example (as opposed to a “fake” or social smile), is usually associated with a feeling of happiness, although this isn’t always the case (as when an exasperated smile might accompany a feeling of frustration). This points out a limitation of facial expression analysis: Although emotional facial expressions tend to reflect associated internal emotional states, people can also experience internal emotional states without displaying the accompanying facial expression.

Reading facial expressions: The Facial Action Coding System Ekman built on his discovery by co-inventing a system for coding emotional expressions based on muscle movements in the human face. He called his system the Facial Action Coding System (FACS). Using FACS, expert coders can manually code any facial expression in terms of its constituent muscle movement units, called action units (AUs). Coders usually analyze videos of human faces, which can be slowed down to identify fleeting micro-expressions representing emotional changes. Some coders can classify expressions in real time, but that’s rare. Becoming a FACS coder requires extensive training and certification. FACS analysis is highly accurate, but it’s time consuming and depends on the availability and proficiency of trained analysts.

Automating facial expression recognition To overcome some of the limitations of manual facial coding, academic researchers and commercial firms have developed software systems to automate the identification and classification of facial expressions. These systems

253

254

Part IV: Measuring Consumer Response with Neuromarketing aren’t yet as accurate as trained FACS professionals, but they are faster, less expensive, and much more scalable. Systems available today can read facial expressions through ordinary webcams, enabling studies with thousands of participants that can deliver results in a matter of days or even hours. When combined with eye tracking through the webcam, they create highly scalable solutions for testing attention and emotional responses to advertising, entertainment, products, and packages.

Using images of expressions to guide self-reporting A final way that some research firms use facial expressions is substituting images of expressions for verbal depictions of emotional responses to marketing materials. Instead of asking participants to describe an emotional response, participants are shown images of different facial expressions and asked to select the image that best represents the emotions they’re feeling. Researchers have determined that this technique gives a more accurate picture of emotional reactions, especially for cross-cultural studies, because it doesn’t require participants to translate their feelings into words before expressing them.

Sensing facial muscles: Electromyography Facial electromyography (EMG) is a more precise way to measure facial muscle movement than either manual FACS or automated facial expression analysis. It measures the electrical activity generated by facial muscle activation, which can occur below the level of observable facial expressions. Extensive research with EMG has found that certain muscles in the face are extremely responsive to emotional stimuli, such as the corrugator (frown) muscle and the zygomatic (smile) muscle. Facial EMG is the only technology that can identify very fast, invisible activations in these muscles that occur automatically and nonconsciously, prior to deliberate expression formation. Thus, EMG can provide a highly sensitive measure of the automatic natural emotional assessments (see Chapter 2) that human beings apply to every sensory input: visual, auditory, olfactory (smell), tactile (touch), and gustatory (taste). The trade-off for EMG is that this greater precision is purchased at the expense of a more unnatural experience. In order to measure EMG signals, small, wired sensors must be applied to the face directly over the muscles of interest and connected to a nearby signal amplifier and recorder.

Looking at it the right way: Eye tracking Our eyes automatically follow what interests us, threatens us, or attracts us. Various changes in eye movements, including the speed of eye movement,

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain duration of fixations, pattern and frequency of blinks, and patterns of searching behavior, are all relevant to how a person is responding to a stimulus like a picture or an advertisement. These movements can be measured and tracked within millimeters and milliseconds with sophisticated eye-tracking hardware and software.

Eye movements and fixations Eye movement analysis has been widely used in market research since the 1970s. Here are the three major types of eye movements measured in eyetracking studies: ✓ Fixations: Periods when the eyes are relatively stationary because they’re taking in information. The meaning of a fixation may be hard to determine in the absence of other measures. When a person is browsing a web page, for example, fixations may represent greater interest in a particular area, or they may be an indication that an area is complex and difficult to interpret. Longer fixations tend to be associated with uncertainty and processing difficulty, while shorter fixations tend to be associated with greater processing fluency. ✓ Saccades: Rapid eye movements that occur between fixations. They represent periods of visual search during which information acquisition is not taking place. Direction and distance of saccades are indications of shifts in understanding, attention, or goals. Regressive saccades (moving back to a previously viewed area) often represent confusion or a lack of understanding. Long jumps indicate that attention has been drawn from a distance. Sudden shifts in saccade direction may represent a change in the viewer’s goals or an indication that the stimulus isn’t aligning with the viewer’s expectations. ✓ Gaze paths: The summation of fixations and saccades over time. Straight and rapid gaze paths indicate efficient and targeted visual navigation of the stimulus, while longer, more circuitous routes often signify confusion or a lack of direction in the viewing task.

Eye blinks and the startle reflex Eye blinks are much more interesting than they should be. Of course, we blink to moisten our eyeballs, but we blink at a rate much higher than is required for that purpose. Researchers have calculated that we spend about 10 percent of our waking hours blocking our visual input with eye blinks. There must be something important going on if our brains are willing to make such a sacrifice of vigilance — after all, a lot can happen in the blink of an eye. It appears the extra purpose of eye blinking is to release our attentional focus from external stimuli for just a moment, to give us a chance to engage in internal mental processing. And we seem to have some built-in routines for

255

256

Part IV: Measuring Consumer Response with Neuromarketing determining when to do this so we don’t miss anything important happening in the external world. Knowledge of this functionality of eye blinks makes them useful for neuromarketing in a couple ways: ✓ Blinking is suppressed during tasks that require attention, but it’s more active during tasks that demand less attention. So, blink rate (the average number of blinks per minute) and blink duration (how long the blink takes) can be useful indicators of attention allocation over a period of time. ✓ Blink synchronization (the extent to which people blink at the same moment) across an audience of viewers can be used as a moment-tomoment measure of engagement with a video program or narrative. Because each viewer’s brain is independently deciding when to “take a break” with a blink, synchronization of blinking becomes an indicator of when the video is effectively commanding the audience’s attention, and whether it’s effectively communicating its intended narrative transitions. The startle reflex is an involuntary SNS effect that’s easy to measure. While a person is engaged in some task (such as watching a video, viewing an image, or reading a narrative), a short burst of noise is intermittently presented through speakers or headphones. When the unexpected noise is heard, the person automatically responds with the classic components of the startle reflex: eye blinking and eye muscle contraction. The startle reflex is a robust, indirect measure of motivational orientation (approach or avoidance) toward an object of attention. As part of our natural and automatic emotional response to everything we encounter, our brains are constantly adjusting our emotional state in terms of approach-avoidance preparation. Because the startle reflex is a defensive response, its magnitude is affected by the degree to which we’re already in an avoidance-oriented or defensive state. The more negative our emotional state, the larger the startle reflex will be. Conversely, the more positive our emotional state, the smaller the startle reflex will be. This relationship is explained by the principle of priming (see Chapter 5): A negative emotional state, even a very subtle one, makes a defensive response more accessible, so we’re able to produce a “better” startle reflex response than when we aren’t primed for defensiveness.

Pupil dilation Pupillometry is the measurement of pupil size and changes in pupil size. Most eye-tracking systems measure pupil size as a byproduct of monitoring eye movement. Unlike other aspects of eye movement, pupil dilation is controlled by the ANS. Researchers have found that pupils dilate as a response to emotional arousal, attention, and cognitive load (the amount of information a person is thinking about), so pupil diameter changes can be a reliable and sensitive measure of selected emotional and cognitive reactions to stimuli in real time.

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain

Pupil dilation does not respond differentially to emotional valence, so it isn’t a valid measure of liking or disliking. Pupils dilate in response to the emotional intensity of a stimulus, not its emotional direction. Also, because pupil diameter is highly responsive to changes in external brightness, dilation is not a good measure to use with materials that change in brightness over time, like videos. It’s most useful for studying static images, like print ads, whose brightness remains constant while being viewed.

Reading sweaty palms: Electrodermal activity Electrodermal activity (EDA) is the degree to which an electric current can pass through the skin. This is a function of the amount of perspiration on the skin, which is generated by sweat glands as part of the ANS. More perspiration conducts electricity more efficiently than less perspiration. EDA measures, such as galvanic skin response (GSR) or skin conductance response (SCR), typically rely on electrical conductance sensors placed on the palms or fingers of the hand to measure variations in perspiration production. Measuring and analyzing EDA data require expertise and training and should be done by professionals. Because greater skin conductance is an automatic byproduct of activating the fight-or-flight response of the ANS, SCR is an excellent measure of arousal or stimulation. However, like pupil dilation, it’s insensitive to the direction or valence of the arousal response, so it doesn’t measure liking or disliking. Skin conductance responses also occur with a delay following exposure to an arousal-inducing stimulus, usually from three to five seconds. This means that SCR is not a good measure for pinpointing moment-to-moment sources of arousal, but it’s better used as an overall or average measure of arousal over an extended period of time. EDA measures were popular in advertising research in the 1960s, but they failed to produce consistent results. More recently, at least one study has concluded that skin conductance is a better predictor of marketplace performance than self-reports. For the most part, EDA has been used in neuromarketing studies as a validation measure along with other measures, rather than as a stand-alone indicator of marketing or advertising effectiveness.

Taking a deep breath: Heart rate, blood pressure, and respiration Heart rate (the beating speed of the heart) can be an indicator of various physiological reactions, such as attention, arousal, and cognitive or physical

257

258

Part IV: Measuring Consumer Response with Neuromarketing effort. It’s also a good predictor of recall. Heart rate is usually measured in terms of time between beats, and it has been found to slow down in the short term when attention increases (deceleration is associated with an “orienting” response) and to speed up in the long term when experiencing emotional arousal (acceleration is associated with a “defensive” response). Heart rate is unusual among ANS measures in that it’s also a good measure of emotional valence. In multiple studies of advertising, short-term deceleration of heart rate has been found to be associated with both positive and negative emotions, but over longer time periods (three to five seconds), positive stimuli evoke an increase in heart rate while negative stimuli elicit a decrease in heart rate. Blood pressure, blood volume, and pulse are three aspects of vascular activity (blood flow through the arteries and veins) in the human body. Vascular activity is highly responsive to ANS activation, but it can be triggered by a wide range of psychological inputs, including pleasure, arousal, and memory activation. The need to disentangle these different possible sources creates extra demands on experimental design, execution, and analysis that are not required of more targeted measures, like skin conductance. Also, blood pressure results have been found to be very sensitive to placement and size of the blood pressure cuff put around the subject’s arm. Perhaps for these reasons, vascular measures have only rarely shown up in market-research studies and are not viewed as a particularly promising avenue for future research. Respiration measures record how deep and fast a person is breathing. Measurement is captured by applying a strain gauge (like a rubber band) around the chest, or using components of heart-rate measures. Fast and deep breathing is associated with emotional arousal and either positive (joy, excitement) or negative (anger, fear) emotional valence. Rapid, shallow breathing can indicate anxiety or tension, but also concentration. Slow, deep breathing indicates a relaxed state, while slow, shallow breathing has been associated with either depression or calm happiness. Respiration, like skin conductance, is primarily a measure of arousal and doesn’t differentiate between positive and negative emotional valence. Because it’s highly correlated with EDA measures like skin conductance, it’s usually seen as a redundant measure or used to validate other measures.

Racing the clock: Behavioral response times Behavioral response-time measures use response latencies (time delays) as indicators of the strength of mental associations between concepts in long-term memory. Behavioral response times are shown as SNS measures

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain in Figure 16-2 because they involve the voluntary activation of a motor response, usually the pressing of a button. But it isn’t the button pressing itself that’s important; instead, it’s the length of time it takes for the brain to decide which button to press and then send the appropriate button-pressing command to the appropriate finger. So, behavioral response time can be classified as a behavioral measure, as well as a body measure. Response-time testing is based on the psychological principles of priming and accessibility. Two words or images are presented in rapid succession. When the second item appears, a choice or judgment has to be made as rapidly as possible. If the first item successfully primes the second (making it more accessible in memory), the task will be performed more quickly. If the association between the two items in memory is weak, the second item will not be primed, and the task will take longer. By carefully selecting the words or images in each pair of stimuli, response times can be used to measure the strength of associations between the concepts represented by the stimuli. Three main types of behavioral response testing are commonly used in neuromarketing: semantic priming, affective priming, and the Implicit Association Test (IAT). All three are discussed briefly in Chapter 9 as ways to measure brand associations. We cover them in detail in Chapter 17.

Capturing Signals from the Brain The human brain yields two kinds of signals that scientists have exploited in their efforts to get a better look at what’s going on under the hood. The first is blood flow in the brain; the second is electrical activity in the brain. Both have produced robust bodies of research that are directly relevant to neuromarketing, but both have generated some controversies and unanswered questions as well.

Listening to blood flow in the brain Two main measurement technologies are used in neuroscience that derive images of brain activity by measuring blood flow in the brain: functional magnetic resonance imaging (fMRI) and positron emission tomography (PET). Both techniques provide indirect measures of brain activity based on the anatomical principle that mental activity increases demand for oxygen or glucose in regions in the brain that are activated, and that this need is met by increased blood flow to the region.

259

260

Part IV: Measuring Consumer Response with Neuromarketing Functional magnetic resonance imaging fMRI measures a signal called the blood oxygenation level dependent (BOLD) signal. This signal varies by region in the brain because blood delivered to an active brain region requires more oxygen than blood delivered to an inactive region. A key property of oxygenated blood is that it produces a stronger magnetic field than non-oxygenated blood. fMRI uses powerful magnetic fields, created by a massive donut-shaped magnet that surrounds the subject’s head, to measure this magnetic property of blood in the brain. Technically, a magnetic pulse alters the orientation of atoms in the brain, and the fMRI machine then creates an image of the brain’s state, including regions of greater or less activation, by reading the signals given off by these atoms as they return to their normal orientation. fMRI is currently the most popular neuroimaging technique for academic neuroscience research. It’s beginning to be used in consumer research as well, but usage has been relatively limited due to the high cost of fMRI machinery, the high level of technical expertise required to run it, and the short supply of fMRI equipment, which is typically found only in hospitals and university labs. fMRI scanners weigh around 12 tons and cost about $2.5 million (not including installation, training, and maintenance, which can drive up the cost another $1 million). A technical limitation often noted for fMRI is its temporal resolution (the minimum amount of time it takes to produce one observation or scan). Typically, fMRI creates images of the brain that average brain activity over a duration of two to eight seconds. This duration is dependent on the strength of the magnetic field and the design of the experiment (in event-related designs, for example, the effects can be separated as little as one to two seconds). Fundamentally, the temporal resolution of fMRI is limited by the underlying physiological blood flow response, because blood flow to active brain areas occurs with a lag of about six seconds. Although this temporal resolution is much better than what can be achieved with PET, it’s poor when compared to electroencephalography (EEG) or magnetoencephalography (MEG). A more practical limitation of fMRI is that it’s very sensitive to subject movement. If the person in an fMRI scanner moves his or her head as little as 2 millimeters (about a tenth of an inch), the resulting image is blurred into meaninglessness. Motion-detection and motion-correction algorithms can be applied to the image data, but these algorithms work best if there is minimal motion to begin with. Because speaking causes head movement, verbal responses are impossible to do in the scanner. Behavioral responses are essentially restricted to small movements of the fingers. The need to restrict movement is one aspect of a broader issue with fMRI regarding comfort and naturalness. The technique requires that the subject lie flat on his or her back and perfectly still inside a giant magnetic “donut” that emits a loud bang continually as the magnet charges and discharges.

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain Even though the subject’s head is baffled with pillows, and noise-cancellation headphones are often used, the noise cannot be entirely eliminated. This makes studies using auditory stimuli very difficult. Some people find the experience claustrophobic, or at least highly agitating because of the noise and novelty. For consumer and marketing research, which is often focused on identifying subtle variations in emotional response to products, brands, ads, and messages, this can produce a confounding effect that’s difficult to disentangle from responses to the stimuli themselves. From a neuromarketing perspective, the greatest challenge for fMRI as a measurement technology is not the technical or practical limitations of how brain images are created, but the scientific limitations of how brain images are interpreted. Here are three cautions to keep in mind when reading interpretations of brain images. They all relate to an affliction of fMRI interpretation we call locationism (the erroneous belief that locating where an activity occurs in the brain somehow explains it): ✓ The brain is a network, not a collection of “modules.” Because brain imagery uses (often beautiful) colors to highlight regions of activation, there is a tendency to talk about regions as modules “where x happens.” Too often, this metaphorical language gets interpreted literally, and people start talking about supposed “centers” in the brain. Although there are many areas of specialization in the brain, the production of thoughts, feelings, choices, or actions never happens in just one place. It’s always a function of a complex network of interacting regions. ✓ Brain areas activate for different reasons. The interpretation to watch out for here is called reverse inference (discussed in more detail in Chapter 19). It’s over-interpreting a finding that “region A is active when mental task B is occurring” to mean that “region A is active only when mental task B is occurring” and, therefore, that “if region A is active, then mental task B must be occurring.” In fact, very few if any regions in the brain do only one thing. For example, the insular cortex activates when you think about romantic love, and it also activates when you think about your iPhone, but this does not mean you’re in love with your iPhone, because the insular cortex activates as part of many other thoughts as well. ✓ Knowing where something happens in the brain does not tell you why you should care. This is perhaps the most significant interpretation challenge for fMRI studies. When academic fMRI research discovers that a part of the brain “lights up” when looking at images of favorite brands, this may fill in a missing puzzle piece about how the brain operates, but it doesn’t automatically translate into a usable finding for a brand marketer. To pass the “So what?” test, results must be attached to a realworld decision or action. This is starting to happen in a few fMRI studies (see Chapter 22 for some examples), but it’s still rare.

261

262

Part IV: Measuring Consumer Response with Neuromarketing Positron emission tomography PET also uses blood flow as its source for measurement, but it differs from fMRI in that it requires the inhalation of a radioactive gas or the injection of a radioactive solution before brain imaging can be performed. Because of this requirement, PET is classified as an invasive brain-imaging technique. The greater the activity in a brain region, the more the radioactive tracer is present in that region, and the stronger the PET signal at that location of the brain. Apart from an inherent limitation arising from the use of radioactive substances (governmental guidelines limit the total radiation dose per year per volunteer), the main technical limitation of PET technology is that the temporal resolution is relatively poor because it takes time before enough radioactive “ticks” can be counted. As a result, you can typically get only one picture per minute of brain activity and, as a result, PET produces only an averaged brain activity picture over that period. The spatial resolution of PET is quite good — down to 1 cubic centimeter — which is substantially better than EEG or MEG, but not as good as fMRI. Given issues surrounding injecting radioactive isotopes into consumer volunteers, PET is not a technology that’s likely to see much use in neuromarketing. Few research teams outside academic or medical labs are qualified to administer PET scanning, and few volunteers are willing to be injected with radioactive substances to test consumer products.

Plugging into the electrical brain Electrical measures encompass techniques that record brain activity directly, through scalp-surface detection of electrical and magnetic signals emitted by the brain. Electrical signals are the literal mechanism through which the brain communicates and synchronizes activity across different anatomical regions. Electrical measurement techniques provide the most direct measures of cognitive processing. They’re the only measures that record brain activity at the speed of cognition — that is, in milliseconds (thousandths of a second) rather than seconds. A significant limitation of electrical measurement techniques compared to blood flow techniques is their much poorer three-dimensional spatial resolution, which is to say, they cannot localize activity inside the brain with the same precision as fMRI or PET. This is because they measure only signals at the surface of the scalp, where the sensors are located. The basic obstacle is called the inverse problem, which states that it is mathematically impossible to find a unique source location for a given electrical activity pattern measured at the scalp. As a result, EEG and MEG researchers can guess (often

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain with a high level of confidence, based on matching to fMRI results) where a signal is originating in the brain, but they can never be certain. Also, as noted in the section on fMRI in this chapter, signals originate from multiple regions in the brain, which operate together to produce mental activity, further complicating the problem of finding source locations. Another challenge with electrical measurement techniques is that the signals they measure can be contaminated with other electrical signals produced by the body. Muscle movement produces electrical signals in the same frequency ranges as the brain, but the signals are about a hundred times stronger than brain signals. This means the smallest muscle movements, like eye movements or head movements, can overwhelm the brain signals and make them difficult to detect separately. Therefore, researchers who specialize in studying electrical signals from the brain must expend considerable effort on artifact correction (the partially automated and partially manual process of separating brain signals from other signals that can show up in the electrical recording).

Electroencephalography The coherent activity of many thousands of neurons produces electrical potential differences across the scalp, which can be detected using an electrode cap connected to a signal amplifier. The machinery is only moderately expensive and readily available from multiple equipment vendors. EEG is a noninvasive and silent technology that’s directly sensitive to neuronal activity. The time resolution of the EEG is limited only by the hardware, which, typically, can record a voltage every one to three milliseconds. There are four main types of EEG analysis that are regularly used in neuromarketing — brain-wave frequency analysis, hemispheric asymmetry, event-related potentials (ERPs), and steady-state topography (SST). Each emphasizes a different aspect of the EEG signal, and each has its own pros and cons as a measurement technique for answering neuromarketing questions.

Brain-wave frequency analysis The brain-wave signals naturally emitted by the brain have distinctive frequency characteristics. Electrical frequency is measured in cycles per second using the unit hertz (Hz). The most easily detected frequency emitted by the brain is around 10 Hz, or ten cycles per second. Frequencies change in response to different mental states and vary over time and across different parts of the brain, so there is lots of room for interpreting the signals and associating them with different mental processes.

263

264

Part IV: Measuring Consumer Response with Neuromarketing Scientists have been studying brain waves for nearly a century, and a convention has emerged to classify commonly observed frequencies into frequency bands named after Greek letters: ✓ Delta: Less than 4 Hz; the dominant frequency in dreamless sleep ✓ Theta: 4 to 8 Hz; associated with internally focused processing, such as memory activation ✓ Alpha: 8 to 12 Hz; the brain’s “default” frequency, dominant when eyes are closed and the brain is in a relaxed state ✓ Beta: 13 to 30 Hz; associated with alertness and active attention ✓ Gamma: More than 30 Hz; associated with information processing, learning, and emotional processing Two metrics are commonly used to measure brain-wave frequencies. The first is called power, and it measures the degree to which there is a large amount of activity within a particular frequency band over a specified period of time (usually seconds or minutes). The second is called coherence, and it measures the consistency or correlation of brain-wave frequencies across different regions of the brain. Greater coherence between regions often means the regions are communicating as part of a mental process. There is a long tradition in EEG brain-wave analysis in market research, going back to original studies by Herbert Krugman in the 1970s. Early efforts tried to associate responses to marketing stimuli to overall power in different frequency bands, but this was found to be too crude a measure to identify meaningful differences. More recently, sophisticated statistical techniques have been applied to summarize power and coherence patterns over the whole brain, and these approaches have begun to yield interesting predictions of consumer behavior at both individual and market performance levels.

Hemispheric asymmetry An application of EEG frequency analysis that is particularly relevant to neuromarketing is the measurement of frequency band asymmetries (differences) between the left and right frontal regions of the brain. Researchers have found that these asymmetries are associated with approach and avoidance motivation with regard to external objects or situations. When experiencing approach motivation, there is more alpha band power in the right hemisphere compared to the left, and the opposite is true when experiencing avoidance motivation. Neuromarketing researchers have begun to use frontal asymmetry as a measure of approach-avoidance responses to products and brands and subsequent information processing and decision making. In a 2012 study by Niklas Ravaja and colleagues, hemispheric asymmetry was found to predict purchase decisions for different combinations of brand familiarity and price.

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain Event-related potentials A subset of EEG measurement is the analysis of event-related potentials (ERPs). As the name implies, ERPs isolate brain signals that occur directly in response to some event. By averaging together responses to a large number of these exposures to a stimulus (usually a word or static image), the ERP researcher can isolate the sequence of brain-wave components elicited by the stimulus. By comparing ERPs for different stimuli, inferences can be made about different types of nonconscious and conscious responses, such as ✓ Perceived novelty or familiarity ✓ Attention allocation ✓ Surprise (called expectancy violation by ERP researchers) ✓ Emotional arousal and valence ✓ Personal motivational relevance For example, the P300 component is a well-studied positive potential that occurs at about 300 milliseconds after exposure to a stimulus. It’s sensitive to attention shifts and novelty. It can be used to precisely measure attentional shifts that may occur either overtly (accompanied by eye or body movement) or covertly (occurring in the mind only). The N400 component is a very wellestablished measure of meaning mismatch and expectancy violation (surprise). It’s a negative potential that occurs after about 400 milliseconds if two stimuli are incongruent either in their meanings or with the subject’s personal beliefs or knowledge. This ERP component can be used to measure brand associations — for example, brand attributes that fit poorly with a given brand name would yield a larger N400 component in the brain. Another well-known ERP component is the late positive potential (LPP) that occurs after 600 milliseconds and that has been shown to be linked to emotional judgment and valence. ERPs are usually measured in terms of two metrics: Amplitude is a measure of the magnitude of the ERP effect, and latency is a measure of the time lapse before the effect occurs. ERPs have been studied for a long time in research on attention, emotion, memory, language processing, and other areas. They’re especially useful for studying consumers’ nonconscious responses to brands and products.

Steady-state topography SST is a variation on EEG brain-wave analysis that was first described by neuroscientist Richard Silberstein in 1990. Currently, the technique is licensed exclusively by Silberstein’s neuromarketing firm, Neuro Insight (www.neuroinsight.com). SST begins with standard EEG, but it adds one element. While a subject is watching a stimulus (like an ad) and having his or her brain waves recorded with EEG, a dim flicker signal is presented at the edge of the subject’s visual field. This flicker elicits a brain-wave response called a steady-state visual evoked potential (SSVEP), which causes the subject’s brain to generate a matching brain wave at the same frequency. Using this evoked

265

266

Part IV: Measuring Consumer Response with Neuromarketing brain wave as a kind of timing baseline, the method infers properties of the EEG signal by comparing timing differences between the two signals. According to Neuro Insight literature, SST can be used to determine secondby-second changes in a number of consumer responses to marketing materials, including long-term memory activation (both implicit and explicit memory), engagement (sense of personal relevance), approach-avoidance motivation (whether the material attracts or repels the viewer), emotional arousal, and visual attention. A reported limitation of SST is that some people find the flicker distracting and the required visor headset somewhat uncomfortable. A strength of the method, compared to standard EEG, is its superior resistance to interference from body or eye movements and its ability to get robust results from single trial exposures to stimuli, an important advantage when trying to capture responses to novel versus familiar stimuli.

Magnetoencephalography MEG is another electrical technique that is similar to EEG in that it is noninvasive, offers excellent temporal resolution (in the range of milliseconds), and can be used to measure neuronal activity continuously. Like EEG, MEG relies on the coherent activity of many neurons that, in addition to producing electrical signals, also produce magnetic fields that can be detected outside the head. The strength of these fields is extremely small — typically one part in one billion of the Earth’s magnetic field. To date, the only instrument with the sensitivity required to record these fields is the superconducting quantum interference device (SQUID). Compared to EEG, MEG offers superior signal quality and very high time resolution. The main limitations of MEG are its much greater cost and the complexity of its equipment. MEG machines are much more expensive than EEG equipment because they require operations at near absolute-zero temperatures. They use liquid nitrogen to achieve these temperatures, so they require a complex and expensive infrastructure to support each machine. As a result, they’re available to only a handful of academic researchers and have not been adopted by any commercial neuromarketing vendors.

Putting Technologies in Their Proper Place New technologies are an important part of the new world of neuromarketing, but they aren’t the most important part. Neuromarketing vendors do their clients a disservice when they emphasize technology issues over business

Chapter 16: Neuromarketing Measures: Listening to Signals from the Body and the Brain issues in their own marketing and sales communications. For example, fMRI vendors like to say that using EEG is like trying to follow a football game while standing outside the stadium. And EEG vendors like to respond by saying that using fMRI is like taking a picture of the football field after the game is over. In some sense, both statements are correct (and somewhat clever), but they exaggerate the limitations of technologies that have both produced breakthrough findings and insights about the brain and support thousands of active researchers around the world.

Marketers don’t consider these distinctions to be big selling points. They see them as smoke screens. They would much rather have vendors differentiate themselves by showing what marketing questions they can answer — and why those answers are worth paying for. The value in neuromarketing is first and foremost a function of three things:

✓ Asking the right business question: Determining what marketing outcomes you want to measure ✓ Identifying the right consumer responses to measure: Matching the need for knowledge with the right measures and metrics to meet the need ✓ Designing the right kind of test to answer that question: Creating an appropriate experimental or field study design that makes the right comparisons, uses the right controls, collects the right data, and applies the right statistical tests to answer your question with a level of confidence you can use to make the best possible business decisions based on what you’ve learned Measuring the brain simply to measure the brain is not enough to justify the adoption of new neuromarketing research approaches. The “gee whiz” element in brain research techniques dissipated long ago. “What your brain is doing” while watching an ad or experiencing a product is meaningless without a connection to either a decision or a behavior, or preferably both. Technologies are means to an end. The new model of the intuitive consumer introduced in Chapter 2 gives us lots of new questions to ask. Neuromarketing gives us lots of new technologies to answer those questions. Only by bringing the questions and the technologies together to provide answers that have an impact in the marketplace will neuromarketing justify its place in the toolkit of market-research methodologies. If you use neuromarketing insights or principles to ask the right questions and design the right test, you can sometimes find your answer without needing to apply the more advanced (and expensive!) technologies described in this chapter. Sometimes you can just observe consumer behavior or use less

267

268

Part IV: Measuring Consumer Response with Neuromarketing elaborate testing to make a reasonable determination of what’s going on in your consumers’ brains, why they’re acting the way they are, and what implications this has for your marketing, advertising, product design, store layout, and so on. We cover these additional techniques in the next chapter.

Chapter 17

Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers In This Chapter ▶ Setting up and running behavioral response-time studies ▶ Using online services and “gamification” to test marketing materials inexpensively ▶ Conducting do-it-yourself behavioral experiments ▶ Deciding how to trade off the costs and benefits of different types of neuromarketing

studies

N

ot all neuromarketing studies require high-end machinery and a team of PhDs to coax insights out of your customers’ brains. In this chapter, we look at some less-expensive options that you can implement yourself, commission from an online partner, or carry out with the assistance of a neuromarketing consultant. We begin with a discussion of behavioral response-time studies, a simple technique that is easy to prepare, is easy to score and interpret, and yields reliable results about nonconscious associations with brands and products. Next, we consider some new online tools that take techniques previously confined to the lab, or previously impractical, and make them available as convenient services on the Internet, including online eye tracking, facialexpression analysis, and prediction markets. Then we look at some inexpensive ways you can carry out behavioral experiments, both in stores and online. Using behavioral economics principles, simple experiments can identify new opportunities and predict the impact of sales and product choice strategies. Finally, we look at the general problem of balancing costs and benefits when comparing different neuromarketing approaches, and suggest some guidelines for making the right choice when comparing more- and less-expensive options.

270

Part IV: Measuring Consumer Response with Neuromarketing

Running Response-Time Studies Behavioral response-time studies require no sensors, specialized labs, or complex data analysis algorithms. Yet they can reveal quite a bit about how knowledge and concepts are tied together in consumers’ minds.

Seeing the logic of response-time studies Response-time studies are based on properties of the mental mechanism we discuss at length in this book — priming. Everything we experience, including our internal thoughts and what occurs in the external world around us, is processed by our brains as a predictor. As part of interpreting every input, the brain asks, “What’s next?” Through a process called associative activation, related thoughts and concepts are made more accessible, so they can be brought into conscious thought more quickly if required. Response-time studies take advantage of this property of priming. Things that are associated in memory with something we’re experiencing become more accessible, so measuring the amount of time it takes to access them is an indicator of how associated they are. If two items (images or words) are shown in succession, and a person is given some behavioral task to perform with regard to the second item (like pressing a button), he or she will perform that task more rapidly and more accurately the more connected those two items are in his or her mind. The first item is called the prime, and the second item is called the target. Three types of response-time studies can provide valuable insights for marketers: ✓ Semantic-priming studies: In semantic priming, if the meaning of the target is associated with the meaning of the prime, the target can be processed faster and more accurately. For example, if you associate the brand Apple with creativity more than reliability, after seeing the prime Apple, you’ll be able to process the target word creative faster than the target word reliable. (Generally, the words are separated by less than half a second, and the average differences in response times are on the order of 50 to 150 milliseconds.) ✓ Affective-priming studies: In affective priming, if the emotional valence (positive or negative) of the target is in the same direction as the prime, the target can be processed faster and more accurately. For example, if you have positive feelings about the brand Apple, after seeing the prime Apple, you’ll be able to classify the word sunshine as a positive word faster than you’ll be able to classify the word terror as a negative word.

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers ✓ Implicit Association Test (IAT): This test uses affective priming in a more complicated way. Instead of classifying individual targets after seeing individual primes, the task is to classify them together. For example, to test implicit associations with Coke and Pepsi, a part of the test (there are several parts) would have you classify targets that are either images associated with Coke or Pepsi or positive or negative words, into two categories, Coke-or-positive or Pepsi-or-negative. If you have stronger positive associations with Coke, you’ll be able to assign both Coke images and positive words faster to the Coke-or-positive category. (There is more to the IAT than this; we recommend checking out http://implicit.harvard.edu/implicit to get a fuller explanation and try an IAT yourself.) All these tests are designed to measure implicit or automatic associations, not conscious, considered choices. So, they’re particularly useful when you suspect that direct questioning may be vulnerable to response biases that would distort results. In Chapters 5 and 7, we discuss the distinction between associative priming and motivational priming. Associative priming activates associations, while motivational priming also activates conscious or nonconscious goals, which then can result in goal-pursuit behavior, as described in Chapter 7. When semantic priming and affective priming are used in response-time studies, we’re leveraging their associative-priming properties. Although marketers are generally more interested in triggering motivational priming in real-world marketing situations, the response-time effects of associative priming are what’s being used in these techniques.

Measuring implicit brand attitudes with response-time studies The IAT has been used extensively to study implicit brand attitudes and has been found to produce similar results to explicit attitude tests for noncontroversial topics. But more important, for attitudes that people may be reluctant to reveal in interviews or surveys, such as opinions about brands that are associated with temptation, impulsiveness, or indulgence, the IAT can give more accurate readings. The IAT is particularly useful for comparing pairs of brands that are natural counterparts or alternatives, because it measures the strength of attitudes in relative, not absolute, terms. There are also versions of the IAT that can measure responses to single brands if a natural counterpart is not available.

271

272

Part IV: Measuring Consumer Response with Neuromarketing Here are some examples of IAT brand and consumer behavior studies that yielded interesting results: ✓ An IAT study of preferences and consumption of low and high-calorie foods found that explicit and implicit attitudes matched only for lowcalorie foods. For high-calorie foods, implicit attitudes were much more positive and also were better predictors of actual food consumption. ✓ An IAT study of attitudes toward a popular clothing retailer found that implicit attitudes didn’t match explicit attitudes, but it did a better job of predicting shopping intentions than explicit responses. ✓ In a study of celebrity voices in advertising, researchers found that when participants explicitly rated ads narrated by celebrities they liked, they discounted the impact of the celebrity, but when measured with an IAT, their implicit attitudes toward the ads were significantly influenced by their attitudes toward the celebrities. ✓ In a comparison of Mac and PC computer users, IAT results were consistent with survey results measuring explicit attitudes, usage, and ownership, but the IAT results showed much greater response-time differences for Mac users, implying a significantly stronger association with the Mac brand, a finding that was not revealed by explicit measures. Setting up and deploying an IAT is relatively simple if you use an online partner and template to get started. For example, a company called Millisecond Software (www.millisecond.com) has a web-based tool called Inquisit that can be used to create IATs and many other types of response-time tests and run them with online participants on the Internet. The company provides scripts that you can download and customize with your brand-specific information. It also provides instructions for how to analyze the output data in a spreadsheet program to generate results. Our purpose in writing this book is to provide a general reference and not to compare neuromarketing vendors, so for the most part we avoid mentioning vendors or providing information about how to reach them. In this chapter, we make a bit of an exception to this rule because we want to show you examples of some of the solutions we’re describing and give you a starting point for further exploration on your own. So, where appropriate, we mention example vendors with regard to a particular approach. This is for illustrative purposes only and doesn’t mean we endorse any vendors mentioned or that there aren’t other qualified vendors out there who may provide similar services.

Measuring semantic and emotional connections with response-time studies Semantic-priming studies use response times to measure the strength of associations between words, concepts, and imagery. Setting up a

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers semantic-priming study is even simpler than setting up an IAT. The most basic design displays a series of paired words or images (a prime and a target) with a short pause between each pair. The participant is given a distractor behavioral task to produce responses. A common task is to press one button if the target word is a real word (like table or quilt) or a different button if it is a pseudo-word (like toble or quelt). This forces the subject to read every word before making a choice, giving you an unbiased response time for the pairs of words you’re really interested in. A semantic-priming study usually has about 100 to 200 pairs of words, with about 25 percent pseudo-word targets to keep the participant engaged. For the rest of the pairs, you provide words or images that represent the connections you’re interested in testing. For example, if you want to test associations between five competing products and five product attributes, you can create a script in which each product and attribute is paired multiple times (as a general rule, plan for five repetitions of each pair to smooth out response variations), add in the pseudo-word pairs, randomize the order, and load the stimuli into a script using a tool like Inquisit (see the preceding section) or another response-time program. Two key elements for getting a meaningful semantic-priming response are the length of time each word appears on the screen and the length of the pause between the prime and the target. For exposure, 200 to 500 milliseconds (two-tenths to five-tenths of a second) is common. For the intervening pause, between 100 to 200 milliseconds is about right; associated activations are strongest in this time frame, after which they quickly decay. Semantic-priming studies have been used to test implicit associations with different types of products. For example, one study looked at how different global concepts were associated with the words Coke and water in consumers’ minds. Researchers found the words nature and mystery to have the largest response-time differences when primed by Coke, with nature more connected to Coke for men and mystery more connected to Coke for women. The ability to probe implicit semantic connections can help marketers in two ways: to discover new connections with their products and brands that they may not have known existed, and to monitor how well connections they’re trying to communicate are getting established and reinforced in consumers’ minds. In affective priming, the automatic emotional response to the prime is inferred from the speed with which the target word is classified as emotionally positive or negative. The target words are selected to have unambiguous positive or negative meanings (for example, words like glorious, smile, grief, or curse), so the task is easy. The real purpose of the task is to see how long this easy classification decision takes, given the prime that preceded it. If the prime activates positive emotional connections, positive target words will be classified faster than negative target words, and vice versa if the prime activates negative emotional connections.

273

274

Part IV: Measuring Consumer Response with Neuromarketing Affective-priming studies are set up very similarly to semantic-priming studies. Pairs of words are created, presentation is randomized, exposure times and prime-to-target intervals are set (100-millisecond intervals are best for emotional priming), and between 100 and 200 trials are presented. For affective priming, you have a smaller number of primes, and you want to be sure each of these is presented at least ten times with both positive and negative target words. It’s often a good idea to include neutral primes among the primes of interest to avoid monotony effects from repeating primes and create a control condition. In published academic studies, affective priming has been used mostly to study implicit attitudes in the political realm, including attitudes toward candidates, issues, and groups. This work has been adapted by specialist market-research firms (for example, Sentient Decision Science [www. sentientdecisionscience.com]) for studying marketing stimuli, including brands, advertising, and products. Both semantic priming and affective priming are proven and easy-to-implement methods for measuring implicit associations with brands and products. Most researchers agree that emotional connections are more important to monitor closely, because they’re more powerful predictors of attitudes, choices, and behaviors. A cost-effective approach is to use affective priming to test whether you’re connecting to the right emotions, and then use semantic priming to test whether you’re communicating that connection effectively.

Leveraging Online Services to Tap Into the Wisdom of Crowds Over the last decade, more and more research services have begun to migrate to the Internet. The first step was the establishment of online panels of consumers ready and willing to answer survey questions on just about any topic. Today, thousands of panels are available to researchers, promising to deliver results from the most specialized micro-interest groups to the most general population panels representing diverse regional, national, and global populations. Recently, new research services have begun to appear on the Internet and on mobile devices that offer innovative measurement solutions derived from biometric and response-time methodologies, as well as crowdsourcing solutions that bypass the biases of individual opinion surveys by asking participants to predict marketplace outcomes rather than their own future behaviors. These services provide very cost-effective research alternatives, compared to custom neuromarketing projects using dedicated labs and methodologies, and they’re worth considering by anyone looking to try out neuromarketing on a budget.

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers

Activating the webcam: Online eye tracking and facial expression analysis As high-resolution webcams became standard features on almost all personal computers and mobile devices, enterprising technology entrepreneurs realized these video cameras could be used to capture eye tracking and facial expressions for research purposes. Although these systems don’t provide the precision and advanced features of lab-based hardware and software, they represent a growing segment of the neuromarketing field and can be a good choice if your needs match their current capabilities. Online eye tracking has been available since 2010. Services are very easy to use. Here’s an example process from one online company, EyeTrackShop (www.eyetrackshop.com):

1. You submit the materials you want to study to the vendor, typically static images or web pages.



2. The vendor builds a mock-up for the test, which you approve.



3. The test is deployed to respondents matching your recruiting criteria.



4. Respondents receive an e-mail announcing the test, go to a website, and provide permission to use their webcam.



5. Conditions like lighting and head position are checked, gaze patterns are calibrated, and if everything is working properly, respondents begin the test.



6. Respondents’ gaze patterns are tracked while viewing the stimuli. A traditional survey questionnaire may be added at the end of the test.



7. The vendor analyzes the data and returns a report to you with graphics and statistics, including heat maps, area-of-interest fixation times, gaze path, and comparisons with questionnaire answers. Webcam-based eye tracking has some compelling advantages. Turnaround times are fast, averaging about five to seven business days for a typical study, with some vendors offering 48-hour turnaround for expedited studies. Costs are low, estimated to be about one-third the cost of an equivalent labbased study, according to one vendor. And perhaps the biggest advantage is that studies can be run anywhere in the world where a panel participant can be found with a computer, a webcam, and an Internet connection. This allows marketers to reach audiences that would be impractical or impossible to test in any other way. There are some limitations to online eye tracking as well. The spatial resolution of webcam-based eye-tracking software is about half the resolution of dedicated eye-tracking equipment, and the data collection rate is slower

275

276

Part IV: Measuring Consumer Response with Neuromarketing because it’s dependent on connection speeds and the processing power of the computer being used, so fast saccades (eye movements) cannot be captured with this approach. Also, online solutions tend to be better for static images than videos. All these limitations are rapidly evolving as computers and video cameras get more powerful and Internet connections get faster. The value proposition for online facial expression analysis (also called facial coding or facial imaging) is quite similar. Vendors are easy to work with, and material can be submitted, prepared for study, deployed, and tested in short turnaround times. Results typically include scores for a variety of discrete emotions. Online facial-coding vendors like nViso (www.nviso.ch) and Realeyes (www.realeyesit.com), for example, provide moment-to-moment scores for discrete emotional states that more or less match emotion expert Paul Ekman’s seven basic emotions (introduced in Chapter 16): happiness, surprise, sadness, fear, anger, disgust, and contempt, plus a placeholder for neutral states. Studies are inexpensive and can be fielded to large samples of participants in diverse locations, with results available in days rather than weeks. As with online eye tracking, there are limitations with online facial expression analysis compared to expert facial-coding approaches. According to Paul Ekman, automated facial coding inevitably takes shortcuts compared to his Facial Action Coding System (FACS) taxonomy of facial expressions and is currently able to achieve about 70 percent accuracy in identifying emotions, as compared to over 90 percent accuracy for a trained FACS analyst. Another limitation, noted in Chapter 16, is that facial expression analysis can’t measure muscle movements that occur below the threshold of visual observation. To measure at that level requires applying sensors on the face, which takes the methodology out of the realm of web-based passive techniques. What is still missing from webcam research solutions is the integration of these two capabilities — eye tracking and facial expression analysis combined in a single web-based application. Although a fully integrated solution has not yet appeared (as of mid-2013), vendors from both camps are well aware of the added value of such a solution, and development efforts are rumored to be underway. Meanwhile, vendors are working together to provide interim solutions. EyeTrackShop, for example, offers integration through partnerships with two facial-coding vendors, allowing its clients to choose which they want to use, if they have a preference.

Using “gamification” in online research Gamification is not a specific type of study, like eye tracking or response-time studies; instead, it’s a way of presenting studies. Gamification emerged in online survey research as a solution to the problem of making surveys more

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers engaging and fun. By applying some of the features of games to the data collection process, gamification has been used to increase response rates, completion rates, engagement, and accuracy for online surveys. Gamification features now common in online surveys include the following: ✓ Framing data collection tasks as challenges ✓ Creating win conditions and offering rewards ✓ Displaying competitive rankings on leaderboards ✓ Awarding badges as symbols of accomplishment and reputation ✓ Displaying status and progress on social networks There is a vigorous debate in the online research world as to whether the increased engagement of “gamified” surveys creates biased responses that render survey results non-generalizable. There are good arguments on both sides of this debate, but they all revolve around the question of how gamification features impact conscious responses, which are more susceptible to response biases, compared to nonconscious responses, which are less likely to be biased by the gamification features. For studies that measure nonconscious responses directly or try to suppress conscious correction of nonconscious responses, gamification is a natural way to maintain interest and consistency while disguising the true purpose of the study. Engagement becomes not a bias, but a planned distractor that improves the reliability and validity of the test. Here are some examples of gamification applied to the measurement of nonconscious responses in online testing: ✓ Behavioral response-time studies: Creative contexts for response-time measurement include “shooting gallery” and “target practice” games in which the prime and target stimuli appear as elements in the game and targets are chosen with the keyboard or mouse. A variation is the “visual search” task, where participants have to pick out a target image in a grid of distractor images. Response times are direct measures of the degree to which the target attracts bottom-up automatic attention. ✓ Forced-choice studies: Adding time limits or distractions to forcedchoice tests has been found to be a good way to suppress conscious deliberation. Studies conducted by research firm BrainJuicer (www. brainjuicer.com), for example, have found that adding time limits and distractor tasks to a package-preference choice task resulted in significantly higher selection rates for simpler, less demanding designs. ✓ Recognition studies: An innovative way to measure features like processing fluency or familiarity is a recognition task in which the object is slowly transitioned from completely blurry to sharp focus, with the

277

278

Part IV: Measuring Consumer Response with Neuromarketing participant picking the transition point at which the object becomes recognizable. This type of test can also be used to measure the visual salience of images and designs, as discussed in Chapter 13. ✓ Memory retention studies: An online version of the classic card game Concentration, in which a player flips over pairs of tiles to reveal objects whose location the player must remember, can be used to measure variations in memory retention for different products or brands. Although nonconscious response tests aren’t yet offered as a built-in capability by online survey companies, we believe they soon will be. As an interim solution, it’s possible to build a test using application development software and then access the test via an exit or hyperlink from a traditional online survey. A key requirement for response-time games is to ensure accurate timing measurement when capturing responses. Many PC clocks are unreliable at millisecond response times, so specialty software like Inquisit (see the “Measuring implicit brand attitudes with response-time studies” section, earlier in this chapter) may be needed to compensate for this deficiency.

“Crowdsourcing” with prediction markets Crowdsourcing is a recently coined term that refers to the collecting and aggregating of views from a large number of people (the crowd) to choose a preferred course of action. One of the most relevant examples of crowdsourcing for research is prediction markets (online marketplaces for making predictions based on consumers’ beliefs about possible future outcomes). Consumers don’t record their own opinions, as they would in a traditional survey; instead, they use the (virtual) buying and selling of options or shares as a way to express what they think other people believe will happen in the future. The method takes advantage of a property of human judgment that we discuss in Chapter 15: the fact that people are more accurate when they predict what others will do than when they predict what they themselves will do. Prediction markets operate on the same principle as a stock market. Say a company wants to test three new product concepts. Consumers are invited to “buy” shares in the concept they expect to win (however the market defines winning). After each round of buying and selling, the “price” of each share is a measure of how all the participants in the market have invested in the available options. Each participant can then revise his or her investments in light of these rising and falling prices. Eventually, a concept emerges as the preferred one, attracting more investment than others. This approach has shown superior results in a number of experiments in which one group of consumers participates in an online prediction market and another group responds to a traditional survey asking for personal

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers opinions. Researchers believe the greater accuracy of prediction markets is a function of the feedback provided by the buying and selling behavior of others, which translates into additional information that participants use to adjust and focus their own investments. As the market as a whole coalesces on a preferred choice, it often shows an uncanny ability to predict the actual result that later appears in the real marketplace. Prediction markets can be easily set up using online providers like Inkling (www.inklingmarkets.com), a service that enables creating and managing both public and private online markets for various purposes. A research provider that has done interesting work in product concept testing is BrainJuicer (www.brainjuicer.com).

Conducting Do-It-Yourself Behavioral Experiments Sometimes the best way to test a neuromarketing hypothesis is to conduct a simple behavioral experiment. Because behavior is the ultimate outcome of activity in the brain, behavioral experiments can provide direct evidence of how impressions, evaluations, goals, and decisions that occur in the brain translate into actual behaviors in the world.

Of the many kinds of experiments described in this book, those derived from behavioral economics are the easiest to design and implement, because they focus on the influence of situational factors, which are easy to set up and control, and measure as outcomes consumer behaviors (usually choices or purchases), which are easy to observe, count, and compare.

Setting up and running behavioral experiments There are two contexts in which simple behavioral experiments make sense: in a retail store and online. In-store experiments are conducted by retailers and product marketers all the time — for example, every time they move products around on the shelf — but these adjustments are often ad hoc and informal. More controlled and powerful experiments can be implemented using the basic principles of experimental design (summarized in Chapter 19) to test key elements of the marketing mix in any shopping environment.

279

280

Part IV: Measuring Consumer Response with Neuromarketing Here are some examples of experiments (some are mentioned elsewhere in the book) that can serve as models for do-it-yourself tests in retail settings: ✓ Testing the effect of background music: The wine test described in Chapter 12 is a good example of controlling the stimuli in a test to isolate the effect of one environmental factor on sales — in this case, the effect of French versus German music on French versus German wine sales. ✓ Testing the threshold of choice overload: The jam varieties test mentioned in Chapter 12 illustrates how to test for the effects of variety on choice behavior. Similar experiments can be designed to test the effect of categorization on choice in different product classes. ✓ Testing the effect of scent in the air: In a behavioral experiment described by research firm BrainJuicer, scent dispensers were installed in two matched lingerie stores. Over a period of six weeks, scents were introduced in one store but not in the other for one week; then the treatments were reversed the next week. At the end of the experiment, sales were compared between the two stores. This simple and elegant design effectively controlled for a wide variety of extraneous factors that could influence sales in addition to scent in the air. ✓ Testing product adjacencies: In an experiment described in several tradeshow presentations, a snack-food company compared aisle and product sales across multiple grocery stores when chips and dip were placed together in the aisle or kept separate. Using experimental design to balance other factors that could influence sales, they discovered that coplacement of these related products resulted in an average increase of 7 percent in dip sales and 3 percent in overall aisle sales, creating a persuasive case for co-placement for both the snack company and the retailer. ✓ Testing the effect of product bundling: In his book, Decoded: The Science Behind Why We Buy (Wiley), Phil Barden describes many clever behavioral experiments, including a series of experiments conducted in school cafeterias to test the impact of different food presentations on eating behavior. One notable finding was that bundling healthy desserts as part of the price of the lunch, but charging separately for unhealthy desserts, resulted in a 71 percent increase in healthy dessert consumption and a 55 percent decrease in unhealthy dessert consumption.

The key elements of good in-store experiments are

✓ Clear hypotheses ✓ Precise definitions of the environmental features you’re comparing ✓ Unambiguous behavioral outcomes ✓ Good controls to minimize the influence of extraneous factors on your results

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers Thanks to the availability of automated testing tools and the inherent flexibility of web-page design, online experiments are even easier to set up and run. Using testing tools like the online experiment manager Optimizely (www. optimizely.com), you can quickly and easily set up testing scenarios — for example, moving around the placement of your “Buy Now” button — and allow the testing software to take care of the details, such as keeping track of randomly presenting each alternative design, adding up the behavioral results for each option, and preparing comparative statistics so you can see what works best.

Testing behavioral economics principles in real-world settings To get the full benefit of do-it-yourself experimentation, you need a clear understanding of what you want to test, as well as how you want to test it. This is where behavioral economics, with its emphasis on heuristics (judgment and decision-making shortcuts) and biases, can provide guidance for identifying candidate scenarios for experimental testing. In Chapter 8, we list six prominent heuristics that have been identified by behavioral economists (there are, of course, many more heuristics, but these are some of the most well-known). To illustrate how behavioral economics principles can guide the formulation of simple experiments, let’s take another look at each of these heuristics and see how they may help generate useful hypotheses for experimental testing: ✓ Loss aversion: This is the principle that people don’t value gains and losses equivalently. Consider testing whether presenting an offer as achieving a gain versus avoiding a loss leads to differences in sales. ✓ Anchoring: This is the principle that people tend to compare things in relative, not absolute, terms. Anchoring is especially relevant to pricing strategies and the order in which alternatives are presented. Consider testing whether demand for a premium product increases when it’s presented next to an even higher-priced alternative versus when it’s presented as the most expensive option. ✓ Framing: This is the principle that context matters, sometimes more than content. Framing is particularly influential when products are placed in a promotion versus prevention frame. For example, consider testing whether consumers are more likely to buy a product that “enhances energy” versus “prevents fatigue.” ✓ Default bias: This is the principle that people tend to choose defaults rather than make active selections. Consider testing with regard to presenting product extensions, for example, comparing sales of a product with the warranty included by default versus one for which the warranty must be added by making an additional decision.

281

282

Part IV: Measuring Consumer Response with Neuromarketing ✓ Affect heuristic: This is the principle that consumers often use affect (positive or negative feelings) as a substitute for making cognitively demanding logical calculations. Consider testing whether adding likable imagery (smiling faces, puppies) to a complex choice task changes choice behavior. ✓ Endowment effect: This is the principle that people treat things they have as more valuable than things they don’t have. Recent research on the endowment effect has found that it also increases to the extent that an object is perceived as having any personal meaning, even if someone doesn’t own it. So, consider an experiment in which a product is accompanied by a “background story” in one condition and not in another. Does the story increase the price consumers are willing to pay? As is clear from these brief examples, behavioral economics is a fertile field for marketers to generate insights and hypotheses for do-it-yourself experimentation. Unlike more complex neuromarketing alternatives, these experiments can often be managed without requiring the intervention and added expense of a neuromarketing partner.

Balancing Costs and Benefits in Neuromarketing Studies Looking at the wide range of neuromarketing solutions described in this chapter and in Chapter 16, you may be wondering how it’s possible to navigate through so many possibilities and select the right approach to match both your research needs and your budget. We address this question from a technology point of view in Chapter 18 and from a partnering point of view in Chapter 21, but we want to make a couple comments here from a cost-benefit point of view. In most technology-based fields, the more technology you apply to a problem, the more precise, understandable, and action-relevant information you get as a result. In medicine, for example, you can get pretty good and relatively cheap information from a physical examination, but you can get much more accurate and actionable information from a CT scan. In neuromarketing, this equation of advanced technology, higher cost, and better understanding hasn’t yet been achieved. It’s somewhat ironic, and a clear challenge to the field, that the less technologically advanced approaches are often the easiest to understand. As complexity increases, metrics and measures seem to get more obscure and harder to interpret, not less.

Chapter 17: Neuromarketing on a Budget: Inexpensive Ways to Learn from Your Customers People find it relatively easy to grasp how response-time studies work, and what the results mean. They understand how eye tracking works, and why it’s important to know where people are looking and how long they’re looking there. They know it’s better for an ad to produce smiles than frowns. Similarly, they “get” most biometric measures: It makes sense that we open our eyes wider when we’re surprised, our hearts race and our palms sweat when we’re excited, our pupils dilate when we’re interested, and so on. But the more advanced approaches in neuromarketing are still struggling to make their metrics meaningful and actionable. Few marketers walk into a first meeting with an EEG or fMRI neuromarketing specialist knowing anything about brain waves or blood flow to regions of the brain with unpronounceable names, nor do most marketers know why they should care about these things. Given that computing power in the modern world will continue to increase at an exponential rate, all the simple and inexpensive solutions described in this chapter will inevitably continue to get smarter, faster, and cheaper over time. If the more advanced neuromarketing technologies want to compete, they have to translate their technological superiority into business costbenefit terms that their clients can understand and will be willing to pay for.

What’s the potential buyer of neuromarketing research to do? We suggest a few basic guidelines:

✓ Keep an eye on the web-based services. Limitations that may have made them noncompetitive six months ago may be gone today. ✓ Don’t rely on vendors to tell you what’s wrong with other vendors. Rely on your own research, or hire a neutral consultant to help you sort out the alternatives. ✓ Follow a disciplined selection process to decide the best approach and cost-benefit trade-off for you (see Chapter 21). ✓ Don’t be afraid to try some simple experimentation on your own. Sometimes the easiest-to-implement experiments yield the most valuable results. ✓ Be wary of vendors who cite technology reasons for charging higher prices. Demand business impact reasons so you can properly balance costs with achievable business benefits.

283

284

Part IV: Measuring Consumer Response with Neuromarketing

Chapter 18

Picking the Right Approach for Your Research Needs In This Chapter ▶ Summarizing the range of consumer brain responses measured by neuromarketing ▶ Classifying which technologies are best for measuring responses in key marketing areas ▶ Seeing how some companies are combining neuromarketing and other research

approaches

I

n Part II, we fill you in on the new view of the consumer emerging from brain science. In Part III, we look into how nonconscious processes play a role in six marketing areas. And in Part IV, we review a wide variety of neuromarketing methods and technologies that can be used to measure consumer responses and behavior. In this chapter, we pull these threads together into a unified viewpoint of what goes with what. Our goal is to give you a quickreference guide for pinpointing where neuromarketing can help you address your research needs. We begin with a fresh classification of the kinds of brain processes and outcomes neuromarketing can measure. Then we look at the intersection of each technology area and each marketing area. For each intersection, we provide a list of those processes and outcomes we believe are best suited for measurement by that technology in that marketing area. It’s a high-level matchup, a snapshot at a moment in time for a field that is rapidly evolving, but it’s a good starting point for navigating through the neuromarketing field and deciding where and how neuromarketing can be a useful market-research approach for you. We conclude with a short section on integrating neuromarketing into larger research programs. We describe how some leading-edge companies are building next-generation research organizations that combine neuromarketing with other research approaches — some traditional and some as new as neuromarketing — for a more comprehensive picture of their consumers, products, and brands.

286

Part IV: Measuring Consumer Response with Neuromarketing

Summarizing What You Can Measure with Neuromarketing To create a high-level overview of what goes with what, we first need to do a little classifying of the many brain processes we discuss in this book. Here are a dozen consumer responses that can be measured by neuromarketing techniques and technologies: ✓ Implicit associations (introduced in Chapter 5) are connections in longterm memory. They’re key to understanding impressions of novelty, familiarity, and processing fluency. ✓ Priming (introduced in Chapter 5) is the basic mechanism by which objects and situations in our environment nonconsciously influence our attitudes, goals, and behaviors. ✓ Attention (introduced in Chapter 6) is the brain mechanism by which nonconscious inputs get elevated to conscious awareness. Levels of attention influence emotions, memory, and expectations. ✓ Discrete emotions (introduced in Chapter 6), such as happiness, sadness, surprise, disgust, fear, anger, and contempt, are our universal emotional reactions to the world around us. ✓ Emotional arousal and valence (introduced in Chapter 6) are dimensions (as opposed to discrete types) of emotion. Arousal refers to level of stimulation, intensity, and agitation. Valence refers to direction of liking or disliking, positive or negative reaction. ✓ Approach and avoidance (introduced in Chapter 6) are the two nonconscious dimensions of motivation that drive action. They’re motivational sources of attraction and aversion, and they’re heavily influenced by nonconscious, emotional conditioning (somatic markers). ✓ Memory activation (introduced in Chapter 5) is the extent to which memory encoding or retrieval is triggered by an experience. ✓ Value (introduced in Chapter 8) is the mental calculation of expected value, experienced value, and remembered value. It’s derived from balancing loss aversion (cost, pain, inconvenience) with reward seeking (pleasure, benefit, payoff).

Chapter 18: Picking the Right Approach for Your Research Needs ✓ Usability (introduced in Chapter 13) is the degree to which an online task is experienced as easy to do, efficient, and enjoyable. It’s an attribute of web pages and websites. ✓ Preference (introduced in Chapter 8) is the judgment of value among alternative choice options. ✓ Choice (introduced in Chapter 8) is a key marketing outcome variable. It can be a result of implicit or explicit decision making and is measured directly by choice experiments. ✓ Behavior and performance (introduced in Chapter 2) are additional important marketing outcome variables. A behavior is an observable action. Behaviors are outcomes of conscious and nonconscious mental processes, encompassing what people say and do. Performance is determined by measuring behavior against a goal or expectation, resulting in a judgment of relative success or failure.

Matching Neuromarketing Approaches to Research Questions The consumer responses we list in the preceding section can be matched up to the neuromarketing methods and technologies we cover in Chapters 16 and 17, as well as to the marketing application areas we cover in Part III. We provide our estimates as to what goes with what in Table 18-1. As you can see by glancing at the table, some cells are blank; that’s because some methods and technologies can’t be used, or aren’t optimal, for measuring consumer responses in some application areas. Other cells contain the consumer responses that can best be measured using a particular method or technology in each application area. To make this task of matching consumer response measures to methods and technologies more manageable, we group the technologies covered in Chapters 16 and 17 into six broad categories: behavioral response-time studies, eye-tracking, behavioral experiments, biometrics, electroencephalography (EEG), and functional magnetic resonance imaging (fMRI).

287

Implicit associations, priming, choice

Preference, choice

Preference, choice

New product innovation

Product and packaging design

Behavioral Response-Time Studies

Attention, choice

Eye Tracking

Priming, choice, behavior

Priming, choice, behavior

Behavioral Experiments

Emotional valence and arousal

Emotional valence and arousal, behavior

Discrete emotions, emotional valence and arousal

Biometrics

Implicit associations, approachavoidance, memory activation

Approachavoidance, memory activation

Implicit associations, approachavoidance, attention, memory activation

EEG

Measuring Consumer Responses to Marketing and Entertainment

Branding

Table 18-1

Implicit associations, value, choice

fMRI

288 Part IV: Measuring Consumer Response with Neuromarketing

Attention, usability

Attention

Online experience

Entertainment

Attention

Attention, preference

Implicit associations, priming, choice

Eye Tracking

Shopping and in-store marketing

Advertising

Behavioral Response-Time Studies

Choice, behavior

Priming, choice, behavior, usability

Priming, choice, behavior

Priming, choice, behavior

Behavioral Experiments

Emotional arousal and valence

Usability, discrete emotions, emotional valence and arousal

Discrete emotions, emotional valence and arousal

Biometrics

Implicit associations

Approachavoidance, choice

Implicit associations, approachavoidance, attention, memory activation

EEG

Attention, behavior

Value, choice

Value, behavior

fMRI

Chapter 18: Picking the Right Approach for Your Research Needs

289

290

Part IV: Measuring Consumer Response with Neuromarketing

Behavioral response-time studies Behavioral response-time studies (discussed in Chapter 17) are simple, scalable, inexpensive, and easy-to-interpret tools for measuring implicit associations, semantic and affective priming, preferences, and choices. Because they depend on rapid responses to discrete choice or classification tasks, they work best with words and static images as stimuli. They’re a good choice for studying brands and products, but they’re less appropriate for studying advertising (except for print or other static ads), shopping, online tasks, or entertainment.

Behavioral response-time studies can be quickly set up using online services that take care of all the underlying coding required to ensure accurate timing of the selection tasks. Experimental templates are also available that are easy to customize to work with your own stimuli. Experiments can be run using existing online panels of consumers, allowing you to get hundreds of completed trials from qualified participants in very short time frames.

Eye tracking Eye tracking (discussed in Chapters 16 and 17) includes measuring eye movements and fixations, eye blinks and the startle reflex, and pupil dilation. It’s a very popular stand-alone technique in neuromarketing studies. It’s also regularly combined with other approaches when the stimuli being studied are visual. It’s less useful for branding and new product concept studies because these studies often don’t involve visual stimuli. The availability of well-established metrics, which are often built into the eye-tracking software, makes eye tracking an excellent solution for measuring attention, cognitive processes underlying choice (used in combination with forced-choice testing), implicit preferences, and online usability. Eye tracking leaves some questions unanswered — such as whether a fixation is a function of interest or confusion — but eye-tracking metrics are intuitive and direct measures of behavior that most people find easy to understand and interpret. Eye tracking comes in two flavors: online eye tracking through the webcam and lab-based eye tracking using specialized equipment. A neuromarketing vendor should be able to help you decide which approach is the best balance of precision and scalability for your needs.

Behavioral experiments Behavioral experiments (discussed in Chapter 17) are the primary technique for testing principles and insights from behavioral economics and social psychology. The experimental approach (see Chapter 19 for a review

Chapter 18: Picking the Right Approach for Your Research Needs of the basics) is flexible, relatively inexpensive, easy to set up, and easy to understand and interpret the results. With heuristics (judgment and decisionmaking shortcuts) as a guide, behavioral experiments can be an excellent technique for testing hypotheses about priming, choice, and behavior in different consumer scenarios. Behavioral experiments are especially useful for studying the effects of priming on choice and behavior in shopping situations, in both physical and online stores. They’re also beginning to be used more for testing the impacts of brands, products, packages, and advertising as primes of choice and behavior. Behavioral experiments can also be used to test choices and behaviors triggered by entertainment experiences, such as responses to new movie trailers. The chief advantage of behavioral experiments is that they measure behavior directly, so there is no intermediate step of translating raw signal measures into interpretable metrics.

Biometrics Biometrics (discussed in Chapter 16) measure a wide range of physiological (body) responses — facial expressions, facial muscle movement (facial electromyography [EMG]), skin conductance due to perspiration (electrodermal activity [EDA]), heart rate, blood pressure, respiration — that can be used across most marketing areas. The only area where biometric measures are not extensively used is in shopping and in-store studies, because physical movement in shopping environments often creates interference with body signals. Biometrics are best suited for measuring nonconscious and conscious emotional responses to stimuli. Autonomic nervous system measures like EDA and heart rate are most useful for measuring emotional arousal, facial EMG is a reliable measure of emotional valence, and facial expression analysis (both automated and expert-based) is primarily used to measure discrete emotions (joy, surprise, and so on). Facial expression, facial EMG, and arousal measures are also useful for testing online usability, because these measures are good for gauging longer-term emotional responses to online tasks, such as confusion, frustration, or boredom. One neuromarketing vendor (Innerscope, Inc.) has reported using biometric measures successfully to predict marketplace behavior for new product designs, so we include behavior as a response that can be measured by biometrics for that application area.

291

292

Part IV: Measuring Consumer Response with Neuromarketing Biometric methods are less complex than EEG and fMRI methods, but they still represent a significant step up in complexity compared to behavioral response-time studies, eye tracking, and behavioral experiments. Unlike those approaches, biometric studies require expert knowledge and experience to correctly apply sensors, control data collection conditions, and convert raw signal results into interpretable metrics.

Electroencephalography As discussed in Chapter 16, EEG measures electrical brain waves. EEG studies represent another step up in complexity compared to biometric studies. They require PhD-level training in neuroscience to oversee the study from start to finish — from experimental design to study preparation to data collection to data analysis. For this reason, EEG studies are almost always conducted in partnership with an EEG technology specialist. EEG has been used with good results in branding, product innovation, product and packaging design, and advertising studies. It has been less commonly used in shopping studies, although one neuromarketing firm (Sands Research, Inc.) has reported interesting results using mobile EEG equipment and eye-tracking glasses to study choice and behavior in real-store shopping scenarios (see Chapter 7). Fewer EEG studies have been reported in online experience testing. This may be because the free-ranging nature of goal pursuit in online tasks is hard to reconcile with the high degree of experimental control required for reliable measurement of EEG signals, which need to be averaged over multiple individuals. When engaged in online tasks, people will pursue their goals in different ways, producing different sequences of mental states and emotional reactions, which are hard to integrate and interpret with EEG. EEG has been most effective for measuring nonconscious approach-avoidance motivational reactions to stimuli, using the hemispheric asymmetry approach described in Chapter 16. EEG is also well established as a method for measuring moment-to-moment changes in attention using frequency band fluctuations, and it’s the only measurement technology able to identify memory activation in real time. Finally, event-related potentials (ERPs) have been used extensively to explore many aspects of implicit associations, including emotional valence, personal relevance, and expectancy violation.

Functional magnetic resonance imaging fMRI (discussed in Chapter 16) measures blood flow to different regions of the brain associated with mental tasks and states. fMRI is the most complex technology used in neuromarketing. It’s considered the gold standard for

Chapter 18: Picking the Right Approach for Your Research Needs brain imaging by academic neuroscientists, but the same features that make it the most precise imaging technology also make it the least practical. fMRI machinery is huge and expensive, and it’s found only in hospitals and the best-funded neuroscience research facilities. But it’s also the only technology that can pinpoint activity at any location within the brain, as long as that activity can be sustained for the three to five seconds it takes to produce a full brain scan. In consumer neuroscience (the academic sister discipline to neuromarketing), fMRI has been used to study branding, advertising, shopping, and entertainment. Major studies in branding have identified implicit associations and reactions to brands that impact the process of assigning value to a product or outcome. Studies have found that powerful brand associations have the capacity to influence basic sensory experiences like taste and smell, as well as product choices. fMRI is the only technology able to reveal the dynamics of value creation in the human brain, allowing neuroscientists to identify how reward expectations and loss aversion (resistance to spending) are activated in different parts of the brain and reconciled in the process of product or brand choice and purchase. fMRI has been used to predict both individual and marketplace behavioral outcomes following exposure to TV advertising. (These studies by Falk, Lieberman, and colleagues are discussed in Chapter 22.)

Integrating Neuromarketing and Traditional Research Approaches In this book, our focus is on neuromarketing, but for businesses that regularly use market-research services, a broader perspective is required. For both large and small consumers of research, neuromarketing is only one tool in a larger toolkit of approaches and methodologies. To integrate effectively into broader research programs, neuromarketing needs to fit in as well as stand out.

Taking a big-picture view of market-research requirements Figure 18-1 depicts three fundamental ways consumers interact with a brand or product: being exposed to its marketing messages, shopping and buying a brand or product, and consuming or using a product.

293

294

Part IV: Measuring Consumer Response with Neuromarketing



Figure 18-1: The consumer cycle: marketing, shopping, consuming.

Illustration by Wiley, Composition Services Graphics

These three modes of interaction make up three stages in a cyclical relationship between the consumer and the product or brand. Each stage produces outputs — expectations, associations, or choices — that then become inputs into the next stage: ✓ Marketing: Consumers’ responses to marketing begin with expectations based on prior product experiences. The purpose of marketing is to change or reinforce those expectations by strengthening mental associations with the brand or product. Updated associations are the output of successful marketing messages. ✓ Shopping: When consumers enter a shopping environment (in-store or online) they bring their mental associations with them. Through the process of shopping (searching, choosing, and paying), some associations are activated and others are not, and the outcome is a choice, which results in a purchase. ✓ Consuming: The output from shopping is the input for consuming. Purchased products are consumed in product experiences, which further update associations and expectations. These expectations then become inputs into consumers’ responses to later marketing messages. A perfect market-research program would be one that covers this complete consumer cycle and generates key performance indicators for each stage of the cycle and each transition point. In other words, it would connect marketing to shopping, shopping to consuming, and consuming to marketing, all with a unified set of metrics and measures.

Chapter 18: Picking the Right Approach for Your Research Needs Some leading companies are beginning to think about market-research programs in this comprehensive way. They’re frustrated with discrete research approaches that don’t add up (neuromarketing included). They want integration and synthesis across their research data, with results combined into a holistic framework that provides a comprehensive view of their consumers at every point in the consumer cycle.

Thinking about capacity and capabilities for integrated studies The first step in building a comprehensive market-research program is determining what methodologies and technologies need to be included. In large marketing-focused companies today, four major research streams are likely to be active in one part of the marketing organization or another: ✓ Observational research: These studies use anthropological or ethnographic approaches, or traditional interviews and focus groups, to observe consumers with minimal intervention. They’re qualitative rather than quantitative, and they’re aimed at discovering new facts and insights about consumers. ✓ Online and mobile research: Today, online and mobile research is mostly devoted to online panel studies of various kinds and social media (or “buzz”) content analysis. With neuromarketing, online and mobile can expand to include behavioral response-time studies, rapid forcedchoice studies, and webcam-based implicit response studies. ✓ In-store, point-of-sale (POS) research: These studies are conducted in real or mock stores to examine shopping and buying behavior. Main subjects of research are signage and display testing, shelf-display studies, and traffic-pattern studies. Neuromarketing adds in-store behavioral experiments and nonconscious priming studies to the mix. ✓ Performance and return-on-investment (ROI) research: These studies use consumer panels, media exposure data, and POS purchasing data to assess the performance and ROI of marketing expenditures. For the most part, these studies require massive amounts of data that can only be provided by the largest research companies. Performance and ROI data are critical to developing normative databases, a topic discussed in more detail in Chapter 19. To this list, neuromarketing adds a fifth research stream: ✓ Lab-based studies: These are experimental studies that are conducted in controlled laboratory conditions, using biometrics, EEG, or fMRI technologies. Lab studies also include simulations and virtual-reality experiments.

295

296

Part IV: Measuring Consumer Response with Neuromarketing The second step in integrating all these data streams is to develop and deploy a comprehensive knowledge repository of findings and lessons learned from all five research streams, organized around a holistic framework like the consumer cycle model (see Figure 18-1). This knowledge repository can then be used to bring together findings, identify new insights, and most important, provide a performance-based foundation for calculating the ongoing ROI of a company’s full investment in marketing and market research.

Building an organizational structure for integrated studies Leading companies are just beginning to think about their research efforts in this holistic way. Some are asking large market-research firms to outsource the functionality and management of such an organization; others are building the capability in-house using internal resources and outside consulting help. The ultimate vision is a kind of “mission control” for research — bringing together the latest technologies from neuromarketing, other new research methodologies, and traditional techniques — within a single organization devoted to planning and oversight of a company’s complete research program.

Part V

Living with Neuromarketing: Practical and Ethical Considerations

H

In this part . . .

ere, we consider some important practical and ethical considerations for using neuromarketing. We describe a number of best practices that both large and small companies can employ to ask the right questions, design the best studies, pick the right neuromarketing partners, and achieve the best results for their market research spending. We also look at what constitutes responsible and ethical neuromarketing and address some of the public policy questions that have arisen around neuromarketing. We consider whether neuromarketing should be limited or whether it may, in fact, become a force for good in society.

Chapter 19

Five Things You Need to Know about Neuromarketing Studies and Measures In This Chapter ▶ Seeing how good experiments work ▶ Understanding validity and reliability of neuromarketing metrics ▶ Looking at what reverse inference is and why it matters ▶ Knowing what statistics to expect in neuromarketing studies, now and in the future ▶ Appreciating how normative data connects neuromarketing to real-world business

decisions

W

hether you’re planning a neuromarketing study of your own, interviewing a neuromarketing vendor, or just discussing neuromarketing around the water cooler, this chapter covers five things you need to know to be a smarter consumer of neuromarketing and, if necessary, a smarter critic: ✓ You need to be able to judge the quality of experimental designs. ✓ You need to be clear about what the metrics are actually measuring. ✓ You need to understand the problem of reverse inference, and how it is being addressed. ✓ You need to know how much to trust the findings, which means you need to understand how statistics are being used. ✓ You need to know if and how normative data is being used. These are all big topics, and our goal in this chapter is not to make you an expert in any of them. Instead, we focus on a few key tips for each topic, and provide just enough detail so you can understand why the topic is important, how it impacts the quality of neuromarketing studies, and what best practices you should be aware of — for a single study, for a neuromarketing vendor, or for the field of neuromarketing as a whole.

300

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Experimental Design: Identifying How Good Experiments Work Experimental design is not a familiar topic for many first-time neuromarketing research buyers, because most market researchers have a background in survey research rather than experimental research. To assess the quality of a survey, most market researchers know exactly where to look: at the representativeness of the sample, at the question wording, at the order of the questions, and so on. What are the equivalent key points for assessing the quality of an experimental design? Here are some guidelines.

Three questions every good experiment must answer In any neuromarketing experiment, you should be able to quickly and easily answer three questions about the design: ✓ What is the response being measured? Also called the dependent variable, the response is the outcome being measured by the experiment. In a neuromarketing experiment, you want a response that has clear business implications: What do consumers choose? How do consumers’ behaviors change? How do consumers’ preferences change?

Be cautious about neuromarketing studies that have a response variable that occurs only in people’s minds. For example, suppose a study measures “attention to advertising” as its response variable. What are the business implications of high versus low attention for a particular ad? As we show in Chapter 11, attention may be more or less desirable depending on the style of the ad. In contrast to this pure state-of-mind response, a behavioral response such as “likelihood to buy the advertised product after watching the ad” has stronger business implications.

✓ Who are the subjects being studied? The subjects of the study are the sources of the response. In neuromarketing, the subjects are usually consumers with some kind of relationship to a brand or product. What’s most important in neuromarketing studies is how the population is defined and whether the subjects are effectively drawn randomly from that population. Often, the study is about how responses vary by subgroups within a population, such as men versus women, loyal product users versus switchers, or older consumers versus younger consumers. These groups must be defined before subjects are selected, so the right number of subjects is recruited and assigned to each subgroup to be compared in the experiment.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures In a neuromarketing experiment, it should be clear how subjects are recruited and why they represent a good random sample of the population of interest. If the sampling is biased, results from the experiment can produce faulty generalizations when applied back to the target population.



A common problem with neuromarketing studies is self-selection bias. Because people who are willing to climb into a functional magnetic resonance imaging (fMRI) machine or have an electroencephalography (EEG) cap put on their heads tend to be more adventurous than average folks, this can bias the results for a study in which people who are more or less adventurous may respond differently. Be sure to discuss sample selection criteria with your neuromarketing partner. ✓ What are the treatments being applied? Also called the independent variables, treatments are the different interventions applied to subjects that do or don’t generate different responses. In neuromarketing studies, the treatments are usually exposures to different marketing stimuli, like different versions of ads, packaging designs, or in-store displays.



In a neuromarketing experiment, the treatments need to be designed in a way that maintains equivalency on aspects of the treatments that are not being studied. If one ad is played at a high volume and another is played at a low volume, for example, that’s a violation of equivalency that can bias the results. We cover a number of potential issues of this kind in Chapter 20. In a well-designed experiment, identifying these three elements and how they interact should be easy. In particular, look for anything that can introduce bias into the results. An experiment with a fuzzy or weak response, a biased sampling procedure, or treatments that don’t properly hold constant other influences that can impact the subjects’ responses will yield misleading results no matter how skillfully conducted.

Knowing what to let change and what to hold constant The logic of an experiment revolves around the idea of variability (how the responses differ for different combinations of treatments and subjects). Experiments are designed to partition (divide up) that variability into three separate sources: One is the source of variability you want to measure; the other two are sources of error (that is, variability you want to control or minimize). Asking questions about how variability is handled in an experiment is

301

302

Part V: Living with Neuromarketing: Practical and Ethical Considerations another good way to assess the quality of an experimental design. Here are the three sources of variability: ✓ Variability in the response due to different treatments: This is the variability you want to see. If you’re testing whether memory is activated differently by two ads, for example, you want to see if one ad clearly activated more memory than the other. ✓ Variability due to how the response is measured: This is called measurement error, and it’s a source of variability you want to minimize. If your memory measure is not very accurate, for example, you’ll pick up differences in responses that are due not to the treatments, but to measurement error. ✓ Variability due to the experimental process: This is another source of variability you want to minimize. It comes from how the experiment is conducted. For example, suppose you do testing in two rooms, one of which is very cold and the other of which is very hot. You may get different results due to which room was used. That is variability due to experimental process.

Neuromarketers’ skill at controlling variability due to experimental process can be a major point of differentiation. Especially for sensitive measures like EEG, fMRI, or biometrics, it isn’t easy to get comparable results across tests performed in different locations, by different technicians, using different equipment. Vendors able to minimize variability across these conditions do so by rigorously standardizing procedures, facilities, and training. If you want to do cross-cultural or global testing, this can be an important consideration when comparing neuromarketing partners. Although you always want to minimize variability due to measurement and experimental process, you can never eliminate it. Whether this is a serious or manageable problem depends on the kind of variability you’re dealing with. Figure 19-1 illustrates two types of error that have very different implications for the outcome of an experiment.



Figure 19-1: Error due to chance versus error due to bias.

Illustration by Wiley, Composition Services Graphics

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures Error due to chance is manageable because it’s equally likely to go one way or another. In the long run, if you take enough measures, the errors will cancel each other out and, on average, you’ll get a good estimate of the true underlying value (the bull’s-eye, in the target on the left). Error due to chance can’t be eliminated, but it can be controlled by random assignment of subjects to treatments and having a large enough sample size. Error due to bias is much more troublesome. In fact, it can be disastrous because it can move the whole experiment off center, as illustrated by the target on the right. Bias is systematic (not random) error that is uncontrolled because, most of the time, you don’t know it’s there. It’s stealth error that fools you into thinking you have an accurate answer, even though you don’t.

Good experimental designs have explicit safeguards against error due to bias. Beyond any individual experiment, metrics and measurements need to be tested to assess their level of measurement error, and experimental procedures and practices need to be standardized for consistency to minimize experimental process error. These are not the kinds of efforts that appear in research reports, but they’re fundamental to ensuring that neuromarketing results (or any research results, for that matter) can be trusted as a basis for decision making.

Three rules of thumb for designing good experiments Good experimental design comes down to three rules of thumb: ✓ Isolate the effects of interest. Define as precisely as possible the responses, treatments, and subjects you want to measure. If the experiment involves multiple treatments, be sure you measure them both separately and together so you can disentangle their effects later on. ✓ Control what you can. Hold extraneous variables constant whenever possible. Make treatments as similar as possible except for

the elements you want to compare. Minimize unwanted sources of variation, whether in measures or experimental process. ✓ Randomize the rest. For potential sources of error you can’t control, use random assignment and selection to even out the unwanted effects. Randomly assign treatments to subjects, randomly select the order of treatment exposures, randomly assign subjects to testing rooms and equipment, and so on. This will allow any random errors you’re unable to control to cancel each other out as the data is collected.

303

304

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Measurement Theory: Understanding Validity and Reliability In neuromarketing, an inescapable fact is that the metrics are a lot more mysterious than the metrics marketers are used to in traditional research. Everybody has a pretty good idea what the metric called day-after recall means — it means, “This is what people remember the day after they see an ad.” But what does memory activation mean? A neuromarketing vendor might say it means “increased activation of theta band activity in the medial frontal cortex while watching an ad,” but what exactly does that mean? Luckily, there is a branch of research methodology that deals with questions like this, called measurement theory. Although this can be a deep topic for researchers, the basic principles are very accessible and can help you think about, and ask intelligent questions about, the metrics and measures you encounter in neuromarketing.

Measuring the right thing and measuring it right Measurement theory looks at the quality of metrics along two dimensions: ✓ Validity: The extent to which a metric measures what it says it measures. It answers the question, “Are you measuring the right thing?” ✓ Reliability: The extent to which a metric performs similarly in similar circumstances. It answers the question, “Are you measuring it right?” To understand validity, you need to understand the idea of a theoretical construct. A theoretical construct is an idea about something that exists in the world. For example, in this book, we talk about attention, emotion, processing fluency, and many other ideas. These are all theoretical constructs. They can’t be measured directly. So, we measure things we can measure, and hope they actually measure the construct we’re interested in. If they do, we say they’re valid measures (or if we want to sound very scientific, we say they have good construct validity). This may sound hopelessly abstract, but it’s not that difficult to assess the validity of a neuromarketing metric. Consider a metric called “attention.” If it’s a valid measure, it should produce a higher score when someone is doing something that we believe ought to draw more attention (based on our understanding of the theoretical construct), such as watching a car chase in

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures a movie, and produce a lower score when someone is doing something that ought to draw less attention, such as watching cows grazing in a meadow. This ability to discriminate between different levels of the theoretical construct is called discriminant validity. A valid measure of attention should also produce the same or similar results as other measures of attention, such as an eye-tracking measure, a heartrate measure, or a self-report of attention (because attention is a conscious response). To the extent it does so, we say the metric has convergent validity.

Because neuromarketing metrics are somewhat obscure by nature, reputable vendors should have available lots of examples of both the discriminant validity and convergent validity of their metrics. We recommend going over these examples in detail with your neuromarketing vendor so you’re sure that its metrics are measuring what you want to measure in your experiment. Reliability can best be understood in terms of repeatability. If you’re “measuring it right,” then you should get the same answer every time you measure the same thing. For example, if two samples are drawn from the same population and exposed to the same stimulus in the same experimental conditions, the results should be very similar (with differences due only to random error). Repeatability is the key characteristic of a reliable metric.



As with examples of validity, reputable neuromarketing firms should be able to show you examples of the reliability of their metrics. We recommend reviewing these examples in detail before establishing a relationship with a neuromarketing vendor, because they provide an excellent indication of the overall quality of the vendor’s practices and capabilities. The Holy Grail of measurement theory, in neuromarketing as in any other field, is generalizability. A metric can be considered generalizable only if you have good reasons to believe it will produce both the same answer and the right answer in a comparable future circumstance. As shown in Figure 19-2, generalizability requires both validity and reliability.



Figure 19-2: Validity, reliability, and generalizability.

Illustration by Wiley, Composition Services Graphics

305

306

Part V: Living with Neuromarketing: Practical and Ethical Considerations The four targets in Figure 19-2 illustrate the four possible combinations of validity and reliability. Imagine that the dispersion of holes is subjects’ measured responses in an experiment in which the “true” response is the bull’seye. Here is how the four patterns relate to generalizability: ✓ Valid but not reliable: This combination is not generalizable because it contains too much random error. It’s likely to miss the right answer the next time because of noise in the metric. Because the error is random, an invalid-reliable metric is relatively easy to fix with larger sample sizes (large enough to allow the random errors to cancel each other out). ✓ Reliable but not valid: This combination is not generalizable because it’s not aimed at the right answer. It hits the target reliably, but it’s reliably wrong. This metric may appear to be a good measure if validation testing hasn’t been done, which makes it particularly dangerous. It’s not possible to fix a reliable-invalid metric unless the source of the systematic bias is identified and corrected. ✓ Neither reliable nor valid: This combination is not generalizable because it’s aimed at the wrong answer, which it usually misses. With so much going wrong, this combination is very hard to diagnose and fix. ✓ Both reliable and valid: This combination is the only one that hits the right answer and does so reliably, which means it’s most likely to hit the right answer the next time as well. A metric that has passed both reliability and validity tests is most generalizable — from sample to population, and from present to future.

Improving the validity and reliability of neuromarketing metrics Failures of validity and reliability can be traced to one or both of the “unwanted” sources of variability in an experiment: measurement error or experimental process error. Each of these sources, in turn, can be of two types: error due to chance (random noise) or error due to bias (systematic error). So, we have four leading causes of poor validity and reliability: measurement noise, experimental process noise, measurement bias, and experimental process bias. A basically valid metric that is unreliable due to random noise can be improved relatively easily by increasing sample size. Because the errors are randomly distributed around a valid center, they’ll cancel each other out in a large enough sample, revealing the true value of the underlying theoretical construct. If the source of the noise is the experimental process, reliability can also be improved by tightening up experimental procedures to produce less noise in results. A metric suffering from error due to bias will definitely be invalid and may be unreliable as well. Because bias produces systematic error rather than random “noise,” it can’t be managed by increasing sample size.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures If the underlying problem is measurement bias, there is probably a mismatch between the metric and the theoretical construct it’s meant to measure: The metric is indicating that the construct is either present when it’s not or not present when it is. The solution is usually to refine the metric with additional measures that can better identify the construct in those conditions where the original metric fails. If the underlying problem is experimental process bias, then the only solution is to identify and fix the source (or sources) of bias in the experimental process. If the biased process is basically reliable, then the metric is going to be reliably invalid. As noted above, this is a dangerous combination. For example, suppose an experimental process is found to be systematically, but very reliably, overestimating the amount of attention devoted to TV ads. An examination of the experimental procedure reveals that every ad is always preceded by an instruction “Please pay close attention to the following video.” This instruction may well be biasing people’s responses, causing them to pay more attention to ads in the experiment than they would when viewing ads at home (where no such instruction appears). The solution is to remove the instruction and see if the attention metric becomes more valid. If the experimental bias produces metrics that are neither valid nor reliable, there isn’t really much to be done. Such a situation is largely hypothetical, because it’s hard to imagine a neuromarketing company staying in business with metrics that were both invalid and unreliable.

Reverse Inference: Connecting Brain Measures to States of Mind The challenge of reverse inference has been discussed among academics mostly in the context of fMRI, but it applies equally to any methodology that attempts to connect measures of physical body and brain states (like facial expressions or electrical activity in the brain) to states of mind (like attention, emotion, or a decision to buy a product). The point critics make about reverse inference is that it isn’t a valid logical inference, which is to say, it isn’t logically true by definition. For example, here is a true-by-definition forward inference: All men are mortal. Joe is a man. Therefore, Joe is mortal.

307

308

Part V: Living with Neuromarketing: Practical and Ethical Considerations A reverse inference might be: Jane is mortal. Therefore, Jane is a man. This is not logically valid because it assumes, incorrectly, that All men are mortal. Therefore, all mortals are men. All men may be mortal, but it does not follow logically that only men are mortal. In fact, Jane represents the error in this inference. Some mortals are women. What does this have to do with neuromarketing? Academic brain science (the kind that gets published in academic journals) progresses largely on the basis of forward inference — that is, scientists create an experiment that induces a particular state of mind as a treatment, and then measure a particular brain or body state as a response. For example, in an fMRI study, scientists might randomly assign people to a sad-movie treatment or a funny-movie treatment to induce emotional states of sadness or happiness. Then they compare activations of regions in the brain for subjects in the two treatments, and infer whether activation in a certain brain region (a brain state) is associated with sadness or happiness (a mental state). That is forward inference. But an applied science, like neuromarketing, operates in the opposite direction. The researchers don’t know beforehand what mental state a particular treatment is going to induce, because that’s the question they want to answer. So, they look for brain or body states that have been found previously, in academic studies or in their own research, to be associated with a particular mental state. If those brain or body states are present, they infer that the mental state is probably present as well. That is reverse inference. In our fMRI example, researchers would be using reverse inference if they concluded that, based on activation of a region of the brain associated with happiness, the movie was probably inducing happiness.

We want to be very clear that reverse inference can go horribly wrong. The degree to which it can go wrong is directly proportional to the number of other brain states that a given brain or body state can be associated with. If this key piece of information is not somehow built into the reverse inference, you can end up with ridiculous conclusions like the iPhone example discussed in Chapter 16: Just because the insular cortex activates when you think about romantic love, and it also activates when you think about your iPhone, does not mean you are in love with your iPhone. In fact, it’s very unlikely to mean that, because the insular cortex has been found to activate in almost one-third of all mental states induced in fMRI tests.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures But there are also circumstances when reverse inference is less likely to go horribly wrong, and these are important to the logic of neuromarketing. Suppose (hypothetically) that the following results had been observed in academic neuroscience: In 300 experiments, when people were paying attention to something, they had less alpha wave power in their frontal lobes than when they were not paying attention. In only ten experiments studying attention and alpha wave power was this relationship not found. Now consider the following result and use of reverse inference in a hypothetical neuromarketing study: In our experiment, we found that people had less alpha wave power in their frontal lobes when they watched ad A than when they watched ad B. Therefore, we conclude that they paid more attention to ad A than to ad B. This is not necessarily true, because it could be the case that the observed alpha wave power was caused by something other than attention to the ad. For example, maybe the people watching ad A were paying attention to an ugly poster on the wall, or maybe they were distracted by a poorly fitting EEG sensor cap. In both these cases, the mistaken inference would be a function of experimental process error: That poster shouldn’t have been in the room, and the cap should’ve been fitted correctly. Or maybe the lower alpha wave power while watching ad A was caused by a mental state other than attention. In this case, the mistaken inference would be a function of measurement error: The attention metric being used was actually measuring something else, a different mental state than attention. For people who like logical purity, the fact that reverse inference can go wrong is enough to dismiss it as “nonscientific.” But for researchers who live in the world of applied science, logical purity is a luxury they can seldom afford. They’re more interested in probabilities and likelihoods, not certainty. So, the kind of inference a neuromarketer would make might go something like this: If the forward inference relationship between alpha wave power and attention is well established (and in this case it is, 97 percent of the time), and If we believe the neuromarketing experiment was well designed and executed so that the likelihood of experimental process error is low, and If we believe our metric of attention is valid and reliable, so that the likelihood of measurement error is low, and If the result found is a statistically significant decrease in alpha wave power in the frontal lobes while watching ad A compared to watching ad B, Then our confidence will be high that ad A did, in fact, attract more attention than ad B.

309

310

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Here are the important points you should remember about reverse inference:

✓ Neuromarketing studies use reverse inference all the time. Indeed, any applied science would be impossible without using reverse inference. ✓ Reverse inference is not logically true, so additional information needs to be taken into account to determine how much confidence you should have in it. ✓ Specifically, you need to be confident that the variability you’re observing is coming from the treatments in your experiment, and not measurement error or experimental process error. ✓ If you’re satisfied that the experiment and metric are sound, you can be confident that the reverse inference is true. But you can never be 100 percent certain that it’s true, only more certain than you were before the experiment was performed. Using a type of statistics called Bayesian analysis, it is possible to quantify the increase in confidence provided by an experimental result. We discuss this topic in the next section.

Statistical Significance: Knowing When to Believe the Results The use of statistics in neuromarketing studies is another huge topic, and we’re not going to provide a course in statistical methods here. That’s a topic for a different For Dummies book. Instead, this section is devoted to presenting a few best practices for using statistics in neuromarketing studies — from the bare minimum of statistical testing you should expect, to an introduction to some advanced methods that you may begin to see soon.

Statistical tests commonly used in neuromarketing studies

The first point to make about statistical testing is that any neuromarketing finding that is not qualified by an appropriate statistical test is a qualitative finding only and should be treated as such. It’s a finding whose validity, reliability, and generalizability are unknown. We believe it’s a bad idea to use any research finding that isn’t qualified by statistical testing as a guide to business decision making.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures The humble t-test The workhorse of statistical testing is the t-test, which is used in experiments to test whether you should believe it when two treatments produce different results with regard to a response measure. To use a t-test, the response needs to be measured as a continuous or interval-level variable, so you can calculate its mean (or average) across all subjects in each treatment. The t-test also takes into account the variability of the responses — that is, how widely they’re spread out across the subjects in each treatment. Determining whether a difference in means is statistically significant depends on both the means themselves and the variability in the underlying individual responses. The t-test is the simplest and most direct statistical test you should expect to see in a neuromarketing study. It’s limited to comparing two treatments only, so if the study has three or more treatments, or any other complications, the t-test won’t be appropriate.

More complex analysis of variance tests Most experimental designs are too complex for a t-test. For those designs, the appropriate tests will come from the family of statistical techniques called analysis of variance (ANOVA). These techniques are a generalization of the principles underlying the t-test. They’re all about assigning the variability in a response measure to various sources, including the treatments, interaction between the treatments, and leftover variability due to error.



ANOVA results are presented in ANOVA tables that should appear in a study report. If you aren’t familiar with how to read an ANOVA table, your neuromarketing partner should be able to walk you through it so you can see exactly which comparisons in your study are statistically significant and which are not. Understanding the statistics is vitally important to your overall understanding of the business significance of the study. Beware of vendors who simply list significance levels but don’t show how the statistics were calculated. Statistical significance is very closely related to validity, reliability, and generalizability, and is fundamental to deciding how much confidence to put in a finding. Making any business decision based on a study that is not completely transparent in its statistical testing is essentially flying your business blind. We don’t recommend it.

Getting more mileage out of statistical testing Statistical significance is the most common kind of test you’re likely to see on a neuromarketing study, but it’s actually a relatively weak statistical basis for business decision making.

311

312

Part V: Living with Neuromarketing: Practical and Ethical Considerations A statistic that is “significant at p = 0.05” (where p is probability) tells you only that the difference you observed in your experiment would occur only 5 percent of the time if, in fact, there was no real difference in the population you were sampling from (this is called the null hypothesis in statistics texts). But few if any studies are ever done because someone believes the null hypothesis is true. What you really want to know when you do a neuromarketing study is whether your results represent a strong or weak relationship between treatment and response and, ultimately, whether you should let this result impact your business decision making.

Comparing effects sizes In contrast to statistical significance tests, measures of effect size give you an objective and comparable way to classify the magnitude of an observed effect as small, medium, or large. For a difference between two averages, the most commonly used effect size statistic is Cohen’s d. Cohen’s d is a very intuitive statistic. It’s simply the difference between the average scores for the two treatments, divided by a measure of the variability or spread of the individual scores that make up the averages. Reporting a statistic like Cohen’s d alongside statistical significance allows you not only to gauge the size of any effects you have found, but also to compare effect sizes across treatments and even across studies that use difference measures. This provides much more decision-relevant information than can be derived from a significance score alone.

Encourage your neuromarketing partners to report effect size statistics in all their reporting. You’ll be helping establish a reporting standard for the neuromarketing field that has been adopted by most of the top psychology and neuroscience journals. (For more on neuromarketing standards, see Chapter 22).

Calculating probabilities with Bayesian inference In this section, we take a very brief look at a very advanced topic. Bayesian analysis is an approach to statistics based on the work of 18th-century mathematician Thomas Bayes. It’s relevant to neuromarketing because it provides a way to quantify the idea of confidence in a finding. That is, instead of just saying informally that you should have more or less confidence in a finding, Bayesian inference provides a mathematical framework for specifying precisely how much confidence you should have. We believe Bayesian inference will continue to grow in popularity as a statistical methodology because it’s very compatible with the language and logic of real business decision making. We also believe it will become more applicable to neuromarketing because of the growth of normative data (discussed in the next section) in neuromarketing research.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures The basic idea behind Bayesian inference is that you can update the expected probability (the likelihood, also called the posterior probability) that an outcome will occur by taking into account two pieces of information: ✓ A new observation, which in this case would be the result of an experiment ✓ The outcome’s prior probability, which is based on everything you knew before you conducted the experiment In other words, Bayesian inference is a technique for quantifying how much a new piece of information is worth, given everything you knew before. The applicability of Bayesian inference to neuromarketing, normative data, and business decision making is straightforward as an idea, if challenging in practice. Neuromarketers are surrounded by prior knowledge. Some of it is locked away in academic studies, which may or may not be directly useful. But neuromarketers can build their own normative databases, using their own metrics and their own results, to create a foundation of prior knowledge against which new findings can be compared and assessed for business impact. Combining normative data from past findings (prior probabilities) with new data from new findings (new observations), neuromarketers can give marketers much more precise research results (expected probabilities) that can directly impact real business decision making.

Bayesian inference and decision making Here’s a simple example of how Bayesian inference can impact a decision. Suppose you’re trying to decide whether to take your umbrella to work today. Here’s your prior knowledge: The probability of rain in your city on any given day is 20 percent. Given this knowledge, you’re probably going to leave your umbrella at home. But now you make a new observation. You look out the window and see clouds in the sky. And you just happen to have some additional prior knowledge about clouds:

When it rains, clouds are in the sky 100 percent of the time. (Duh.) Overall, clouds appear in the sky in your city 30 percent of the time. So, should this new observation change your decision? Using a formula called Bayes’s rule, you can precisely calculate the expected probability of rain, given clouds in the sky. It is 66.6 percent. You’d better take your umbrella.

313

314

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Normative Data: Linking Findings to the Real World A neuromarketing firm’s investment in normative data is a good indicator of its overall maturity as a business and the degree to which it is committed to investing in the long-term quality of its research offerings. Normative data is data that compares a neuromarketing firm’s internal metrics to external measures of performance, like sales or revenues. It can be highly precise or very general. Normative data is important for a number of reasons: ✓ It provides a wider context of real-world performance within which results from individual studies can be compared and interpreted. ✓ It provides a basis for data exploration to identify new insights and associations that only become visible across multiple studies. ✓ It’s the only sure way to link a firm’s results to real-world behavioral outcomes, at both the individual consumer and overall market levels. ✓ It’s the chief mechanism by which metrics are refined and calibrated over time to improve their validity, reliability, and predictability.

Friends don’t let friends make marketing decisions without normative data There are two levels of normative data that are very distinct from each other. Sometimes neuromarketing vendors blur this distinction, so it’s important to have a clear understanding of which level is being described: ✓ Normalized (or standardized) data: Scores are normalized against existing data so they’re comparable. For example, an ad might be said to score in the “75th percentile” compared to 200 other ads. This is a kind of normative statement, but a weak one, because it doesn’t link the score to any associated behaviors or market performance outcomes. ✓ Normative data: Scores are linked to behaviors or levels of performance. For example, a “four-star” ad might be said to produce 20 percent greater sales, on average, than a “three-star” ad. This is a much stronger normative statement because it links the metric to a real-world outcome. True normative data provides a performance benchmark for estimating the business relevance of a finding or study. In the absence of normative data, results can appear detached and illusive. Decision makers can easily lose patience with metrics (and vendors) that don’t relate to real-world outcomes.

Chapter 19: Five Things You Need to Know about Neuromarketing Studies and Measures

Understanding how normative data puts study results in context Any neuromarketing firm that’s serious about normative data has a dedicated program, with dedicated staff, maintaining its cross-study data and working on internal studies to improve and expand its normative data assets. Most important, it will have a program in place to calibrate and improve its metrics based on its normative data. Management of normative data is a full-time job, and any company that’s doing it well will, in all likelihood, be more than happy to talk about it in excruciating detail.

Know what level of normative data your neuromarketing vendor offers. Find out how much time and effort it devotes to maintaining its normative database, how many cases its database contains, how often external performance data is refreshed, and how often it updates its metrics based on changes to the normative database. Be cautious about working with a partner that doesn’t have a serious normative data program.

315

316

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Chapter 20

A Pre-Flight Checklist for Successful Neuromarketing Studies In This Chapter ▶ Reviewing pitfalls that lead research studies astray ▶ Seeing how to avoid those pitfalls ▶ Working with research partners to get the results you’re looking for

N

ot all neuromarketing studies turn out well. Indeed, not all market research studies turn out well. Often, this sad outcome has nothing to do with the methods involved, but it can be traced to the age-old problem identified most memorably in the great Paul Newman movie Cool Hand Luke: a failure to communicate. Or, as expressed in the wisdom of computer programming: garbage in, garbage out. The best research intentions can be thwarted by poor communication and planning well before a study is even launched. In this chapter, we tell you how to avoid five pitfalls that can ruin your neuromarketing study. We address each of these pitfalls in the form of a question you need to answer before you launch a study. We call this a preflight checklist. Like a pilot preparing for a flight, you need to answer these questions before you take off, not after.

What Are Your Business Objectives for This Study? Here’s an ironic scenario that happens too often in neuromarketing: Marketers at some company become intrigued by the idea of studying their consumers’ brains, so they decide to do a pilot project. They pick a neuromarketing vendor and commission a project to “test a couple ads” or “see

318

Part V: Living with Neuromarketing: Practical and Ethical Considerations what people think about our new package design.” When the results come back, the previously intrigued marketers are puzzled because the study doesn’t seem to tell them much. There are lots of esoteric metrics and measures, but no critical business questions seem to be definitively answered. They aren’t sure how to explain the study to senior management. The marketers become disillusioned and conclude that neuromarketing isn’t for them. The neuromarketing firm goes home, and the company goes back to focus groups and surveys. What’s ironic about this scenario? A group of marketers with a healthy initial interest in neuromarketing end up losing interest because they tried to test the methodology without defining a business objective they cared about. Pilot projects like this are difficult for a neuromarketing firm to resist. After all, turning down a new client is tough. But a better approach is to encourage the client to find a real business objective to study with neuromarketing. If the client finds it difficult to identify and match up an objective with a neuromarketing approach, the vendor should suggest an educational session to give the client a better picture of what questions neuromarketing is best suited to address. If the client still can’t find a relevant business objective, it’s probably best to politely decline the engagement. Time and resources of both parties are better expended on a project more likely to yield repeat business.

For marketers and other potential neuromarketing clients, our recommendation is this: Don’t start your first project just to test neuromarketing — you’ll only be disappointed. If you’re curious about neuromarketing and you want to understand it better, invest in an educational session. Several reputable neuromarketing consultants provide training for just this purpose. Don’t pay for a full-blown research project until you have a real business problem to address — one that engages your team and your senior management — and then only select neuromarketing if it’s the right fit to help you solve that problem. Business objectives are important because they shape almost every decision that follows: what hypotheses to test, what specific tests to perform, what materials to test, what target audience to sample, and so on. In addition, senior management expects a meaningful business objective. Like every department in today’s corporations, marketing must justify its contribution to the company; it must be able to show its return on investment (ROI) for every initiative it undertakes. Marketing initiatives generally don’t get funded if they aren’t based on a sound business case supporting the required investment. This business case links the marketing initiative to the business and financial goals of the company, aligning the initiative with higher-level business purposes. If a research study is going to address questions that the company ultimately cares

Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies about, it needs to be embedded in an active marketing initiative with a wellunderstood business purpose. The business objective of the research project provides a strong connection to marketing strategy and broader business purposes. After that connection is made, it becomes much easier to define, design, execute, interpret, and communicate the study. Business objectives for successful neuromarketing studies usually begin with a key business purpose such as improving brand equity, defining new products, creating compelling advertising campaigns, or improving in-store or online presence. In other words, business objectives are closely tied to the application areas detailed in Chapters 9 through 14. If your study can show value in addressing one of these key business areas, it’s likely to make a meaningful contribution to your company’s research program and objectives. The more general the objective, the less useful it’s likely to be. “Testing some ads,” for example, is not a good objective. “Determining whether a new campaign is surpassing the emotional impact of the current campaign” is. “Testing the strength of brand associations” is not a good objective. “Establishing whether the new ad campaign effectively delivers on the top three brand attributes” is.

Here are some questions to help identify strong business objectives for your neuromarketing study:

✓ Under what marketing (or other department) initiative will this study be conducted? ✓ What are the business purposes supported by the marketing initiative? ✓ How, in broad strokes, can this study help its sponsoring initiative achieve those business purposes? ✓ What specific questions can this study answer that directly address the purposes of its sponsoring initiative? ✓ What are you confident you already know about this study and what else do you need to know? ✓ What are your expectations or preferences regarding the outcome?

What Hypothesis Are You Testing and What’s the Best Test to Use? It’s surprising how many neuromarketing studies get commissioned without having a clear hypothesis to test. The absence of a hypothesis is probably

319

320

Part V: Living with Neuromarketing: Practical and Ethical Considerations the number-one cause of client dissatisfaction with neuromarketing research. People can’t help but be disappointed when an expensive and time-consuming project results in vague findings that can’t be tied to any specific research question. But this is exactly what happens when you conduct a study just to see “what people are thinking.” Neuromarketing findings in the absence of a hypothesis may be interesting, but they don’t relate to business needs. They may not even be interesting. What should a marketing team do with the knowledge that an ad activates a certain amount of memory processing? Two key questions immediately follow: “Compared to what?” and “So what?” Only a clear hypothesis gives meaning to these important follow-up questions. The best way to start developing an interesting hypothesis is to look closely at the business objectives of the study. Hypotheses tend to emerge out of expectations driven by the business objectives. Let’s use an example to illustrate this situation. Suppose package designers in a food product company have developed two new package designs for a well-established grocery brand. Their business objective is to select which package design to use. They decide that they should test both design options to see which one performs better. They probably have expectations, based on their experience with package designs, about which design will outperform the other on some key neuromarketing metrics, such as novelty, processing fluency, emotional engagement, or brand association. This allows them to create their initial hypothesis: Design A will outperform design B on the specified performance metrics. But shouldn’t the new designs be tested against the existing packaging as well, given that any new design needs to perform better than the current one? This makes sense, because the business won’t want to incur the expense of a package upgrade if it doesn’t believe the upgrade will improve performance on the shelf. This generates a revised hypothesis: Design A will not only outperform design B, but also outperform the current package design. Now the design team realizes that testing the two new designs against each other and the current package still isn’t adequate to meet the business objectives. Once on the shelf, the new packages won’t compete with each other or with the current design. Whichever design gets chosen will have to compete for shoppers’ attention with the packages of competitive brands. So, a further revision is needed: Design A will attract attention on the shelf better than design B, better than the current design, and better than competing packages that will surround it on the shelf. In this example, admittedly a simplified one, you can see how a study design can be refined from a vague goal of “testing some new package designs” to a much more specific hypothesis. In a real-world example, this hypothesis would be refined even further. For instance, if the business objective of the

Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies new design was to revitalize the brand to attract a younger audience, the hypotheses would need to include that segmentation element. If the chief purpose of the new design was to refresh the brand’s image with current habitual buyers, then the hypothesis would be refined differently, to emphasize the need to maintain key design elements and aid recognition while avoiding any disruption of existing buying habits. When the hypothesis for a study has been selected, the next question to ask is whether you’ve identified the proper tests for evaluating the hypothesis. Your neuromarketing partner will play a major role in this task, because it usually comes to the project with a set of testing protocols it has developed for testing hypotheses like yours. But you still should ask probing questions at this point, because there are many variations in testing that may, in fact, be more or less appropriate for your specific needs. For example, what’s the right test for the third hypothesis, testing against competing packages? Should the alternative packages be tested in isolation, or in shelf layouts where all the competing packages are displayed together? Should you use a monadic testing design (each participant sees only one package design or shelf layout) or a sequential monadic design (each participant sees a sequence of packages or shelves, usually in a randomized order), or perhaps a forced-choice design (in which package alternatives are displayed together)? Can the test be effectively conducted with images on a computer screen in a lab, or do you need to test the alternatives in a real in-store environment?

Defining the right test to evaluate a particular hypothesis can drill down into very detailed issues quite quickly, but here are three high-level questions to get you started:

✓ What aspects of the consumer experience are most relevant to testing this hypothesis: responding to a marketing message, choosing in a shopping or other purchasing context, or consuming a product? ✓ What mental responses of the consumer are most relevant to the experience being tested: impressions, reactions, motivations, or learning? ✓ What attributes of the material being tested are most relevant: novelty, familiarity, emotional impact, processing fluency, goal activation, memorability, or some other attribute?

Are You Testing the Right Materials? When you’ve determined the hypotheses you want to test and the right tests to perform, the next challenge is making sure you have the right materials, or stimuli, for the test. Answering this question may seem like a no-brainer, but collecting and preparing the right materials for a neuromarketing study can

321

322

Part V: Living with Neuromarketing: Practical and Ethical Considerations involve some choices that may end up making or breaking the outcome of the study. First, if you’re using visual images or videos for your tests, a number of technical factors need to be considered. Because neuromarketing techniques can be very sensitive to the visual properties of stimuli, you must be careful about issues like image and video resolution, video aspect ratios, and even more esoteric topics like NTSC versus PAL video formats. Expect your neuromarketing partner to have standards for visual stimuli, but don’t be surprised if these standards prove harder to meet than you would expect. We’ve found, for example, that although marketing departments tend to have at their disposal high-resolution images and videos of their own products and ads, they don’t have comparable resolution stimuli for competing products or ads. Often, the first inclination is to “pull them off the Internet,” but these materials tend to be of lower quality than the professional-grade materials required. Comparing visual stimuli at different resolutions introduces serious potential distortions into a neuromarketing test. Recall that many nonconscious reactions derive from ease of processing, or processing fluency. If you compare a higher-resolution image to a lower-resolution image, the resulting difference in processing fluency may bias the results, especially if you’re using sensitive brain measurement technologies like electroencephalography (EEG) or functional magnetic resonance imaging (fMRI). Participants’ conscious minds may not register the difference, but their nonconscious responses may be affected by the different resolutions.

Here are some technical stimulus-quality issues to keep in mind:

✓ Visual materials being compared should be at the same level of resolution and quality. ✓ Marketing materials being compared should be at the same stage of development; that is, you shouldn’t test a production ad against a preproduction ad. ✓ When testing materials in a real-world environment, like a store or showroom, care must be taken to control the amount of background clutter and competing stimuli in the surrounding environment. ✓ Descriptive written materials should be at the same level of semantic complexity to control for differences in processing fluency of language. A second important aspect of testing the right materials is the question of balancing what varies between the stimuli being compared against what is controlled or held constant (not allowed to vary between stimuli). A good place to start is to be clear about whether your hypothesis requires you to test different elements within the same stimulus, like different fonts or product names on essentially the same ketchup bottle, or different overall stimuli,

Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies like different ketchup bottle shapes and designs. You would need to prepare very different materials to test these different hypotheses. One of the most common mistakes in neuromarketing studies is to fail to properly align hypotheses with testing materials. If the hypothesis focuses on the effect of altering a single element in a stimulus, for example, but the available stimuli include other differences as well, testers often make the erroneous assumption that those materials will be “good enough” for testing the hypothesis. But in fact, such materials are not good enough. Once the results are in, it will be impossible to tell if measured differences are attributable to the element of interest, or to some difference between the stimuli. This is exactly the kind of compromise that produces results that dissatisfy everyone. There is a third aspect of selecting materials for testing that should be mentioned. This relates to maximizing the inferential power of the test, or the amount of confidence you can have in the results. This topic is complex, so we only touch upon a few key points here — that different types of comparisons, using different materials, yield different levels of inferential power: ✓ The weakest level of inferential power is achieved when testing a single stimulus against a standardized measure (a measure that is scaled against a normative database or benchmark). ✓ Stronger inferential power is achieved when you compare two or more stimuli against each other and against a standardized measure. ✓ A higher level of inferential power is achieved when you compare a specific attribute across multiple stimuli in which other possible explanatory elements have been held constant (but the scope of this inference is limited to the attributes tested, so there is a trade-off here). ✓ It’s always preferable to include competitive stimuli (for example, competitors’ ads, if you’re testing ads) in any comparison when possible, because including competitors’ materials provides broader scope and greater business relevance, as well as greater inferential power.

Are You Sampling from the Right Population? The next point at which good neuromarketing studies too often go bad is in defining the sample to be tested. Your initial inclination may be to make the test as generalizable as possible by using a gen pop sample (a representative sample of the general population in your market). This is often the best solution when doing a survey study, because after the data is collected you can always use any question in the survey to create and compare subgroups,

323

324

Part V: Living with Neuromarketing: Practical and Ethical Considerations and you can plan to have enough respondents (survey participants) in your sample to make sure these subgroup comparisons are statistically meaningful. Unfortunately, this approach won’t work well for a neuromarketing experiment, which differs from a survey in one very important respect: In an experiment, you have to identify your relevant subgroups before you run the study; you can’t construct a new subgroup comparison after the data have been collected. So, whatever comparisons you want to make (based on the hypotheses you want to test) need to be built into the study design from the start, and the sampling has to reflect the comparisons chosen. Neuromarketing studies, especially those that use brain measurement techniques, can often be conducted with relatively small sample sizes, because there is less random noise to be “averaged out” of the brain measurements than in typical survey responses, and experimental controls are designed to further minimize random noise. But these small sample sizes are based on the assumption that the group being measured is homogeneous, which is to say, it won’t be further subdivided later on in the analysis of the results. If you want to compare two groups, you have to specify them as part of your design, and you have to double the sample size to accommodate the comparison. This is why it’s important to plan your sampling carefully. If your target market consists of 18- to-34-year-old males, and you want to compare their responses to two ads, sample only from 18- to 34-year-old males. If your business objective is to attract more 18- to 34-year-old females to your product, and you want to see how their responses to your ads compare to men’s, sample from that group as well, but you’ll need to double your sample size.

Here are some subgroup comparisons that can yield interesting and relevant insights in neuromarketing studies. In planning your sampling criteria, consider whether any of these distinctions should be built into your study:

✓ Men versus women: Gender comparisons often reveal interesting differences, especially in nonconscious responses, that can be leveraged in marketing. ✓ Younger versus older: Cognitive differences in developing, mature, and aging brains can result in different responses to marketing. ✓ Brand loyalists versus brand agnostics: Understanding how loyalists and agnostics differ in responses to marketing can help if the business objective is to increase loyalty. ✓ Current consumers versus lapsed consumers: Lapsed consumers may provide clues in their nonconscious responses to how they can be lured back into the fold.

Chapter 20: A Pre-Flight Checklist for Successful Neuromarketing Studies ✓ Consumers from different regions or geographies: Regional differences can often be critical in responses to marketing. ✓ Consumers at different stages of involvement: From first-time buyers to habitual users to dedicated advocates, comparing consumers at different stages of involvement can yield interesting and useful insights. In neuromarketing studies, defining your sample as precisely as possible before the study is conducted is ideal. This is often counterintuitive to marketers who are used to working with surveys that achieve greater generalizability with larger sample sizes. Experiments require more planning ahead and are less flexible for discovering interesting differences after the fact. This is another reason why strong hypotheses are so important to successful neuromarketing studies. Having only an undifferentiated gen pop sample, combined with a vague business objective and no hypothesis, is likely to produce hazy results with little decision-making value.

How Will Your Results Change Your Business Actions? In his book The Power of Intuition, decision-making expert Gary Klein recommends an exercise he called a pre-mortem. He suggests that every time executives are ready to make a strategic decision, they sit down and imagine a future point in time in which the decision they’re about to make has turned out to be a total failure. Then they should ask themselves how this failure could’ve happened, and what they’ll do next. The power of the exercise is that it helps overcome the powerful bias that decision makers have to believe their decisions will be a success. We suggest a similar exercise for marketing teams preparing a new research study: Sit down and ask what next steps you’ll take based on the results of this study. If your hypothesis is confirmed, what will you do? If it isn’t confirmed, what will you do differently? An honest appraisal of the likely effects of the study you’re designing is an excellent way to counter your natural optimism bias and see whether you’re embarking on a project that will have real business impact or just be another fun exercise in the research sandbox. To be fair, not every study will produce earth-shattering business implications. And most companies won’t make major business decisions based on any single study, especially a single study that uses neuromarketing techniques for the first time. So, perhaps what you’ll do with the results of this study is compare them with other results you’ve gotten from other research, using other approaches. That’s a perfectly acceptable conclusion as well.

325

326

Part V: Living with Neuromarketing: Practical and Ethical Considerations It means you’ll want to review what you’ve learned from those earlier studies, and make sure the current study produces results that are directly comparable. In this case, it’s the larger research program, not any single study, that carries the burden of business impact. The only outcome you need to worry about in this exercise is the one in which you fail to identify any meaningful business implications resulting from your study. If that’s the result, you need to revisit all the previous questions about business objectives, hypotheses, tests, materials, and sample definitions, and ask whether you’ve missed something important. If you still can’t find any business actions that will be impacted by this study, then you have to face the very real possibility that this study isn’t worth doing.

Don’t Pay the Price of a Failure to Communicate Working through this pre-flight checklist should help you avoid some of the most dangerous pitfalls along the route to a successful neuromarketing study. Although nothing is guaranteed in the cruel world of market research, we’re confident that having clear business objectives, precise hypotheses, the right tests, the right materials, the right sample, and clear business consequences will give your study a much higher likelihood of success than if any of these elements is missing. Completing the pre-flight checklist prior to launching a study is something you should do together with a neuromarketing partner. An experienced partner will be intimately familiar with each of these questions, will recognize their importance, and will be willing to invest the time and effort to help you answer them to your satisfaction. If a potential partner tells you it’s more important to “just get something done” than to spend time answering these questions, that’s a good indication that you may not be working with the right neuromarketing partner — which just happens to be the topic of the next chapter: how to pick the right neuromarketing partner.

Chapter 21

Picking the Right Neuromarketing Partner In This Chapter ▶ Knowing when to seek the help of a neuromarketing partner ▶ Understanding the difference between neuromarketing vendors and consultants ▶ Exploring the pros and cons of neuromarketing specialists and generalists ▶ Asking the right questions to pick the best partner for your research needs

W

e cover several neuromarketing approaches in Chapter 17 that you may want to tackle on your own, but for the most part, neuromarketing studies are not do-it-yourself projects. In this chapter, we provide guidelines and checklists for selecting and working with a neuromarketing partner. We assume not only that you’re considering a first neuromarketing project, but also that you’re considering whether this project may scale up into a longer-term commitment to include neuromarketing as a regular part of your overall market research strategy. We focus on three questions: ✓ When should you consider hiring a neuromarketing partner? ✓ What type of partner do you need? ✓ How do you choose the best partner to match your needs? Picking any market research partner is an important decision that directly impacts the quality and effectiveness of your marketing and advertising. It’s a strategic decision that needs to produce a measurable return on investment (ROI). Because neuromarketing is so new and different compared to traditional market research, there is an extra obligation in this field to share information and knowledge openly. This may involve some extra education on your part, which you’ve begun by reading this book, but more important, it requires that you identify a neuromarketing partner (or partners) with the capacity and commitment to help you learn and derive real value from this new approach to market research. The purpose of this chapter is to give you the best chance to achieve that goal.

328

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Knowing What You Need from a Neuromarketing Partner To get started looking for a neuromarketing partner, we recommend that you ask yourself and your marketing team some preliminary questions. Our first checklist is a set of self-evaluation questions to help you pinpoint your organization’s readiness to consider neuromarketing research solutions, and the scale of support you’ll need from a neuromarketing partner to achieve your immediate and longer-term research objectives. The importance of organizational readiness cannot be underestimated, although it usually is. The findings from brain science about resistance to novelty (see Chapter 5) apply as much to you and your organization as they do to your consumers. All human beings are curious about novelty, but we resist it. To lower resistance, we must learn more. Only as we learn more, can we pass from resistance to the comfort of familiarity. Bringing neuromarketing into your organization will generate resistance. It’s inevitable. If your organization isn’t ready to overcome that resistance, your experiment with neuromarketing won’t succeed. There is a simple way to determine whether your organization is ready. It involves using a classic tool from organizational change consulting called the fundamental equation of successful change: pain × vision × first steps > resistance If the combination of pain, vision, and first steps is not great enough to overcome resistance, your change effort will fail. Note that the relationship between pain, vision, and first steps is multiplicative — if any of them is absent, the left side of the equation becomes zero, which will always be less than the right side of the equation, because resistance is always greater than zero. Let’s translate this equation into a set of questions about your organization’s readiness to think seriously about neuromarketing. The following questions help you gauge how much leadership you’ll require from your neuromarketing partner, and what areas of expertise are important to you. These questions get at the issue of pain: ✓ Are you dissatisfied with your current research approaches? ✓ If so, how have your current approaches failed to live up to your expectations? Have they materially hurt you (caused you to make a moneylosing business decision) or have they just not helped you (failed to produce useful or actionable insights)?

Chapter 21: Picking the Right Neuromarketing Partner ✓ Where in your research portfolio is your dissatisfaction greatest? Rate your level of dissatisfaction in each marketing area: branding, product innovation, product design, packaging, advertising, in-store marketing, online experience, entertainment media. If you have no complaints about your current research approaches, don’t waste your time trying to bring in neuromarketing. You don’t need it. On the other hand, if you’re less than completely satisfied with business as usual, you need to understand both the level and focus of pain in the marketing organization, whether it’s moderate (lack of fresh insights) or severe (recent publicly humiliating packaging disaster), and where in the organization it’s most acute. The following questions relate to the issue of vision: ✓ Why do you care about the intuitive side of your consumers? ✓ How do you believe nonconscious thinking, emotions, and System 1 decision making are relevant to your relationship with your consumers? ✓ Does your senior management have an understanding of, or better yet, a commitment to the intuitive consumer model of consumer behavior? If your organization doesn’t already have thoughtful answers to the first two questions, your level of vision is low, and your neuromarketing partner will have to help you build it up, preferably before launching a pilot project. If your senior management is following, rather than leading, on embracing a vision of your customers as intuitive consumers, that’s an issue you may need to take up with your neuromarketing partner as well. Answering these questions helps you gauge whether you should be looking for a neuromarketing partner who can help you develop your vision for neuromarketing and refine your expectations for what you want to learn about your consumers, or whether you simply need a partner who can help you implement a project for which you’ll provide the thought leadership. The following questions address the issue of first steps: ✓ Do you need an additional investment in education before proceeding with a pilot project? ✓ Can you identify which first project is most likely to provide maximum value for your organization? ✓ How prepared are you to fill out your pre-flight checklist (see Chapter 20) for this project?

329

330

Part V: Living with Neuromarketing: Practical and Ethical Considerations The question about additional education is an important one. We’ve seen too many neuromarketing studies end in disappointment because the clients didn’t have an adequate grounding in neuromarketing principles, so they didn’t know what to expect. When you combine the possibility of misunderstanding with the inevitability of resistance, you get a significant potential for failure. Answering these questions helps you determine what you need to do next to move your project forward, and helps you further refine your needs regarding a neuromarketing partner. Here’s a hint: If you aren’t sure how to answer the second two questions, your answer to the first question is “Yes.” Resistance can be thought of as a constant. Your organization will always provide some amount of resistance to any new idea. Rather than estimate it directly, just look at how your organization scores on pain, vision, and first steps. If any of those ingredients is missing, you need to shore them up before diving in to your first neuromarketing project. In addition, before beginning your evaluation of potential neuromarketing partners, you need to ask yourself some questions about the scale of support your organization will require in the longer-term. These issues go beyond your requirements for a pilot project and are meant to get you thinking about whether a neuromarketing partner can scale with you as your needs grow over time. ✓ What volume of neuromarketing testing would you require if you adopted it across all your marketing and advertising needs? ✓ How geographically dispersed is your business, and in what regions would you require your neuromarketing partner to operate? What range of languages and cultures does your business touch? ✓ What market research partners do you work with today? Do they provide neuromarketing services, and can they integrate neuromarketing results with other data they provide for you? Neuromarketing is still a relatively small field, and vendors vary in their throughput capacity and global reach. By first estimating how big your needs could get, you’re better prepared to evaluate how big your neuromarketing partner(s) will need to be to support those requirements.

The question about your current market research relationships is worth a brief comment. Most large research providers either have invested in neuromarketing themselves or have established working relationships with neuromarketing vendors. You need to know what these relationships are and how you can leverage them to your advantage.

Chapter 21: Picking the Right Neuromarketing Partner

As we discuss in Chapter 18, your investment in neuromarketing will ultimately be optimized only if you can effectively integrate the data you generate through neuromarketing with other data you’re collecting through other means. Most important, this includes all your sales and marketing data on point-of-sale performance, media spend, trade and consumer promotions, online and social media activity, and so on. To integrate these mountains of data with the results of neuromarketing experiments and interventions is a massive task that will be greatly aided if you can take advantage of existing relationships between your neuromarketing and traditional research vendors. With answers to these questions in hand, you’ve got a good sense of both the immediate needs (in terms of organizational readiness) and the longer-term requirements (in terms of scale and reach) that your neuromarketing partner needs to support.

Looking At Your Options When considering your options for engaging a neuromarketing partner, you first need to consider what kind of partner would be the best fit. There are two possibilities: ✓ Neuromarketing vendors: Firms that specialize in performing neuromarketing studies. Vendors usually take responsibility for the full execution of a project — designing the project, recruiting the participants, collecting and analyzing the data, and reporting the results. They employ their own delivery teams, usually specialize in one or a small subset of technologies, and use their own methodologies, equipment, and facilities to do the project for you. Vendors tend to be technology specialists and advocates for their chosen approach. ✓ Neuromarketing consultants: Individuals or firms that act as advisors, interpreters, or intermediaries between you and neuromarketing vendors. Consultants don’t conduct neuromarketing research directly, but they may provide a variety of support services such as education and training, advice on selecting a neuromarketing vendor, oversight of neuromarketing projects, and integration or interpretation of results from multi-vendor projects. Consultants tend to be technology generalists, less committed to one technology, and more willing to consider different approaches and mixed approaches to solving your specific research problems. Vendors provide you with a complete package based on their professional assessment of the match between your needs and their capabilities. Individual engagements with vendors have a fixed start and a fixed end. When the

331

332

Part V: Living with Neuromarketing: Practical and Ethical Considerations project is done, your deliverable is usually a written document that reports the data analysis results, interpretations and conclusions, and recommendations. Consultants provide a more varied set of services based on a mutual determination of your research needs. You may engage them for a single project, or for longer-term ongoing advice or program management. They can also be brought in for short-term assignments, like presenting an educational session, helping evaluate vendors or technologies, or providing a second opinion on a study’s results. Sometimes, just to make things a little more complicated, neuromarketing vendors have their own consultants on staff and offer consulting as part of their services. Vendors that strive to be more of a strategic research partner often have a consulting group that performs many of the services we’ve described. These consultants are, of course, selling their vendor’s solutions, so they aren’t completely impartial, but they’re often experienced generalists who have a broad perspective and a lot of expertise to share. Other neuromarketing vendors are more transactional service providers and focus on outputting a standard product with few frills. In other words, some neuromarketing vendors are more like Nordstrom, and others are more like Costco. Whether a neuromarketing vendor or consultant is the right choice for you depends critically on your organizational readiness and your long-term ambitions. There are four basic directions to take: ✓ If your organization is well-grounded in neuromarketing concepts and principles, your level of dissatisfaction with traditional approaches is high, and you have a clear and specific idea about what you want to accomplish with neuromarketing, you should find a vendor whose technology orientation matches your own preferences, and go for it. ✓ If your organization does not have a good understanding of the scientific foundations of neuromarketing, the intuitive consumer model, or the potential benefits of neuromarketing, you should consider working with a consultant to improve your organizational readiness before launching your first study. ✓ If your organization is at the cutting edge of market research and you have the budget and the ambition to use research for competitive advantage, then you should consider enlisting both consultants and vendors in your quest for ongoing leadership in your industry. ✓ If you’re perfectly happy with your current market research outputs and guidance, you really shouldn’t be playing around with neuromarketing, at least for now. In the following sections, we look at these options in a bit more detail.

Chapter 21: Picking the Right Neuromarketing Partner

When to enlist a neuromarketing vendor Here are five indicators that selecting a neuromarketing vendor is the right decision for you: ✓ You judge your organizational readiness for neuromarketing to be high. ✓ You have prior experience with the type of study you’re commissioning. ✓ The study is well defined in terms of objectives, hypotheses, materials, target population, and action implications. ✓ The study involves a single application area (like packaging) rather than a more complex design (first measure brand associations; then measure which associations are strongest with different packages). ✓ You have an established relationship with a vendor who understands your marketing needs, has earned your trust, and has given you good advice and results in the past. Neuromarketing vendors tend to be strong advocates for their own methods and technology specializations. As we emphasize in Chapters 16 and 17, every technology has its pros and cons, and you need to get vendors to focus on how they can improve your business outcomes rather than how they fare in abstract technology debates. The competitive advantage of a vendor who specializes in electroencephalography (EEG), for example, is going to be a function of its capacity to produce consistent, high-quality, and business-relevant results in a timely manner, not the fact that EEG provides “high temporal resolution” and functional magnetic resonance imaging (fMRI) does not.

When to enlist a neuromarketing consultant Here are five indicators that working with a neuromarketing consultant may be the right decision for you: ✓ You judge that you need to improve your organizational readiness before embarking on a neuromarketing pilot project. ✓ You don’t have prior experience with the type of study you’re commissioning, and you want third-party advice on how best to proceed. ✓ You have unresolved questions about the objectives, details, or business implications of a study you’re considering.

333

334

Part V: Living with Neuromarketing: Practical and Ethical Considerations ✓ You want to put together a study or multi-study program that may require integrating multiple technologies or vendors. ✓ You don’t have an established relationship with a neuromarketing vendor, and you want advice on how to select the right vendor to support your needs.

It may be even more important to carefully scrutinize the qualifications of a neuromarketing consultant than a neuromarketing vendor. After all, anyone with a Rolex and a fancy suit can call himself a consultant. What you need to look for in a neuromarketing consultant is expertise in four areas:

✓ Methodologies and technologies: A sound understanding of statistics and a broad range of research methodologies available from neuromarketing vendors. ✓ Vendors and industry: Extensive industry experience and in-depth knowledge of the relative strengths and weaknesses of various neuromarketing vendors, gained from working with them or for them on multiple projects. ✓ Brain science: Up-to-date knowledge of the latest advances in brain science, and a point of view on which leading-edge methodologies have the greatest potential for applications in marketing. ✓ Marketing: A solid understanding of marketing issues and challenges, so the consultant can relate to the needs of marketers and effectively translate science and technology issues into the language of business. There is one type of neuromarketing study that consultants do perform on a regular basis: desk research. This is an assessment of a marketing challenge using neuromarketing concepts and insights — often called best practices — that are available in the public domain or derived from the consultant’s personal experience. Sometimes the insights provided by desk research are sufficient to answer the question at hand without the need to collect new data in a full neuromarketing study, saving both time and money.

Neuromarketing Orientations and Specializations When pondering the selection of a neuromarketing partner, there is one more distinction you need to consider: Do you need a technology specialist or an integrated-solution generalist? Put in simple terms: Do you need a partner who knows how to do one thing really well, or do you need a partner who

Chapter 21: Picking the Right Neuromarketing Partner knows how to do a lot of things, but probably none of them as well as a dedicated specialist? In this section, we look at each of these orientations.

Technology specialists A neuromarketing technology specialist has developed expertise in one technology area (or a small number of related areas) and bases its product and service offerings on the use of that technology to answer market research questions. We covered a number of technologies in Chapters 16 and 17. Here’s how they tend to cluster in technology specialist firms: ✓ fMRI specialists: fMRI is the most technologically advanced specialization in neuromarketing. Conducting an fMRI test is basically a medical procedure and requires the use of highly trained and certified staff. Most fMRI firms are led by medical doctors and world-class researchers at major universities. They seldom advocate or employ any other techniques. ✓ EEG specialists: EEG data collection is much less difficult than fMRI data collection, but the data processing and analytic procedures used by EEG firms can be quite advanced, requiring PhD-level experience in signal processing and statistics to translate raw brain-wave signals into meaningful metrics. EEG firms often employ eye tracking and some biometrics in addition to EEG data collection, but their value proposition is usually focused predominantly on their expertise in EEG technology. ✓ Biometrics specialists: These vendors specialize in peripheral nervous system measures rather than brain measures. They often combine autonomic and somatic nervous system measures such as electrodermal activity, heart rate, facial muscle movement (electromyography [EMG]), eye tracking, and body movements. A separate tradition focuses more exclusively on expert and automated facial expression analysis. Leaders of biometrics companies are usually PhD psychologists (and some MDs), often with specializations in the measurement of human emotions. ✓ Behavioral economics specialists: Firms specializing in behavioral economics are relatively new to neuromarketing. They draw on psychology and economics, and usually offer solutions using behavioral experiments to study marketing issues. Unlike other specialists who tend to focus on internal sources of consumer behavior, these firms focus on understanding and manipulating the external context or situation in order to impact marketing outcomes. They also focus more on choice than more internally focused vendors. ✓ Eye-tracking specialists: Several firms focus on eye tracking exclusively, either by providing in-lab studies or by offering eye-tracking analytics over the Internet. Eye-tracking firms benefit from relatively standardized metrics (compared to other specializations) and a deep body of supporting

335

336

Part V: Living with Neuromarketing: Practical and Ethical Considerations research. Eye tracking is more commoditized, with firms competing less on unique expertise, and more on price, turnaround time, and marginal technical advantages. ✓ Online services specialists: As described in Chapter 17, a number of firms have begun offering online research services that leverage the scale and reach of the Internet to test large numbers of people over short periods of time at very reasonable prices. One specialized application that is becoming popular as an online service is automated facial expression analysis, operating through a standard computer webcam. Other emerging applications use behavioral response-time approaches — like the Implicit Association Test (IAT) and semantic- and affective-priming models described in Chapter 17 — to draw conclusions about the internal mental processes and memory associations of consumers. Services offered by these technology specialists vary considerably in terms of the complexity of the underlying science, their normal turnaround times, and their average cost. Although individual results may differ, Table 21-1 gives a general indication of how these technology specialists compare on these three dimensions. As is clear from Table 21-1, neuromarketing specializations fall into a rough hierarchy of complexity. Generally, the deeper the scientific expertise underlying the focus of specialization, the more constrained the data collection environment, the greater preparation required (such as applying sensors), the longer the turnaround time, and the higher the cost. Although these factors should play a role in your decision making, they need to be assessed in light of the business objectives you want to achieve from your study. The best approach is to find the right balance between convenience and cost on the one hand, and business value on the other.

Table 21-1

Comparing Technology Specialists on Complexity, Turnaround, and Cost

Specialization

Complexity

Turnaround Time

Cost per Participant

fMRI

Very high

Slow

Highest

EEG

High

Moderate

High

Biometrics

Moderate

Moderate to fast

Moderate

Behavioral economics

Varies; generally low (no sensors)

Moderate to fast

Moderate

Eye tracking

Low

Fast

Low

Online services

Low

Fast

Low

Chapter 21: Picking the Right Neuromarketing Partner

Integrated solution generalists Some neuromarketing firms and consultants are more generalists than specialists. They tend to have extensive experience in complex study designs and know how to combine multiple specializations and research approaches to answer particularly challenging research questions. You should consider using integrated solution generalists when you want to test a complex marketing initiative or when you want to compare alternative research perspectives across multiple aspects of your overall marketing, shopping, and product research efforts. We introduced the idea of an integrated research program in Chapter 18. The concept involves developing and implementing a multi-method testing environment that encompasses all three stages of the consumer cycle of experience with your brands and products, which consists of three stages of interaction and behavior: ✓ Marketing: Measuring the impact of your marketing messages on brand and product attitudes and associations ✓ Shopping: Measuring how responses to marketing impact consumer behavior in the shopping context of search, choice, and buying ✓ Consuming: Measuring how purchased products are consumed, and how consumption impacts beliefs, attitudes, and expectations, which then become inputs into consumers’ responses to marketing Building an integrated research program to track consumer responses across these three stages is a significant challenge for market research. Integrated solution specialists are developing the expertise and breadth of experience to help with this challenge. As discussed in Chapter 18, methods that can be brought together in an integrated research program under the direction of an integrated solutions specialist include ✓ Observational studies: Ethnographic and anthropological studies of consumers in their natural habitats ✓ Lab-based studies: Biometrics, neurometrics, simulations ✓ Online research: Response-time studies, discrete choice testing, webcambased implicit response studies, social media content analysis ✓ In-store, point-of-sale research: Buying behavior, in-store behavioral experiments, signage and display testing, shelf-display studies, traffic pattern studies ✓ Performance and return-on-investment (ROI) studies: Market mix modeling, matched sample media testing using consumer panel data

337

338

Part V: Living with Neuromarketing: Practical and Ethical Considerations Some of these testing areas fall exclusively under neuromarketing, some fall under traditional market research, and some include a mixture of techniques. Integrated solution generalists have the breadth of perspective to see them all as complementary parts of a larger research enterprise.

Questions to Ask a Prospective Neuromarketing Partner In this section, we provide a checklist of questions to ask a prospective neuromarketing partner. This checklist assumes that you’ve already completed an organizational readiness and scale of support self-assessment as described earlier in this chapter. You’ve narrowed your options to a subset of neuromarketing vendors or consultants, either specialists or generalists. Now your task is to “cull the herd” and select the best partner to match your needs. This involves three steps:

1. Screen out potential partners who do not meet basic criteria.



2. Create a short list of potential partners with the competencies and experience you’re seeking.



3. Select one partner you feel best matches your needs and is most compatible with your working style.

Culling the herd The first set of questions are those you would ask any research partner, whether a traditional research firm or a neuromarketer. These questions help you to eliminate potential partners who don’t meet your basic requirements. There are four types of questions you should consider: ✓ Financial stability: You may not want to assume the risk of working with a firm that doesn’t have a sound financial foundation. Such firms may perform erratically, or may even disappear in the middle of a project. On the other hand, if you’re an early adopter who is willing to assume these risks, this will be less of an issue for you. We suggest two due diligence tasks to assess financial stability:

• Check out trade references. Many banks or credit holders will provide references on how companies pay their bills, which is a good proxy for how they handle their finances more generally.

Chapter 21: Picking the Right Neuromarketing Partner

• Ask for the financial statements. You can easily find this information yourself if you’re dealing with a public company, but if the firm is private, you may want to ask for copies of its audited financial statements. Reputable firms will share at least summary financial statements.

✓ Experience: For both the firm and the employees who would be working with you, ask for examples of prior work, years in business, and research experience. For technology specialists, ask for specific evidence of competence in the technology area, including backgrounds of the company’s key scientists and leaders. Be sure to ask which employees will be working with you, and confirm their experience and levels of expertise. The quality of the individuals you’ll be working with, not the credentials of the firm as a whole, will have the biggest impact on the success of your project. ✓ Certifications: You may want to exclude vendors who aren’t members of relevant professional associations or who haven’t subscribed to industry codes of ethics (such as those of the Advertising Research Foundation [ARF] or Neuromarketing Science & Business Association [NMSBA]). This is simply a safeguard and encourages vendors to participate in the emerging standardization of the neuromarketing industry. ✓ Capacity: You should establish early on whether a vendor is planning to carry out your project independently or whether it plans on using subcontractors for parts of the project. Subcontracting may be fine for operational parts of the project, such as participant recruitment, but if the firm is outsourcing key elements of the project, such as data collection, that may be a red flag. Also, you need to ask each prospective partner about its capacity to meet your scale of support requirements, as determined by your organizational self-assessment. Use these questions to decide which potential partners make it to your short list. When your short list is established, prepare a second round of inquiry to select a winning partner from the set of basically qualified candidates.

Selecting the winner In this phase of the process, you’re interested in more intangible qualities like stylistic compatibility, scientific transparency, depth of relevant experience, and attitude toward confidentiality. We recommend drilling down into four areas: working style, directly relevant experience, scientific openness, and confidentiality and regulatory compliance.

339

340

Part V: Living with Neuromarketing: Practical and Ethical Considerations

As a supplement to this checklist for evaluating prospective neuromarketing partners, we recommend the excellent guideline from the market research trade association ESOMAR, “36 Questions to Help Commission Neuroscience Research,” available at www.esomar.org/uploads/public/knowledgeand-standards/codes-and-guidelines/ESOMAR_36-Questions-tohelp-commission-neuroscience-research.pdf.

Working style What you want to learn here is how compatible the prospective partner’s working style is with yours. Whether you want to have a close collaboration or you just want the partner to go off and do the work, you need to find out if the partner views the work the same way you do. Here are some key questions to ask: ✓ Will company principals be working on my project? If so, who? If not, what kind of involvement will they have? ✓ Who on your team is ultimately responsible for the success of my project? How and when can I reach them? ✓ Will you provide a detailed work plan and schedule of the project? What level of collaboration will you want from my team, when, from whom, and for how long? ✓ If I don’t understand what you’re doing or how you’re doing it, how do I get answers?

Directly relevant experience This is not so much general experience, which should have been assessed in the first round of questions, but rather specific experience conducting studies like yours. You need to know if the prospective partner has done this many times before, or is essentially learning on the job. Ask the following: ✓ How often have you done projects like this one before? ✓ What expertise do you bring to this project that your competitors can’t match? ✓ How much experience does each of your team members have with this kind of project? Which team member would you consider to be the thought leader for my project? ✓ Can I speak directly with any reference customers for whom your company has conducted studies similar to this one?

Scientific openness The more complex and sophisticated the methods used by your neuromarketing partner, the more help you’re going to need understanding exactly

Chapter 21: Picking the Right Neuromarketing Partner what it’s doing and how it’s doing it. Some vendors are quite open about their techniques; others prefer to maintain a sense of mystery around their proprietary methods. You need to determine which approach works for you. Here are some questions you’ll want to ask: ✓ How do I know your methods are scientifically sound? ✓ Can you show me how your techniques are related to established scientific literature and findings? ✓ Can I speak with any academic (non-commercial) references, not affiliated with your company, who can vouch for your methods and techniques? ✓ What aspects of your approach and methodology can you not share with me because they’re proprietary or company secrets?

Confidentiality and regulatory compliance Maintaining standards of confidentiality for participants in your study is critical for ensuring compliance with human subjects research principles (see Chapter 22 for more details). In addition, you want to be sure that your prospective partner understands and will respect your requirements for project confidentiality. Here are some questions to ask: ✓ Are your experimental techniques approved by an institutional (or independent) review board (IRB) for proper treatment of human subjects? ✓ How will you maintain the confidentiality of my project participants? ✓ How will you maintain the confidentiality of my results? ✓ What other clients have you worked with on similar projects and how happy were they with the results? (This is a trick question. If the vendor talks openly about other clients with you, they’ll probably talk openly about you with other clients.)

341

342

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Chapter 22

Neuromarketing Ethics, Standards, and Public Policy Implications In This Chapter ▶ Making sure neuromarketing is done ethically ▶ Seeing how the neuromarketing industry is developing standards and practices ▶ Understanding some important legal questions about neuromarketing ▶ Considering the idea that neuromarketing may actually be good for you

I

n this chapter, we look at some important topics that surround neuromarketing — rules and principles for ethical conduct, standards and practices for transparency and acceptance, and legal and public policy implications for future directions. Neuromarketing is a young field that’s just beginning to emerge from what we call its “Wild West” period. During those early days, there was a lot of hype and hokum on display, coming both from some early practitioners and some overzealous commentators. This is not unusual for a new field, but it has left some bruises that haven’t completely healed. Today, the field is maturing and beginning to develop many of the trappings of an established research community, such as dedicated “tracks” in mainstream research conferences, its own dedicated industry groups, the development of standards and guidelines, the appearance of more peer-reviewed research, and a slow but steady absorption of neuromarketing methods into the research offerings of large, mainstream research providers. We begin with a look at ethical practices for neuromarketing in three key areas: protecting research participants, representing neuromarketing to the media, and providing evidence of validity to potential buyers. Then we examine progress in the development of industry standards and accreditation of neuromarketing vendors. Next, we cover some legal questions relating to the regulation of neuromarketing. We end with an overview of three public policy areas where we believe neuromarketing can play a positive role: public service advertising, public policy design, and education.

344

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Doing Neuromarketing Ethically We don’t mention a lot of articles in this book, but one we have to reference here is “Neuroethics of Neuromarketing,” by Emily R. Murphy, Judy Illes, and Peter B. Reiner, three neuro-ethicists associated with the National Core for Neuroethics at the University of British Columbia and the Stanford Law School, published in the Journal of Consumer Behaviour in 2008. This article was one of the first publications to lay out ethical guidelines for neuromarketing, and it has become something of a touchstone in the field. Murphy, Illes, and Reiner propose a preliminary code of ethics for neuromarketers that we summarize in this section under three general topics: protecting the rights of participants, talking responsibly to the media, and being honest with clients and customers.

Protecting the rights of research participants “Neuroethics of Neuromarketing” identifies three aspects of protecting the rights of research participants: ✓ Protection of research subjects: Many research subject protections are mandated by law in most nations, but only for government-sponsored research. In the United States, policies for federally funded human subjects research are specified by the Department of Health and Human Services. These policies require that all research involving human subjects be conducted under the approval of an institutional (or independent) review board (IRB). Policies the IRB must approve (and re-approve annually) include

• Procedures for acquiring informed consent of participants



• Provisions for ensuring subject information confidentiality



• Explicit protocols for dealing with incidental findings (medical conditions discovered in a subject as a byproduct of data collection) Although federally funded scientists working in academic, government, or commercial settings have a legal responsibility to obtain informed consent and protect the privacy of their human research subjects, these legal requirements may not apply to private neuromarketing firms that do not employ federally funded staff or engage in federally funded research. In such cases, we believe the neuromarketing firm still has an ethical obligation to offer equivalent levels of protection. The best way

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications to do this is to acquire IRB approval for research procedures and data protection policies (many IRBs can be commissioned to provide the appropriate level of review for commercial, for-profit research entities). IRB requirements are very detailed, and submissions can run to hundreds of pages of documentation. However, this should be considered a cost of doing business by neuromarketing vendors. Failure to have IRB approval is a sign that a neuromarketing firm may not be serious about its commitment to the highest research standards and ethics. Additional subject protection considerations include making sure that competition for participants doesn’t cause financial incentives to get so high that they become a form of indirect coercion. Also, as part of informed consent, subjects must be advised and reminded of their right to withdraw from any study for any reason, including even minor discomfort. Although most technologies used by neuromarketing have minimal risk, these risks need to be spelled out in detail before informed consent is requested. ✓ Protection of vulnerable niche populations from marketing exploitation: Policies for research subjects’ protection should include additional ethics review and safeguards for research done on protected or potentially vulnerable subject populations. In addition, neuromarketing-influenced advertising targeted at specific protected consumer groups should aim to positively serve the special needs of the population without marginalizing, maligning, or otherwise causing harm, whether psychosocial or financial in nature. Protected and vulnerable subject populations include people like children, pregnant women, mothers of young children, students, and people with mental or physical illnesses. This is a difficult guideline to implement because neuromarketing does not control marketing, a point introduced in Chapter 1. In addition, defining what constitutes “harm” is not as easy as it may seem. For these reasons and others, many neuromarketing firms have adopted the policy to refuse to do research with children at all, to avoid any possibility or perception of exploitation. Policies with regard to other groups are less clear. ✓ Full disclosure of goals, risks, and benefits: Disclosure can be achieved through the publication of a vendor’s ethics principles regarding protecting the privacy and rights of human subjects and consumers. Several neuromarketing vendors publish statements of ethics principles on their websites. More important, industry associations have begun to craft general principles for neuromarketing research to which members must subscribe, similar to published ethics principles addressing other forms of research. Among these efforts, three are worth noting by name:

345

346

Part V: Living with Neuromarketing: Practical and Ethical Considerations ✓ The Advertising Research Foundation (ARF; www.thearf.org) is developing a set of “NeuroStandards” for ethical and scientifically sound use of neuromarketing in advertising research. ✓ The ESOMAR (www.esomar.org) has published a guideline for members called “36 Questions to Help Commission Neuroscience Research,” which includes questions about ethics policies and principles. ✓ The Neuromarketing Science & Business Association (NMSBA; www. neuromarketing-association.com), the first global industry group devoted exclusively to neuromarketing, has published a “Code of Ethics for the Application of Neuroscience in Business” that covers topics such as transparency, consent, and privacy.

Representing research accurately in media and marketing This has been an area of some controversy in the neuromarketing field, although the situation has gotten much better as the industry has emerged from its “Wild West” period. In the early days of neuromarketing, some vendors clearly overreached in making claims about what neuromarketing can do. Among those claims were declarations that neuromarketing can be used to trigger a “buy button” in the brain to create advertising that consumers cannot resist. Other vendors claimed they could accurately predict a consumer’s “propensity to purchase” by reading his or her brain waves in a single session of watching an ad. Not surprisingly, claims like these set off alarm bells in both academic and consumer protection circles — from the first group because academics knew the claims were wildly overstated, and from the second because consumer advocates feared the claims might be true. Over-interpretation of neuroimaging results from functional magnetic resonance imaging (fMRI) studies have been a particular area of concern, in part because research (which, ironically, could be classified as neuromarketing research) has shown that when neuroscience explanations are accompanied by color-coded images of brain scans, even if the images are irrelevant to the explanation, the general public finds them to be much more persuasive than when images are absent. Academic neuroscientists have been particularly critical of fMRI research in marketing and advertising that claims to identify “hot spots” in the brain where activity occurs during various tasks or mental states. This issue reached something of a boiling point in 2007 when an opinion piece appeared in The New York Times that purported to identify people’s attitudes toward political candidates based on fMRI brain scans. A group of 17 distinguished neuroscientists

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications responded with a letter to the editor strongly objecting to the reported findings, arguing that it simply isn’t possible to definitively determine something as complicated as a political attitude by looking at activity in a particular brain region. Murphy, Illes, and Reiner propose the following guidelines for communicating about neuromarketing in media and marketing presentations: Accurate media and marketing representation: Neuromarketing companies bear the burden of accurately representing their wares in media and marketing materials. At a minimum, they should fully disclose their scientific methods and measures of validity in all mass media presentations such as invited opinions, editorials, and news reports. They believe, and we concur, that adherence to a code of responsible communication and truth in advertising is necessary to sustain a positive and trusting public perception of brain science research, as well as promote the further development of effective neuromarketing technologies. We also believe that neuromarketers have an obligation to maintain scientific transparency in media and marketing communications that goes beyond what is required of traditional market research providers, because their methods are so new and different and many of the underlying scientific principles are so counterintuitive. Indeed, this was one of our primary motivations in writing this book — to contribute to an explanation of the science behind neuromarketing that is accessible not only to marketing specialists but also to the general public.

Providing evidence of validity and reliability to potential buyers We discuss the issues of validity and reliability in Chapter 19. Validity is about measuring the right thing; reliability is about measuring it right. Both are critical to the accuracy and generalizability of any form of quantitative research. Murphy, Illes, and Reiner cover this topic in detail. Here is a partial summary of their recommendations (their term external validity is equivalent to our term reliability): Internal and external validity: At a minimum, internal validity checks must be based on a sufficiently comprehensive research database to provide meaningful and effective results to neuromarketing consumers. Ensuring external and sustained validity requires neuromarketers to align

347

348

Part V: Living with Neuromarketing: Practical and Ethical Considerations their products and metrics with changing technologies and expanding neuroscience knowledge. Maintenance of safety and efficacy verification in neuromarketing research, development, and deployment is absolutely required. The availability of a normative database (a collection of findings that compare a firm’s metrics to actual marketplace performance; see Chapter 19) is highly relevant to this issue of establishing and communicating validity. But it’s also worth noting that such a database can take years to build. Traditional research firms have a huge advantage here, because many of them have normative databases of survey questions and answers that go back decades. No neuromarketing vendor has yet published a peer-reviewed validation of its metrics based on normative data, although several have claimed to be working on such a project. In the meantime, how can neuromarketing vendors provide evidence of validity and reliability? We recommend two interim approaches: ✓ Vendors can show their commitment to keeping up with changing technologies and knowledge by acting as conduits between the brain sciences and the marketing community. By identifying and interpreting technology developments and new scientific findings of relevance to marketers, they simultaneously provide evidence of their ongoing immersion in real science and their commitment to making that science accessible to their client base of marketers and advertisers. ✓ Vendors can do more to associate their methods with the growing body of findings now appearing in academic research that validate many of the core assumptions underlying neuromarketing. Here are four recent examples:

• In a series of articles published between 2008 and 2011, a group of Italian neuroscientists led by Laura Astolfi and Giovanni Vecchiato were able to predict memory and liking for advertising based on a combination of specific electroencephalography (EEG) brain-wave patterns, electrodermal activity, and heart rate.



• In 2012, Finnish researchers Niklas Ravaja and colleagues showed that brand purchase decisions can be predicted based on EEG asymmetries between the left and right hemispheres of the frontal cortex, validating a measure of emotional motivation used by many EEG-specialist neuromarketers.



• In another study published in 2012, neuroscientists Gregory Berns and Sara Moore used fMRI to predict the popularity of songs. Adolescents listened to a series of songs by relatively unknown artists while having their brains scanned. Three years later, the researchers correlated the scans with popularity, measured by the

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications sales of these songs over the intervening three years. They found that sales correlated with activation in the reward centers of the brain of the small group tested, while expressed likeability of the songs was not predictive of eventual sales.

• In two articles published in 2011 and 2012, neuroscientists Emily Falk, Matthew Lieberman, and colleagues reported on smoking cessation advertising campaigns using fMRI. In their first published study, they found that subjects’ brain responses to ads were better predictors of smoking cessation than explicit opinions about the persuasiveness of the ads. In a second study, smokers and experts watched ads for three campaigns while being scanned, and then rated the campaigns in terms of their likely persuasive impact on smokers. When the campaigns were run in live markets, their effectiveness was rated by comparing call-in rates to a toll-free number. In all cases, brain activations predicted the relative success of the campaigns better than either smoker or expert opinions, showing that the neural responses of a small group of individuals can predict the behavior of large-scale populations, and do so better than expressed judgments, even those of experts in the field.

In order to bask in the validation “glow” of these studies (and others that are beginning to appear on a regular basis), neuromarketing vendors only need to communicate how they’re using the same or very similar techniques. Unfortunately, this creates a problem for some vendors who insist on presenting their methods as a “black box” that contains proprietary techniques that are superior in performance to methods described transparently in peer-reviewed research papers. In the absence of convincing normative data that validates this assumption, these vendors are left in a bit of a pickle. We recommend that buyers of neuromarketing services treat black-box vendors with skepticism. Neuromarketing is evolving into a field that leverages established brain science as its foundation. Claims of superior performance with secret proprietary techniques are fading as a source of competitive advantage. More transparency is required in order for the neuromarketing field to adopt meaningful standards.

Moving the Industry toward “Neuro-Standards” A sign of maturity in any science-based field is a migration away from categorical, sensationalist, and “unique” claims and toward standards, transparent practices, and accreditation among service providers. Neuromarketing is clearly evolving in this direction, but it has a ways to go.

349

350

Part V: Living with Neuromarketing: Practical and Ethical Considerations

Getting past the “Wild West” of early neuromarketing In the early days of neuromarketing, as we mention earlier, something of a “Wild West” atmosphere pervaded the upstart field. Journalistic articles with titles like “In Search of the Buy Button,” “Hidden Persuasion or Junk Science?”, and “Is the Ad a Success? The Brain Waves Tell All” were common. Neuromarketing spokespeople were happy to provide provocative and unsubstantiated sound bites to eager reporters. Public advocacy groups were up in arms over this apparent new threat to consumer autonomy. A small number of corporate buyers with discretionary budgets were willing to give the new technology a try. These early adopters were the sorts of leaders in any field who will try new things in the hopes of finding a fresh source of competitive advantage, but who fully realize that most such experiments fail. These buyers stand in sharp contrast to mainstream buyers who tend to avoid new technologies until they’re proven and adopted by most of their peers. Early adopters are not surprised to hear wild and exaggerated claims. They expect them, because they know that many new vendors are competing for their attention and will say just about anything to get noticed. So, they discount the claims but buy anyway because they’re willing to experiment and they want to understand the new technology. But wild and exaggerated claims don’t work with mainstream buyers, who control most of the budget in any industry. These buyers don’t want to experiment; they want to adopt proven solutions that work with their existing processes and practices. In other words, they want solutions that are standardized and predictable.

Embracing new standards for neuromarketing A standard is an agreed-upon blueprint or design that allows products from different vendors to be interchangeable in some way. For example, because there are light-fixture standards, you can be confident that whatever company sells you a light bulb, the bulb will fit into your lamp’s socket. This doesn’t mean that all light bulbs are the same. They still compete with each other, but on attributes other than “socket fitting,” like price, longevity, or energy efficiency. A standard can also be a performance standard, like the fuel-efficiency standard that says new cars in the United States must achieve an average of 54.5 miles per gallon by 2025.

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications A prerequisite for industry standards is a sponsoring industry standards body. In the electronics industry, a company called UL tests electronic equipment, so light bulbs are designated as “UL certified” when they meet standards. Most industries have established industry associations, which, as part of their representation of the industry as a whole, develop codes of ethics and standards for members to follow. For example, the opinion survey industry has the American Association for Public Opinion Research, the market research industry has the Marketing Research Association, and the advertising industry has the Advertising Research Foundation. In 2012, the first trade association devoted exclusively to neuromarketing was founded, the Neuromarketing Science & Business Association. The first major standards effort directed at neuromarketing was launched by the ARF in 2010. Eight neuromarketing vendors using very different technologies — fMRI, EEG, biometrics, facial expression coding, and electromyography (EMG) — each analyzed TV ads provided by 12 sponsoring companies. The results were shared with a panel of science and marketing experts who looked for consistencies where standards could be identified or applied across methodologies. The experts identified several areas where they thought standards could be developed: first, with regard to the suitability of different methods for measuring different advertising responses, and second, with regard to clarity of communication regarding various design and delivery aspects of any neuromarketing study, using any methodology. Recommended standards for measuring different advertising response variables included the following: ✓ Comprehension, understanding of messages: Traditional methods assess conscious comprehension well. Neuroscience measures can complement these traditional methods by identifying problem spots in a story or message. ✓ Purchase intent: Traditional measures can be sufficient if properly framed and validated. fMRI may provide complementary measures of emotional response ✓ Focus of visual attention: Eye tracking appears to be the best measure. ✓ Memory: Traditional methods are good at measuring conscious recall. Some neuroscience methods can assess implicit and long-term memory and provide details, such as moments that were not processed explicitly. ✓ Arousal, strength of emotional response: Biometric and neurological methods generally have an advantage over traditional methods. ✓ Direction of emotion (liking or disliking): Neurological methods and facial coding can be more accurate than traditional methods, especially

351

352

Part V: Living with Neuromarketing: Practical and Ethical Considerations for assessing “branding moments,” but limitations of some methods were noted. ✓ Engagement, personal relevance, emotional engagement: Concepts need to be more clearly defined. Appropriately defined, neuroscience methods would likely have an advantage over traditional methods. ✓ Social desirability: Neuroscience methods generally avoid cognitive biases like social desirability that are difficult for traditional methods. With regard to design and delivery of research, the experts agreed that neuromarketing studies would benefit from more standardization in several areas: ✓ Explaining sample size, sample composition, and recruitment criteria ✓ Showing how the experimental design supports research objectives ✓ Documenting data collection, analysis, and interpretation procedures ✓ Specifying validity and reliability of metrics used in the study ✓ Identifying statistical tests and significance levels for all comparisons ✓ Clearly separating findings from interpretations in reports of results These neuromarketing standards provide an excellent start. We have contributed some ideas on a similar set of design and delivery standards in Chapters 19 and 20. Because the ARF recommendations apply specifically to advertising testing, similar standards efforts may be taken up in other application areas, such as branding, product design, packaging, shopping, online, and entertainment. These efforts can be spearheaded by associations within each of these application areas, or pursued under a dedicated neuromarketing association, like the NMSBA. Standards are important for industry growth and acceptance because they codify what buyers expect. To the extent vendors show a willingness to comply with standards, commerce can be conducted more efficiently and with more confidence by both buyers and sellers. Vendors who resist standards by claiming they conflict with proprietary methodologies are missing the point. Standards don’t replace competitive differentiation; they just make it easier for buyers to buy. For this reason, vendors ignore standards at their own peril. One topic the neuromarketing industry hasn’t addressed yet (as of mid-2013) is vendor accreditation (the process of certifying an organization as qualified to practice in a field). Mature industry associations often tie membership in the association to meeting accreditation criteria. Accreditation strengthens the image of an industry by screening out unqualified entrants and providing an indicator of quality that allows buyers to engage the industry with greater

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications confidence and predictability. Neuromarketing may not be quite ready for accreditation at this time, but as standards become more established, this may be a function that the NMSBA should consider adopting.

Understanding Legal Issues Concerning Neuromarketing In keeping with its “Wild West” early years, neuromarketing has had some brushes with the law. As journalists and other commentators began reporting on or speculating about the potential ability of neuromarketing techniques to press “buy buttons” in the brain, some observers began to ask about the legal implications: If neuromarketing constitutes a threat to the autonomy of consumers, should it be regulated or even banned outright?

Should neuromarketing be banned? This may seem like an extreme question, until you consider that in France, neuromarketing has, in fact, been banned. In 2011, the French Parliament outlawed all uses of neuroimaging for purposes other than medical or scientific research or expert testimony in court cases. The net effect was to make neuromarketing illegal in France. Looking at some of the commentary around this decision, it seems clear that French lawmakers were not so much concerned about the possibility of neuromarketing being used to erode consumer autonomy as they were convinced that neuromarketers were unscrupulous opportunists who were lying about the capabilities of their products and services. In our opinion, this sort of legislative activism is both premature and inappropriate. It’s premature because it constitutes a rush to judgment well before all the relevant evidence is in. If every new technology were banned because of the imprudent statements of its early advocates, most technology innovation would be stopped in its tracks. Early adopters are well aware of the tendency toward exaggeration in new fields. They invest in new technologies despite these claims, not because of them, and they certainly don’t need government legislators second-guessing how technologies will evolve over time. But more important, this kind of regulatory reaction is inappropriate, because it replaces marketplace decision making with legislative decision making. Buyers determine what’s believable based on performance, not hype. If neuromarketers make claims that are unsustainable, it won’t take long for the marketplace to

353

354

Part V: Living with Neuromarketing: Practical and Ethical Considerations figure this out and move its research spending elsewhere. Case in point: Many of the companies and individuals who were most associated with “neuro-hype” in the early days of neuromarketing are no longer active in the field.

Balancing accountability and free speech in the marketplace The more interesting question that neuromarketing has raised in legal circles is whether messages and cues we receive through nonconscious means constitute “speech” that should be protected under free speech laws (in the United States, these fall under the jurisdiction of the First Amendment), or whether they should be subjected to separate and more restrictive regulation. The underlying idea is that nonconscious influences on consumers (such as priming) constitute a special case of coercion that erodes the decision-making autonomy of individuals by subjecting them to influences on their choices and actions that they aren’t aware of and, therefore, can’t control. We examine this idea throughout the book, from many angles, and we provide lots of evidence supporting the first assertion: Nonconscious influences do exist, and they do influence consumers in ways that consumers aren’t aware of. But what’s added in this legal version of the question is the idea that rational consideration is the norm for consumer decision making, and nonconscious influence is the exception. But modern brain science tells us just the opposite: Nonconscious influence is the norm and rational consideration is the exception. Given that responding nonconsciously to nonconscious influences is pretty much what our brains spend most of the time doing, calling this “coercion” seems problematic. How do we separate coercive from noncoercive influences? We use nonconscious cues in our enjoyment of art, our judgments of people, and our choices of soft drinks. Sometimes nonconscious influences help us make better decisions; other times they lead us astray. Sometimes nonconscious processes even help us resist nonconscious influences, in the form of persuasion correction goals (see Chapter 8). Contrary to the idea of coercion, our nonconscious minds aren’t at war with our conscious minds, constantly trying to undermine them with bad ideas and irresistible temptations. The two systems in our brains work together and generally do a good job of keeping us safe and satisfied. The inescapable fact is that we absorb messages and other cues from our environment through both conscious and nonconscious channels. This certainly creates some interesting challenges for defining the concept of “speech” in a legal sense, but it doesn’t give governments the license to start classifying some messages and cues as coercive and others as not.

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications Human beings are as accountable today for their actions as they were before the nonconscious mind was discovered. The doctrine of free speech supports that accountability, allowing people to roam freely in the marketplace and make their choices on the basis of whatever influences them at the moment. Brain science tells us that we’re all taking in nonconscious influences all the time, and we use these influences in ways we aren’t aware of. But we all experience the consequences of our choices, and from those consequences we learn and can change our later choices and actions. That is how consumers exercise their autonomy, and how products rise and fall in the marketplace, whatever messages and cues those products may be covertly sending us.

Using Neuromarketing to Make Us Healthier and Wiser Now that we’ve made the case that neuromarketing isn’t a source of evil that needs to be banned or regulated, let’s consider the opposite question: Can neuromarketing be a source of good in society? This question moves us into the realm of public policy, where we see at least three areas that can benefit from the insights and techniques of neuromarketing: public service advertising, public policy design, and education.

Neuromarketing and public service advertising With many companies making investments in neuromarketing to improve traditional advertising, it seems a natural extension for neuromarketing to be applied to improving public service advertising (PSA). What PSA can learn from neuromarketing is that people’s responses to advertising use the same brain circuitry, whether they’re being asked to act smarter or to buy a new brand of toothpaste. The same metrics apply, but the definition of what constitutes a “good” score may vary. As we discuss in Chapter 11, one form of PSA — the direct response appeal for an immediate action, like making a contribution to a charitable organization — can be evaluated in terms of the direct route to advertising effectiveness. It needs to attract attention, generate interest, deliver a compelling persuasive message, and prompt an immediate action. Emotional response is extremely important to such ads, and indirect neuromarketing measures of emotion can help overcome the strong social-desirability bias that often distorts self-reports about altruistic causes and behaviors.

355

356

Part V: Living with Neuromarketing: Practical and Ethical Considerations For PSAs that are meant to change longer-term behavior — such as promoting smoking cessation, immunization, medical checkups, and so on — emotions are perhaps even more important. And here we see some interesting differences from commercial advertising. Unlike traditional ads, which usually evoke only the positive end of the emotional spectrum, PSAs tend to use a much wider emotional palette in communicating to viewers. Neuromarketing can make useful contributions, both theoretically and practically, by helping PSA advertisers better understand how these emotions impact effectiveness. Some initial neuromarketing work in this area has been intriguing. British research company BrainJuicer, for example, explored the use of negative emotions in PSAs, and found that negative emotions have different effects according to how they’re directed. Sadness, according to the study, can spur action if the ad encourages viewers to feel the sadness of others, but not if it simply makes viewers feel sad themselves. Similarly, evoking negative emotions — disgust, anger, even fear — with an assertive message about how to overcome those emotions, can be a powerful motivator of action or behavior change.

We see in published research like the Falk studies of smoking cessation (mentioned earlier in this chapter) that PSAs do work, and that they appear to work in ways that may not be fully accessible to the conscious mind. This creates a natural opportunity for neuromarketers to make a contribution to PSA effectiveness research, possibly in partnership with a sponsoring trade association. The results would be beneficial to PSA advertisers and would provide a little polish to the reputation of neuromarketing as well.

Neuromarketing and public policy design and implementation The idea that neuromarketing principles and techniques can be relevant to public policy was first popularized by Richard Thaler and Cass Sunstein in their 2008 bestseller, Nudge: Improving Decisions About Health, Wealth, and Happiness (Penguin). Thaler and Sunstein took the behavioral economics notion of choice architecture (structuring a choice situation to favor one choice over another) into the world of public policy, showing how vastly different policy outcomes can be achieved by making small changes in context or how choices are presented. The classic example of a nudge is the case of organ donations. In countries where people have to check a box on an application form to become organ donors, only about 5 percent do so. But in countries where people have to check a box not to become a donor, more than 80 percent become donors.

Chapter 22: Neuromarketing Ethics, Standards, and Public Policy Implications This “nudge” makes use of the default bias heuristic (decision-making shortcut), introduced in Chapter 8. Our cognitive-miser brains would rather accept a default, whatever it is, than expend the effort to make an explicit decision. Other examples of successful policy nudges include creating defaults for enrollment in 401(k) retirement plans and encouraging energy conservations by showing people how much energy their neighbors are saving. The logic of these public policy nudges is strikingly similar to the logic of the shopper marketing strategies discussed in Chapter 12. The same principles apply. To our knowledge, no neuromarketing firm has yet reported getting involved in designing or testing public policy choice architectures, but this is an area that can clearly benefit from the skills and expertise of neuromarketers, while simultaneously producing meaningful contributions to the public good.

Neuromarketing and education Can neuromarketing be used to improve education? We think so. Many brain science findings relevant to neuromarketing are also relevant to education, sometimes in a reverse manner. For example, in Chapter 5 we explain that processing fluency discourages conscious scrutiny. Processing disfluency also produces greater scrutiny, more attention to detail, and better memory retention. So, here we have an easy lesson for education: Use more hard-toread fonts in teaching materials! In some cases, what works for marketing materials may be exactly what doesn’t work for teaching materials. In other cases, maybe educators have something to learn from marketers and neuromarketers. How might low-attention processing principles be applied to education? Is it possible to make better use of the vast capacity of implicit memory and learning in educational contexts? Such questions can provide a foundation for collaboration between educators and neuromarketers. Some educational materials can be beneficially tested using neuromarketing techniques. The same measures that test ads for effectiveness can be used to test teaching materials for effectiveness. Why should presentations, demonstrations, and study material we use in our classrooms be any less engaging and enticing than the ads we show on TV?

A final thought is that perhaps neuromarketing itself, or at least the key brain science concepts on which it is built (see Chapter 24), should be taught in our schools. Throughout this book, we note that the consumer’s best defense against System 1 thinking and nonconscious influences is to have a basic understanding of the brain dynamics involved, and how they operate outside

357

358

Part V: Living with Neuromarketing: Practical and Ethical Considerations our conscious awareness. We know from countless studies that when people are made aware of the nonconscious primes and cues impacting their behavior, the impact disappears. We believe it’s never too soon for kids to start being educated about how their brains work, how marketing works, how they make decisions, and how they can equip themselves to be better and smarter consumers.

Part VI

The Part of Tens

H

In this part . . .

ere, we highlight some of the most important points from the book in two “top ten” lists. First, we dispel ten myths about neuromarketing. Then we describe ten scientific principles that support neuromarketing, and summarize why they change the game for traditional market research. Consider this part the “fun facts” part of the book, full of interesting tidbits you can toss into the conversation at your next family picnic.

Chapter 23

Ten Mistaken Beliefs about Neuromarketing In This Chapter ▶ Separating fact from fiction about neuromarketing ▶ Putting neuromarketing news and opinions in context ▶ Avoiding the hype about neuromarketing

A

dd brain science to market research, and the public will accept it with open arms. That’s what neuromarketers assumed when the field first emerged. Some early pioneers overhyped the capabilities of neuromarketing and created more than a little backlash among traditional research vendors, scientists, and journalists. Some of that criticism was justified — but some was based on faulty assumptions that can still be heard in many discussions of neuromarketing, pro and con. We address ten of those faulty assumptions here.

Your Brain Has a “Buy Button” You can probably recall more than one movie in which an evil villain takes over a person’s mind and makes him do things he wouldn’t ordinarily do. In the movies, it’s usually a “kill button” that the bad guy presses, but in discussions of neuromarketing, it’s the “buy button” that people are worried about. How real is this concern? Can it really happen, or is it just a good Hollywood plot device? This concern has been expressed by consumer protection groups that fear that neuromarketing represents some kind of new, super-powerful marketing technique that consumers will be unable to resist. We believe it’s always good to

362

Part VI: The Part of Tens keep a watchful eye on marketing, because excesses and even outright fraud do sometimes occur. But in this case, we believe the underlying premise is incorrect. First, there is no scientific evidence that any location or system exists in the brain that acts as a “buy button.” At best, this is simply a false application of the idea of a reflex. A complex process is completely different from tapping someone on the knee to make his or her leg bounce. Second, even though it’s undeniable that people use nonconscious processes when acting as consumers, those processes can’t simply be co-opted by marketers. We’ve seen evidence that some of these processes are “corrective” and can protect people from being overly persuaded by marketing. In other words, if people insist on using the “buy button” metaphor, we believe they should be ready to talk about a “don’t buy button” as well. Our nonconscious processes drive an approach-and-avoidance system, not just an approach system. The story of “subliminal advertising” is often raised as evidence that appealing to the nonconscious brain can control behavior. But we know today that the supposed experiment that “proved” this principle — conducted by James Vicary at a movie house in 1957, in which he claimed to have increased snack sales by flashing subliminal messages (messages flashed on the screen too quickly for people to consciously see them) during the movie was a fake. Perhaps this was the first recorded instance of overhyping neuromarketing! Numerous real studies on the effects of subliminal messages have been done since then. They’ve shown, without exception, that people do perceive these messages subconsciously, and that they can have an effect on subsequent behavior, but the effects are small and short-lived and can’t produce the kind of results Vicary imagined. The “zombie consumer” is indeed science-fiction fantasy, and although there is still much to learn about the human mind, there is no evidence that there is anything like a “buy button” in the human brain.

Marketing Can Control You Depending on your definition of control, you could’ve been under the control of great branding by the For Dummies series when you bought this book. The familiar yellow-and-black cover, the catchy title, the convenient store display, and the familiar brand all contributed to your decision. But did these factors make you buy the book against your will? We don’t think so. You could’ve bought Goldfish For Dummies instead.

Chapter 23: Ten Mistaken Beliefs about Neuromarketing We believe “control” is quite different from “influence.” What control means to us is no chance of an alternate route — you have to do what your controller wants you to do. This scenario is simply unrealistic in the world of consumer choice that we live in today. Thanks to competition, there is always an alternate route, an alternate product, and an alternate choice. Influence is about probabilities, not certainties. If you see an ad, your probability of buying a product may increase by 5 percent. But if you’ve used a product ever since you were a kid, your probability of buying that product may be 95 percent, whether or not you saw that ad. Influence is also about conditionality — if conditions change, your behavior may change. Even for that product you’ve been using since you were a kid, if it isn’t available in the store today, or if you don’t have enough money in your pocket to buy it, or if the manufacturer has gone out of business, you’re going to do something different. There is always that 5 percent chance you may choose an alternative. Consumers are not helpless when it comes to resisting marketing messages. As we show in Chapter 7, persuasion is hard: People sometimes activate nonconscious goals to resist persuasive messages, frustrating the goals of marketers. Given this finding, the intuitive consumer who responds to advertising and marketing with automatic and nonconscious reactions may, in fact, be a tougher sell for marketers, not an easier one. What about the argument that advertising is a prime (an object in the environment that triggers associated thoughts and actions automatically and outside conscious awareness), that by merely watching an ad or hearing a message, we’re irresistibly “programmed” to buy that product? We believe advertising is, in fact, a prime and can trigger behavior, but it’s important to remember the two key limitations of priming: ✓ People can’t be primed to pursue something they don’t already feel positive about. ✓ People are resistant to goal priming if they don’t perceive a gap between the goal and their current state. Turn to Chapter 5 for more on priming and these two points. Concerns like the one covered in this section often come from another mistaken belief, that nonconscious and conscious brain processes are somehow at war with each other. The brain science explained in this book shows that this isn’t the case. Instead of working against each other, our conscious and nonconscious brains operate as a very effective “tag team” that, more often than not, keeps us on track to make good (or at least good enough) decisions throughout our everyday lives.

363

364

Part VI: The Part of Tens

Neuromarketing Can Implant Ideas in Your Head It’s an extreme way to say it, but we’ll say it anyway: It’s the purpose of marketing, not neuromarketing, to plant ideas in your head. This has been a reality since the first marketing message was delivered — probably when an early cave dweller invented the two-for-one promo to move his inventory of clubs and spears. We absorb ideas by experience, personal learning, and learning from others (either directly or vicariously). Our sense organs pour sensory impressions into our brains at an astounding rate, inputting up to 11 million bits of information every second. We’re only able to function under that onslaught of information by using highly sophisticated filtering and prioritizing processes in our brains, most of which are nonconscious and operate outside our awareness. The bottom line is that putting ideas in our heads is a complex process, and not something that can just be “done” by neuromarketing or any other external means. Most important, the brain is not a passive receptacle that’s ready to be “filled up” by whatever material is poured into it. We build experiences and form perceptions over time, and we always have the ability to weigh options. Some persuasion techniques (for example, emotional appeals) may make us more open to considering new ideas than others, but we don’t take in messaging and automatically act on it without a huge amount of intervening brain work.

Your Nonconscious Can Overrule Your Conscious Mind In fact, the opposite is true. Your conscious mind can always overrule your nonconscious mind, but not the other way around. This has been verified in hundreds, possibly thousands, of studies that have looked at nonconscious influences on human (and consumer) behavior. In every case, when participants in experiments are made aware of the nonconscious influence techniques that have been used in experiments, the effects go away. The nonconscious mind definitely acts as a partner to the conscious mind, filling in much of what we see in the world around us and preparing us to respond. The nonconscious gently “nudges” one item over another to bring it to our conscious attention. And the nonconscious participates so deeply in

Chapter 23: Ten Mistaken Beliefs about Neuromarketing our decision-making processes that we often fail to expend additional conscious resources to make choices. If there is a problem in this division of labor, it isn’t that our conscious minds are unable to overrule our nonconscious minds, but that we so often choose not to, even though we’re perfectly capable of doing so.

Neuromarketing Will Kill Creativity in Marketing Creativity in marketing is alive and well. Neuromarketing is not the enemy of creativity. Creative agencies continue to produce compelling advertising and marketing campaigns that grab consumer attention, create a small moment of joy in an otherwise uneventful day, and sometimes lead to radically improved sales, profits, and market share for lucky brands and products. We believe neuromarketing is a type of research that actually supports the creative process, more so than traditional research. Savvy creatives have been using best practices from psychology and neuroscience for years, whether they know it or not. Explicitly learning from neuromarketing will only help them build more appealing campaigns and messaging. Because our brains are naturally drawn to novelty (discussed in Chapter 5), we’re always on the lookout for things that stand out as new and different. Creativity in advertising is one way marketers can take advantage of this built-in curiosity to draw our attention to new products and ideas that may be good for us. The novelty effect has its challenges because people don’t embrace new ideas easily. Our brains are still biased toward the comforts of familiarity and processing fluency (see Chapter 5). We believe the best creative minds in marketing can embrace this challenge and use their talents to help consumers accept new ideas in a creative way that will overcome their natural bias to resist the new and embrace the familiar.

Surveys and Focus Groups Are Dead Although some neuromarketers have predicted the end of surveys and focus groups, expecting them to go away anytime soon is unrealistic. We believe marketers will start seeing these methods in a somewhat different light going

365

366

Part VI: The Part of Tens forward, but we don’t expect them to go away. They provide a useful kind of value for market researchers. When it comes to surveys, there will always be some questions that are perfectly reasonable to ask people and that are likely to get accurate responses. As we show in Chapter 15, people generally are much better at describing what they do than what they think or what they feel. Asking people to make rapid, simple, binary choices is also a good survey technique, because it minimizes biases in responses. You only start getting into trouble if you ask people why they chose option A over option B, because the odds are, they have no idea — but they’ll make up something really good! Focus groups aren’t good for verifying anything. More scientific approaches should always be used for that purpose. The value of focus groups is that they allow marketers to experience their customers up close in a relatively natural setting. They fulfill a need for human connection that can’t be replicated in more scientific settings. The best information conveyed by focus groups is not what people say, but how they behave. Intuitive marketers can pick up these nuances and incorporate them as insights in their work. Ironically, just like intuitive consumers, intuitive marketers usually can’t articulate exactly how they do this or why or when it works. We prefer an integrated approach to market research. What people say is often as important as what they think and what they do, but it has to be treated in context. Although the last thing a good marketer wants to do is believe everything a consumer says about the consumer’s preferences, likes, or future plans, putting that information alongside nonconscious responses provides a unique opportunity to see how people’s conscious minds interpret and rationalize what their nonconscious minds need and want.

Neuromarketing Is Inherently Evil It’s somewhat ironic that neuromarketing explains why encountering something new and different — like neuromarketing — is often greeted by resistance and rejection. The first reaction to something new and different is, as we describe in Chapter 5, usually caution, vigilance, and (more often than not) dislike. And so it appears to be with many initial reactions to neuromarketing. The suggestion that neuromarketing will displace traditional methods further adds to the people’s concerns that this is an alien force that needs to be repelled.

Chapter 23: Ten Mistaken Beliefs about Neuromarketing As we argue in Chapter 1, this reaction mixes up marketing and neuromarketing. Marketing can certainly be used for evil purposes, such as when it’s used to communicate fraudulent claims. But, on the whole, society sees marketing as something good and useful. We tolerate its more irritating excesses because it has a more important positive function: It brings information to the consuming public that can help them match their needs and wants with products and services that meet those needs and wants. Neuromarketing is a new set of research techniques and insights for market research, based on brain science. It’s neither inherently evil nor inherently good. Its techniques provide some new ways to measure marketing and understand how marketing works in practice. Basing marketing decisions on a realistic understanding of how consumers’ brains are really reacting to your brands and products will always yield better results than depending on folk knowledge or magical thinking. We also believe that neuromarketing can be a force for good, if people choose to use it that way. For example, there is no reason why neuromarketing can’t be used to improve public service messaging designed to encourage people to take better care of themselves and those around them. Insights about what’s important to the human brain may open up new possibilities for this kind of messaging that haven’t been considered before. As neuromarketing research becomes more mainstream, the market research industry will step up efforts, already underway, to establish standards and guidelines for the ethical practice of neuromarketing, similar to the standards and guidelines it has established for other research techniques. We discuss these efforts in detail in Chapters 21 and 22.

Neuromarketing Isn’t Based on Real Research The early days of neuromarketing were filled with more than a few exaggerated stories and claims. The scientific foundations of these assertions were, unfortunately, sometimes limited at best. Today, with the entry of more practitioners into the field and the increasing adoption of neuromarketing by large, mainstream corporations, there is greater demand for accountability and disclosure regarding the science that underlies neuromarketing. We see this trend as very positive because what makes neuromarketing compelling is not its exaggerated claims, but the depth of the real science behind it.

367

368

Part VI: The Part of Tens In this book, we go into a fair amount of detail about that real science. We do so, in part, because it’s inherently fascinating research, but also because it has been somewhat obscured by neuromarketing vendors who want to tell a simple story to sell their wares. We like simplicity — but not too much simplicity. In these pages, we show that there are three deep research disciplines that neuromarketing draws upon: neuroscience, social psychology, and behavioral economics. Each of these disciplines provides a strong foundation for neuromarketing. We believe the field can only become more credible by acknowledging its dependence on these real scientific sources.

Neuromarketing Is Only about Advertising The science underlying neuromarketing can be applied to nearly any human endeavor. Developing and testing advertising and marketing are significant commercial foci today, but there are applications in many other areas as well. In this book, we give a sense of just how broadly neuromarketing is being applied by companies around the world. Its techniques are currently being used for applications as diverse as brand-equity testing, product development, packaging design, in-store marketing, online marketing, and entertainment. Even more applications are on the horizon (not covered in this book simply because we don’t have room for them), including legal, political, economic, and educational applications of neuromarketing. The tendency to equate neuromarketing exclusively with advertising is probably a byproduct of the mistaken beliefs discussed earlier about the power of neuromarketing to control minds and push the “buy button” in our brains. These concerns make neuromarketing appear particularly ominous when applied to advertising. But as we saw in Chapter 11, the field of advertising research has much to learn from brain science and neuromarketing, but how to trigger a “buy button” in consumers’ brains is not one of those lessons.

All Neuromarketers Always Tell the Truth Throughout this chapter, we’ve explored a number of skeptical attitudes toward neuromarketing, which are generally healthy but sometimes go overboard in their concerns. There is also an opposite response, which may be called “neuro-idolatry,” an irrational tendency to trust anything written or said about marketing that’s accompanied by a picture of a brain. Ever heard the phrase, “Trust me, I’m a doctor”? Well, the same rationale has been applied

Chapter 23: Ten Mistaken Beliefs about Neuromarketing more than once in neuromarketing. Sadly, the invocation of neuroscience sometimes seems to have the magical ability to turn off the brains of otherwise savvy research buyers. It’s not uncommon to see an article with brilliant images of brain scans, only to discover that the research has little to do with scientific principles or procedures. In the early “Wild West” days of neuromarketing, there was definitely an opportunity for “snake-oil salesmen” to take advantage of buyers’ ignorance and curiosity with unscrupulous claims and offers. But in the light of growing competition, alternative methods, and an ever-expanding body of underlying science, such claims are unlikely to survive scrutiny by betterinformed buyers. As with any other research methodology, it’s always important to ask the right questions and not take a vendor’s claims at face value. In Part V, we provide a lot of good ammunition for grilling neuromarketing vendors on their methods and scientific foundations. As with any research methodology, digging deep into how researchers draw conclusions and align with proven academic research is important.

Several organizations now provide excellent third-party resources to help evaluate the validity and efficacy of neuromarketing. Industry organizations like ESOMAR (www.esomar.org) and the Advertising Research Foundation (www.thearf.org) have begun creating guidelines for neuromarketing research and codes of conduct to cover research ethics in the field.

369

370

Part VI: The Part of Tens

Chapter 24

Ten Scientific Pillars Underlying Neuromarketing In This Chapter ▶ Identifying the most important scientific foundations of neuromarketing ▶ Reviewing how nonconscious processes change the understanding of consumer

behavior

▶ Remembering why consumers aren’t always rational

I

n this book, we devote a lot of space to highlighting the scientific foundations of neuromarketing. Here we review ten of the most important scientific concepts that underlie the field. Each of these ideas represents a significant discovery in one of the brain sciences: neuroscience, social psychology, or behavioral economics. Each has big implications for our understanding of how and why consumers act the way they do — what they like, how they choose, and why they buy.

System 1 and System 2 Daniel Kahneman didn’t invent the System 1–System 2 model of brain processes, but his work over the last several decades has popularized it as one of the most useful overarching frameworks for understanding how the human brain works and, in particular, how the nonconscious and conscious parts of the mind work together. We discuss the significance of this model in Chapters 2 and 8. System 1 and System 2 are neutral terms describing two distinct sensory processing and decision-making systems in the brain. System 1 is fast; System 2 is slow. System 1 is automatic and outside our control; System 2 is voluntary and under our control. System 1 makes intuitive judgments based on simple associations and is biased toward action and belief; System 2 is more cautious and makes judgments based on logic and evidence. The existence of System 1 was hidden until a few decades ago because System 2 is the only system we’re aware of. The two systems work together,

372

Part VI: The Part of Tens not in opposition to each other. System 2 usually operates as a controller of System 1, but it is a lazy controller, so most of our everyday impressions, reactions, and decisions are driven by System 1 processes. This model is key to understanding why traditional approaches to market research are at risk and why neuromarketing has emerged as an alternative and extension. Market research before the emergence of neuromarketing was based on a System 2 view of the brain. All three workhorses of market research discussed in Chapter 15 — interviews, focus groups, and surveys — assume that consumers have access to their own mental states and can accurately describe what they like and why they choose. But brain science has amassed vast amounts of evidence showing that this assumption is incorrect and that consumers regularly use System 1 processes they’re not aware of. These processes bias consumer behavior in predictable ways that don’t correspond to the expectations of logic. Neuromarketing has emerged because it offers new research methods that can measure these System 1 processes and provide new insights into how and why consumers respond to marketing and act in the marketplace.

Priming Priming is the psychological mechanism by which System 1 influences what we think and do as human beings and, of course, as consumers. Described in detail in Chapter 5, priming can be thought of as the System 1 alternative to persuasive messaging. Persuasion requires that people pay attention to a message, judge it to be correct and reasonable, and remember it. Priming requires none of these things. Priming is based on the mental process of associative activation, the brain’s ability to automatically and rapidly trigger associated ideas and concepts when an idea comes to mind. Bring the idea of “dog” to mind, and your brain immediately activates a massive network of doggy associations. These associations don’t flood into your conscious mind (that would overwhelm you), but they become more accessible to your conscious mind as you deliberate about the particular dog-related issue you’re considering. Bring the idea of “pancakes” to mind, and a completely different network of associations is activated. This is how our brains anticipate the world around us, and prepare us for action in any circumstance. Priming is one of the main mechanisms by which marketing operates, and it significantly impacts the decisions we make as consumers. Advertising is a prime. Product placement in movies is a prime. Images and displays in stores are primes. Priming is a nonconscious process, so you can’t learn how it’s operating by just asking people.

Chapter 24: Ten Scientific Pillars Underlying Neuromarketing A key thing to remember about priming is that it doesn’t follow the rules of logic that govern System 2 processes. Priming simply makes some things more accessible to downstream mental processes than other things. The ideas involved in priming don’t have to be connected in any rational way. For example, as we describe in Chapter 8, giving people a pen with green ink primes them to increase their stated preference for green products.

Emotional “Somatic Markers” Emotions operate at two levels in our mental lives: one conscious, the other nonconscious. Conscious emotions are what we usually call feelings. Nonconscious emotions are what psychologists call affective states, and they include emotional somatic markers, first discovered by neuroscientist Antonio Damasio. These somatic markers (which we call emotional markers in Chapter 6) play a crucial role in consumer decisions and responses to marketing. Emotional markers are memories of bodily responses to experiences in the past. The emotional contents of these experiences (positive or negative, low or high intensity) are coded in memory and accessed by mental response routines that do not pass through conscious deliberation — in other words, they occur outside our awareness. Emotional markers can be triggered by primes and influence the accessibility of other thoughts when the prime is encountered. For consumers, emotional markers play a big role in judgment and choice, greatly simplifying how we interact with the marketing world around us. Even though we may not be aware of the degree of attraction or aversion we may have “marked” for a given product or brand, those markers provide us with a nonconscious shortcut to a quick and intuitive response that “feels right” and simplifies our decision making (see Chapter 8). According to Damasio’s somatic marker hypothesis, emotional markers are created and updated by every experience we have in our lives. This means that every time a consumer encounters a product or brand — whether directly (through personal use or consumption) or indirectly (through exposure to marketing) — is an opportunity to slightly change that consumer’s emotional markers in either a positive or negative direction and influence the consumer’s later behavior. Accordingly, understanding and measuring the direction and intensity of emotional markers in target audiences should be fundamentally important to product and brand managers in businesses of all sizes.

Processing Fluency Processing fluency is an attribute of a stimulus (something observable in the real world around us that our brains perceive and react to), not something

373

374

Part VI: The Part of Tens we generate in our minds (like an emotional marker). When we say something has processing fluency, we simply mean that it’s easy for our minds to process. Social psychologists have found that many features of a stimulus can create processing fluency, including redundancy, symmetry, and contrast. Also, prior exposure to an object, which increases its familiarity, appears to reliably improve processing fluency (see Chapter 10). Priming and processing fluency are related. Researchers have found that objects that are preceded by a perceptual (visually related) or conceptual (meaning related) prime are more easily processed than non-primed objects. They also tend to be more liked than non-primed objects, and may even be judged as more familiar than they really are. Processing fluency is important to marketing because our brains are cognitive misers that don’t like to work (that is, think) too hard. So, when something comes along that’s easy to process, we tend to give it special treatment. As described in Chapter 5, processing fluency has a disproportionate influence on many of our judgments and decisions as consumers. A product, package, or ad that is easy to process is more likely to be seen as more familiar, more truthful, more beautiful, less risky, and more trustworthy.

Misattribution One of the things scientists have learned from studying System 1 and System 2 processes separately is that System 1 is sloppy. It makes connections and guides behavior based on simple associations, not logic. When System 1 makes a connection, it assumes that connection to be true and real, and it starts triggering a cascade of additional connections that follow from it. Unless System 2 steps in to override this process with conscious deliberation, we’re likely to respond and act as if all these associations were true and real. But as we’ve seen in the example of processing fluency, as well as many other examples presented throughout this book, many of the shortcuts our System 1 judgment and decision-making processes use are based on misattribution. When you mistake processing fluency for truth, beauty, trustworthiness, or familiarity, you’re making a misattribution. When you fail to see that adding a more expensive decoy product to a store display has influenced your buying decision, and instead attribute your choice to a longstanding preference, you’re making a misattribution. Misattribution usually isn’t a big problem. Often it gets us to the right outcome, even if it gets us there by the wrong route. A product that presents itself fluently, clearly, and simply is likely to be a good product that delivers on its promise. And if it isn’t, a negative usage experience will quickly adjust our expectations so that we’re no longer fooled by its lure of processing fluency. Misattribution can be a bigger problem for large, infrequent purchases,

Chapter 24: Ten Scientific Pillars Underlying Neuromarketing but in those cases we’re much less likely to bypass System 2 as part of our decision process, so System 1 misattribution is actually less likely to be decisive in such situations. For marketers and market researchers, misattribution can be a significant danger when conclusions are derived from asking consumers questions and believing their answers. Even when people are completely honest and sincere, if they’re misattributing the sources of their judgments and decisions, their self-reports will lead researchers astray. As discussed in Chapter 2, this is one of the major justifications for the growing popularity of neuromarketing measurement techniques that do not rely on self-reporting.

Nonconscious Goal Pursuit One of the most remarkable and counterintuitive findings of social psychology is the discovery of nonconscious goal pursuit in human (and consumer) choice and behavior. Nonconscious goals are covered in detail in Chapter 7 because they provide an important mechanism that connects priming to consumer actions. Nonconscious goals can be activated by a wide variety of motivational primes, including social situations, people, brands, ads, and social norms. Once activated, nonconscious goals are pursued exactly like conscious goals, but without conscious awareness: ✓ They’re pursued over extended periods of time. ✓ They persist in the face of obstacles. ✓ If interrupted, we resume pursuing a goal at the first opportunity, even if intrinsically more attractive activities are available to us. ✓ The strength of goal motivation increases over time until fulfilled. ✓ When the goal motivation is fulfilled, it disappears rapidly. ✓ The outcome of goal pursuit — whether success or failure in reaching the goal — can change a person’s mood and behavior after the fact. Nonconscious goals are important to marketing because they can influence product preferences, choices, and shopping behavior. An important lesson for marketers is that the relationship between primes and goals has to be tested — it can’t be assumed. Primes may not trigger the goals you expect. For example, we document in Chapter 7 the existence of persuasion correction goals, which can be triggered when consumers feel they’re being subjected to persuasion pressure. Priming that appears to be benign and positive to a marketing professional may, in fact, be generating nonconscious resistance, rather than acceptance, of a marketing message. The complexity and subtlety of nonconscious goal pursuit don’t make the marketer’s job any easier.

375

376

Part VI: The Part of Tens Because consumers don’t have access to their nonconscious goals, nonconscious goal pursuit has to be studied indirectly, inferring goal activation and pursuit from consumer choices and behaviors in field and controlled experimental contexts. Neuromarketing methods are required to observe and measure the strength of nonconscious goals in action.

Low-Attention Processing Another counterintuitive finding that is important to neuromarketing is the discovery that attention may not be good for advertising effectiveness. Attention would seem to be a necessary condition for advertising effectiveness, but brain research has shown that “obvious” truth to sometimes be at odds with the realities of System 1 processing, emotional responses, conditioning, and implicit memory. Ads that rely on emotional connections and repetitive conditioning to reinforce brand associations can paradoxically have a greater effect on us when we aren’t paying attention to them than when we are. As described in Chapter 11, low-attention processing operates as part of the indirect route to advertising effectiveness. Unlike logical persuasion, conditioning does not require attention to create memories and learning. On the contrary, research shows that attention may actually inhibit effective conditioning, because it can trigger counterarguing in the mind of the viewer. Nothing kills the impact of an amusing ad more than stopping to realize just how illogical its basic premise actually is. Leveraging low-attention processing does not make sense when advertising a new product, or when trying to convince people to take a direct action, like make a donation or call a toll-free number. But more and more campaigns appear to be embracing the low-attention processing model to build more positive associations with brands without communicating any kind of explicit persuasive message. To the extent that resistance to marketing and persuasive appeal is high, marketing that takes advantage of the low-attention processing principle will provide an alternative way for marketers to build product and brand relationships with consumers.

Implicit Memory Implicit memory is another amazing nonconscious process that underlies many neuromarketing principles and measurement techniques. Because we naturally think of memorization as effortful, the idea that our brains can constantly record limitless amounts of information without any conscious effort is at first hard to accept. But upon reflection, it seems inevitable. How else can we remember where we put the keys, how to ride a bike, or how to find our way back to that new Starbucks we discovered yesterday?

Chapter 24: Ten Scientific Pillars Underlying Neuromarketing As we show in Chapter 11, implicit memory has some extraordinary properties: ✓ Whereas explicit memory requires effort, fades relatively quickly, and has to be reinforced regularly, implicit memory is triggered effortlessly and appears to last indefinitely. ✓ Implicit memory operates automatically, outside our conscious awareness, so we have no direct control over it. ✓ Implicit memory doesn’t depend on attention. ✓ Implicit memory has a huge capacity compared to explicit memory. A final important property of implicit memory is that it can’t be voluntarily recalled, so it’s invisible to all methodologies that rely on self-reported recall. The only way it can be measured is by using indirect neuromarketing techniques like the word-completion task described in Chapter 13.

Implicit Decisions As we establish in Chapter 1 and elaborate on throughout this book, human brains are cognitive misers — thinking is hard and we try to avoid it if we can. A particularly difficult task is making decisions. So, it should come as no surprise that we’ve adopted emotional cues and triggers as decision-making aids to give our cognitive-miser brains easy shortcuts to make decisions quickly and without a lot of cognitive exertion. Implicit decisions occur when we bypass conscious deliberation and make the mental leap from nonconscious impressions and reactions to choice behavior. As we saw in Chapter 8, implicit decisions are driven by automatic, effortless, System 1 processes that often don’t feel like decisions at all. Because they bypass conscious deliberation, they’re experienced without any internal questioning or weighing of arguments, so they’re immune to classic persuasive messaging. This, of course, creates some problems for advertisers who believe they need to rely on persuasive messaging to influence behavior. The reality of implicit decisions creates an even more fundamental risk for traditional research techniques. When people make implicit decisions, they don’t have access to the sources of their decisions. This in itself is a big challenge — one that neuromarketing addresses with alternative techniques. But the bigger problem is that people don’t know that they don’t know why they make implicit decisions, so they query their memories and come up with plausible explanations, which they report to researchers and sincerely believe to be true. Unfortunately, these stories tend to be rationalizations, not explanations, and they often produce poor predictions of future behavior as a result.

377

378

Part VI: The Part of Tens

Reverse Inference Our final top-ten scientific foundation for neuromarketing is the logic of reverse inference, which we introduce in Chapter 19. Reverse inference may seem like a simple logical puzzle, but it’s fundamental to the core logic of neuromarketing. It provides the bridge between academic research in the brain sciences and the practical application of that research in neuromarketing. Reverse inference tells us how much confidence we should have in a neuromarketing finding expressed in the form: “This brain or body response has occurred; therefore, this mental state has taken place.” For example, if we observe with facial expression analysis software that a person has smiled while watching an ad (a body response), what is the likelihood that the ad made that person happy (a mental state)? The logic of reverse inference says that this likelihood can never be 100 percent. Suppose a statement has been validated by evidence from 1,000 studies: All people who feel happy while watching an ad display a smile. Even all this evidence does not logically justify the reverse inference: This person smiled while watching an ad; therefore, the ad made them happy. Reverse inference tells us that any neuromarketing finding is probabilistic (based in part on chance), never certain. The degree to which you should believe a neuromarketing finding depends on the weight of the existing evidence supporting the inference, combined with your confidence that the experiment was properly designed and conducted so that alternative causes of the observed results were controlled for. If you’re satisfied that the experiment was sound, you should have increased confidence that the reverse inference is true, but you can never be 100 percent certain that it’s true — you can only be more certain than you were before the experiment was performed.

Index •A• accessibility defined, 25 leading brands, 149–150 nonconscious goal pursuit, 121 priming, 121, 126–127, 373 problems, 25 processing fluency, 121 product innovation, 43–44 spontaneity, 121 System 1 decision making, 121 accountability, 354–355, 367–368 accreditation, vendor, 252–253, 352–353 acquired skills, 30 action step in advertising, 23–24 action units (AU), FACS, 253 advertising effectiveness. See also direct route, advertising effectiveness; indirect route, advertising effectiveness ARF standardizing, 346, 351–352, 369 attention, 100–101, 181, 184–186, 187–188, 376 monitoring emotional reactions, 188 persuasion, 182 primes, 363, 372 product placement, 56–57, 227–229, 231, 372 public service, 355–356 recall, 182–183 research approaches, 45–46 testing, 47–48, 188–189, 288–289 views, 176 advertising effectiveness, online. See also web pages/websites control, 205–206 ease of purchase, 207 effectiveness, testing, 216–217 findings, 211 frustrations, 209–211 goal alignment, 206–207 interactivity, 204–206 nonconscious processing, 211–212 salient page features, 208–209 versus on TV, 204–205 Advertising Research Foundation (ARF), 339, 346, 351–352, 369 affect judgment heuristics, 128, 131, 282 affect/affective states, 95, 128, 373. See also emotions

affective conditioning, 185 affective priming, 41, 155, 270, 271 age group comparisons, testing, 322 aggregators, 213 agreeableness bias, 238 AIDA persuasion model, 23–24, 176–178 alpha frequency band, brain waves, 264 American Association for Public Opinion Research, 351 amplitude, ERPs, 265 anchoring effect, 199 anchoring judgment heuristics, 127, 134, 281 ANOVA (analysis of variance), 309 ANS (automatic nervous system), 250–251 anthropological studies, 247–248 anticipating the future step, deliberation process, 30 Apple brand, 44, 146, 168 approach and avoidance behaviors body-state changes, 98 brand motivational goal activation, measuring, 156 defined, 286 in product innovation, 163 propensity, 122 shopping, 115–116 triggers, 95, 96, 99 ARF (Advertising Research Foundation), 339, 346, 351–352, 369 Ariely, Dan, 133, 145 arousal response, 15, 90, 96, 97, 155 artifact correction of brain signals, 263 associations, brand, 41, 146, 154. See also brand/branding associative activation, 82–83, 106–107, 154, 270. See also priming associative priming, 84, 108–109, 167, 271, 372 asymmetry, brain, 264 attention. See also bottom-up attention; topdown attention in advertising, 23–24, 100–101, 184, 376 as cognitive function, 10 defined, 286 indirect-route advertising, 184–186, 376 master variable in research, 89–90, 99–101 tracking, 187–188 types, 181 AU (action units), FACS, 253

380

Neuromarketing For Dummies auditory sense, 254 authority principle, persuasion, 131 automatic nervous system (ANS), 250–251

•B• banner ads, 210, 212 banner blindness, 210 BAS (behavioral activation system), 196 Baumeister, Roy, 75, 95, 98 Bayesian inference, 310–311 beauty, processing fluency, 78, 165–167 behavioral economics, 9, 65, 281–282, 335 behavioral experiments examples, 280 key elements, 280–281 overview, 16 purpose, 290–291 setting up, 279 behavioral guidance system, 79–80, 88. See also nonconscious mind behavioral inhibition system (BIS), 196 behavioral response-time studies affective-priming, 270, 273–274 basis, 258–259 brand equity, 154 focus, 290 IAT findings, 271–272 overview, 16, 252 semantic-priming, 272–274 types of, 270–271 behavioral studies, 51, 155, 201, 233, 287. See also behavioral experiments; behavioral response-time studies benchmarks, comparative. See normative data benefits of neuromarketing, 64–69 Berger, Jonah A., 127 best practices, 334 beta frequency band, brain waves, 264 biometric measures. See body measures BIS (behavioral inhibition system), 196 blinking, 173, 255–256 blood oxygenation level dependent (BOLD), 260 blood pressure, 258 body measures. See also behavioral responsetime studies; eye tracking; facial expressions blood pressure, 258 electrodermal activity, 257 embodied cognition, 96–97 focus, 291 heart rate/respiration, 15, 252, 257–258 nervous system, 251–252

overview, 14–15 as part of marketing plan, 266–267 specialists, 335 types, 252–253 uses, 291–292 BOLD (blood oxygenation level dependent), 260 bottom-up attention. See also attention; topdown attention defined, 42 emotion, 99 new products, eliciting, 159–160 research, 89–90 website scanning, 53, 208 brain. See also cognitive misers defined, 10 innate preferences, 165 insular cortex, 261 versus mind, 10 motor cortex, 221 parts, 80–81 prefrontal cortex, 10 primary olfactory cortex, 221 sensory cortex, 221 brain measures. See also EEG ; fMRI blood flow, 251–252 CNS activities, 250–251 electrical, challenges of, 262–263 electrical fields, 251–252 mangetoencephalography, 16, 266 overview, 15–16 as part of marketing plan, 266–267 positron emission tomography, 262 brain response methodologies. See also fMRI brain science findings. See also System 1 decision making acting, 31–33 beauty, 78, 165–167 creating connections, 28–29 decision making steps, 26–27 deliberating, 29–31 forming impressions, 27 innate preferences, 164–165 negative emotional reactions, 160–161 novelty and familiarity balance, 158–160 positive emotional reactions, 162–164 predictability, 195 brain signal techniques, 15–16 brain-wave frequency analysis, 263–264 brand agnostics, testing, 322 brand loyalist, testing, 322 brand/branding associations, 41, 146 building, 147–149 conceptual consumption, 145–147

Index consumer impact, 39 defined, 139, 147 emotions, 41 equity, 39, 142, 154–156, 179 functions, 149 leading, 40, 149–151 memory, updating, 143–144 memory links, 38–39, 140–142, 228–229 motivations, 41 overview, 140 placebo effect, 39, 67, 143–144 research, 13, 37–38, 140 testing, 41, 153–156 business strategies, 16 buy button myth, 62–63, 361–362 buying, online, 213

•C• calculating step, deliberation process, 30 call-to-action advertising, 46 categorizing items, for consumers, 199 central nervous system (CNS), 250–251 choice architecture, 134, 287, 356 choice tasks in shopping, 173–174 choosing products, shopping, 50 Cialdini, Robert, 131 classical conditioning, 185 CNS (central nervous system), 250–251 code of ethics, 344. See also ethical principles cognitive load, 187, 256 cognitive misers brains as, 125–126 consumer behavior, 74 defined, 11, 73, 377 judgment heuristics, 128 mental efficiency, 74–75 nonconscious tactics, 81–82 Cohen’s d statistic, 312 coherence, EEG brain-wave analysis, 264 commercials versus online ads, 204–206 commitment and consistency principle, persuasion, 131 comparative benchmarks. See normative data competitive stimuli, 321 concept formation step in neuromarketing model, 26, 28–29 conceptual associations, 186 conceptual consumption, 145–147 conceptual primes, 374 concerns about neuromarketing advertising focus, 368 buy button, 62–63, 361–362

creativity loss, 365 mind control, 63–64, 362–365 misuse, 366–367, 368–369 privacy invasion, 61–62 traditional marketing, end of, 365–366 unscientific nature, 367–368 conditionality, influence, 363 conditioning advertising, response to, 185 advertising goal, 179 affective, 185 classical, 185 defined, 47 elements of, 148 guidelines to promote, 148–149 implicit memory process, 141, 142 new products, 160 types of, 185 confabulations, 32, 237 confidentiality, partners, 341 conscious accessibility, 25 conscious mind, 81–82, 86–88. See also System 2 decision making conscious-nonconscious processing model, 26, 129 conservation of information, aesthetic principle, 166 construct validity, 302 consultants, 18, 331–332, 333–334 consumer cycle, 293–294, 337 consumer decision making buy button myth, 62–63, 361–362 explicit decisions, 123, 125 goal pursuit, 49, 111–113 habit in, 135–136 implicit decisions, 123, 125–126, 132–133 intuitive system, 121–122 judgment heuristics, 127–130, 133–135 limitless choice effect, 215 misattribution, 374–375 nonconscious elements, 126–127 persuasion limits, 130–131 somatic market hypothesis, 124 consumer models. See intuitive consumer model; rational consumer model consumer panels in market research, 247 consumer surveys improving, 246 overview, 24, 241 risks, 245–246 traditional research technique, 24, 241 uses, 245 value, 365–366

381

382

Neuromarketing For Dummies consumers. See also intuitive consumer model; rational consumer model nonconscious goal pursuit implications, 114–115 shopping behavior, 48–49, 195–197 subcategories for study, 322–323 zombie, 63, 85–86, 362 consuming, consumer cycle, 294 contrast and clarity, aesthetic principle, 166, 374 convergent validity, 303 correction goals, 113 corrugator supercilii, 97–98, 254 credit cards, 50 crowdsourcing, 16, 274, 278–279

•D• Damasio, Antonio, 93–94, 124, 373 day-after recall, 302 decision influences. See judgment heuristics; priming; processing fluency decision making. See consumer decision making; System 1 decision making; System 2 decision making decoy items, 134, 200 default bias judgment heuristics, 128, 281, 357 delay payment, 200 deliberate judgments, 122 deliberation process, 29–30 deliberative decision-making system. See System 2 decision making delta frequency band, brain waves, 264 demographic segmentation, 195 dependent variable, experiments, 298 Descartes’ Error: Emotion, Reason, and the Human Brain, 93 design. See neurodesign desire step in advertising, 23–24 desk research, 334 digital video recorders (DVRs), 175, 228 direct route, advertising effectiveness AIDA model, 23–24, 176–178 attention, 181 challenges, 46–47, 177–178 versus indirect, 183 online shopping, 206–207 persuasion, 182 purpose, 177 recall, 182–183 directly relevant experience, partners, 340 discrete emotions, 96, 286 discriminant validity, 303 disgust reaction, non-food products, 161 dissociation in goal pursuit, 106–107

doing the shopping, 193–194 dominance in focus groups, 244 dual-process theory of mental activity. See System 1 decision making; System 2 decision making DVRs (digital video recorders), 175, 228 dwell time, 198

•E• EDA (electrodermal activity), 15, 57, 232, 252, 257 education, neuromarketing and, 357–358 EEG (electroencephalography) approach/avoidance response, 116 attention to ads, 47–48, 187 brain-wave frequency, 263–264 brand equity, measuring, 41, 155 complexity, 292 emotions, monitoring, 188 entertainment effectiveness testing, 58, 233 in-lab testing, 51, 202, 295–296, 337 online ads, testing, 216 overview, 15–16, 41, 263 purpose, 292 shopping, tracking challenges, 201 specialists, 335 effect size testing, 310 effects, gaming, 57, 231–232 ego depletion, 75 ego threats primes, 109 Ehrenberg, Andrew, 136 Ekman, Paul, 253, 276 elasticity of advertising, 33 electrodermal activity (EDA), 15, 57, 232, 252, 257 electroencephalography. See EEG electromyography. See EMG embodied cognition, 96–97 EMG (electromyography) emotional responses, 41, 47–48, 155, 188 entertainment effectiveness, 57–58, 232 facial response, 254 online ads, 216 emotion access bias, 239 emotional arousal, 57–58, 100, 233, 286 emotional markers. See somatic markers emotional valences affective-priming studies, 270 attention, triggering, 100 defined, 14, 162 entertainment, 57, 232 micro-valences, 90, 162 natural assessments, 122 testing, 57–58

Index emotions affect/affective states, 95, 128, 373 appeal to, 185 attention, 99–101 Baumeister on, 95–96, 98–99 body state link, 96–98 brand associations, 154 conscious versus nonconscious, 95–96, 373 Damasio on, 93, 373 discrete, 96, 286 master variable in research, 90, 99 memory, 101–104 monitoring, 188 research, neuromarketing, 90 survival necessity, 98–99 empathy, 97, 220, 231 endowment effect judgment heuristics, 128, 282 entertainment effectiveness movie trailers, 225–226 movies, 56, 224–225, 227 overview, 14 product placement, 227–229, 231 responses, measuring, 57–58, 232–233, 288–289 stories/narratives, 55–56, 220–223 synchronization, brain, 224–225 video games, 57, 230–232 episodic memory, 141–142 ERPs (event-related potentials), 155, 265, 292 errors in experiments, 300–301 ESOMAR, 340, 346, 369 ethical principles guidelines, source, 344 protecting rights of participants, 19, 344–346 providing evidence of validity and reliability, 19, 347–349 representing research accurately, 19, 346–347 ethnographic studies, 247–248 evaluating/judging step, deliberation process, 30 event-related potentials (ERPs), 155, 265, 292 expectancy violation, 76, 100, 121 expectations, brand, 143, 145, 167 expected probability, 311 experimental designs error types, 300–301 overview, 246–247 questions, essential, 17, 298–299 strategies, 301 variabilities, 299–300 experimental process errors bias, 304–305, 307 noise, 304 explicit decisions, 123, 125. See also System 2 decision making explicit learning, 91

explicit memory advertising appeal, 183 defined, 38, 140 episodic, 141 versus implicit, 140, 377 semantic, 141 eye tracking blinking, 173, 255–256 eye movements measured, 173, 252, 255 overview, 15, 16 pupil dilation, 256–257 research areas, 47, 51, 116, 187, 201 specialists, 335–336 startle reflex, 256 task focus importance, 44–45 webcam-based, 275–276, 290 EyeTrackShop, 275

•F• Facial Action Coding System (FACS), 253–254 facial coding, 276 facial expressions body measure, 41, 252 brands, responding to, 155 emotions, monitoring, 188 interpreting, 253–254 online ads, testing, 216 online tracking, 276 overview, 14 studying, 16 universal, 253 facial imaging, 276 facial recognition software, 48 facilitation process, conceptualization, 28–29 FACS (Facial Action Coding System), 253–254 false leads in focus groups, 244 familiarity affect heuristic, 131 decision making, 120 design, 42 effects on brain, 76–77 versus novelty, 158–159 processing fluency, 78 in product innovation, 163, 171 feelings, 95, 373. See also emotions figure-ground contrast, 166 finding products, shopping, 49–50 first steps, fundamental equation of successful change, 329–330 Fitzsimons, Gráinne, 127 fixations per second (fps), eye tracking, 173, 187, 255

383

384

Neuromarketing For Dummies flashbulb memories, 102 fMRI (functional magnetic resonance imaging) brain measure, 41, 259 brand equity, measuring, 39, 155 complexity, 292–293 entertainment effectiveness testing, 58, 233 functions, 260, 293 limitations/cautions, 260–261 online ads, testing, 216 overinterpreting results, 346–347 overview, 15 specialists, 335 uses, 260 focus groups limitations, 169–170, 243, 244, 366 overview, 24, 241, 242 uses, 243–244 value, 365–366 focus of visual attention standards, 351 forced-choice testing, 45, 174, 277, 319 forming intentions step, deliberation process, 30 forward inference, 305–306 foveal vision, 210 fps (fixations per second), eye tracking, 173, 187, 255 framing judgment heuristics, 127–128, 131, 281 free speech, 354 frequency bands, brain waves, 264 full disclosure, 345, 347 functional magnetic resonance imaging. See fMRI fundamental equation of successful change, 328–330

•G• galvanic skin response (GSR), 257 gamification, 16, 276–278 gamma frequency band, brain waves, 264 gaze paths, 255 gen pop sample for testing, 321 gender comparisons, testing, 322 generalizability, measurement theory, 303–304 goal activation, 131, 164, 228 goal contagion, 110, 161 goals. See also nonconscious goal pursuit characteristics, 107 conceptual consumption, 145–147 conscious versus nonconscious, 107–108 decision making, 120, 121 defined, 105–106 online searching, 206–207, 213 primes for triggering, 109–110 shopping online, 206–207

going shopping, 193–194 Goldilocks effect, innovation, 171 groupthink in focus groups, 244 GSR (galvanic skin response), 257 gustatory sense, 254

•H• habits accessibility, 121 buying, 151 decision making, 121 leading brands benefiting, 150–151 versus motivations, 117–118 versus persuasion, 135–136 rigidity, 31, 135–136 habitual buying, 150–153 “The Habitual Consumer” article, 135 heart rate, 15, 252, 257–258 hemispheric asymmetry, EEG, 264 heuristics, 281–282. See also judgment heuristics hierarchy of effects in advertising, 23–24, 176–178 high attention processing model, 100, 181. See also direct route, advertising effectiveness hypotheses, neuromarketing studies, 317–319

•I• IAT (Implicit Association Test), 41, 154, 271–272 Illes, Judy, 344, 347 immersive experiences, 223, 230–231 implicit associations, 286 implicit decisions. See also System 1 decision making consumer decision making, 125–126 judgments heuristics, 133–135 measuring, challenges of, 377 versus persuasion, 132 prevalence, 133 somatic markers in, 124 System 1 processes, 123, 377 types, 123 implicit learning, 91 implicit memory. See also conditioning; priming brand memories, 38–39, 140–142, 228–229 versus explicit, 140, 377 formation, 186 marketing appeal to, 39 nonconsious, 38 online ads, 211–212 procedural, 141

Index processes, 141–142 product placement, 227–229 properties, 377 implicit pattern recognition in beauty, 167 impression formation step in neuromarketing model, 26, 27 independent variables, experiments, 299 indirect route, advertising effectiveness attention, 184–186 conditioning, 47, 179 versus direct, 183 effectiveness, 47, 179–180 overview, 46, 47–48, 176 purpose, 179 testing, 47–48 two-step model, 179 individual differences in social situations primes, 109 inferential power of test, 321 influence, 363 information patch websites, 213 in-lab testing, 51, 202, 295–296, 337 innovation. See novelty Institute of Practitioners in Advertising (IPA), 185 institutional/independent review board (IRB), 62, 341 in-store research, 50–51, 200–201, 295, 337 insular cortex, 261 intangible value, 66–67 integrated solution generalists, 337–338 integrated studies, market research, 295–296, 337–338 interest step in advertising, 23–24 Internet. See also online services; shopping, online; web pages/websites ad and goal alignment, 52, 206–207 buying, 53, 54, 207, 213 changes, 212–213 control, 52, 204–206 interactivity, 52, 204–206 online experience, researching, 54–55 searching, 54, 212–214 sharing, 54, 214 interpreting the past step, deliberation process, 30 interviewer, 24 interviews guidelines, 239–240 limitations, 242 overview, 24, 240–241 response biases, 238–239 uses, 241–242

intuitive consumer model advertising effectiveness, 47–48 characteristics, 35–36 consciousness, 87–88 decision making, 81–82, 120–121 familiarity, 76–77 goals for marketers, 118 habits, 117–118 mental efficiency, 74–75 motivation, 117 novelty attraction, 75–76 preferences, 126–127 priming, 82–86 processing fluency effects, 78–79 intuitive decision-making system. See System 1 decision making intuitive implicit decisions, 123 intuitive judgments, 122 inverse problems with electrical measures, 262 IPA (Institute of Practitioners in Advertising), 185 IRB (institutional/independent review board), 62, 341 isolation in stories, 223

•J• Jones, John Philip, 178 judgment heuristics activating in marketplace, 133–134 conscious-nonconscious processing model, 129 consumer decision making, 128–130 defined, 119, 127 examples, 127–128 versus persuasion, 133–135 weaknesses, 129 judgments, 122. See also judgment heuristics justifying evaluations, rational consumer model, 30

•K• Kahneman, Daniel, 34, 74, 121–122, 127, 129, 133, 177, 179 Klein, Gary, 133, 323 knowledge exposure bias, 238

•L• lab-based studies, 51, 202, 295–296, 337 lack of awareness in stories, 223

385

386

Neuromarketing For Dummies landing pages, ads, 207 latencies (time delays), 259, 265 layaway plans, 50 lazy control, conscious mind, 74–75, 372 leading brands, 40, 149–151 learned codes, 160 learning, processing fluency, 78 legal issues, 353–355 liking principle, persuasion, 131 locationism, fMRI, 261 long-term memory, 141 loss aversion judgment heuristics, 127, 131, 281, 293 low attention processing model, 101, 181, 183–184, 376. See also indirect route, advertising effectiveness

•M• magnetoencephalography (MEG), 16, 266 mammalian brain, 80 market mix modeling, 33 market research complementary methods, 248 consumer panels, 247 consumer surveys, 24, 241, 244–246 experimental designs, 246–247 focus groups, 169–170, 242–244 integrated studies, 295–296, 366 interviews, 24, 238–242 versus neuromarket, 94 observational studies, 247–248 rational consumer model basis, 23–25 response biases, 238–239 Theory of Planned Behavior guidelines, 239–240, 245 marketing consumer cycle element, 294 criticisms of, 60–61 versus neuromarketing, 8 perspective, 69 using neuromarketing, 12–14 Marketing Research Association, 351 master variables in research, 89–91, 99–100. See also attention; emotions; memory mean in tests, 309 measurement. See also body measures; brain measures; specific types of measurement bias/errors, 300, 304–305, 307 noise, 304 theory, 17, 302–305 MEG (magnetoencephalography), 16, 266

memory. See also explicit memory; implicit memory activation, 286, 302 advertising role, 182–183 bias, 239 brand, 140–142, 143–144 constant construction, 102–103 emotional markers, 104 master variable in research, 89–91, 99–100 Mlodinow on, 103–104 research, 91, 104 role of emotions in, 101–102 types, 141 memory retention studies, 278 mental efficiency, 74–75 mere exposure effect, 77, 166 micro-valences, 90, 162 Millisecond Software, 272 mimicry, 97 mind. See also nonconscious mind versus brain, 10 conscious, 81–82, 86–88 efficiency, 74–75 familiarity effects, 76–77 memory types, 140–141 novelty effects, 75–76 processing fluency, 78–79 mirror neurons, 55–56, 220 misattribution, 374–375 misinformation bias, 238 Mlodinow, Leonard, 87, 103–104 mobile research, 295 monadic testing design, 319 money-back guarantee, 50, 200 moods, 95 motivational priming, 84, 108–109, 271 motivations. See also goals approach-avoidance, 115–116 brand associations, 41, 154 consumer, 115–116, 117–118 emotional dimension, 90, 96 nonconscious, 106–107 motor cortex, 221 movie trailers, 225–226 movies, 56, 224–225, 227 Murphy, Emily R., 344, 347

•N• natural assessments approach-avoidance propensity, 122 emotions, 122, 125

Index measuring, 254 nonconscious brain process, 29 physical properties, 121 System 1 decision making, 121–122 Neal, David T., 135 nervous system, 249–251 neurocinematics, 56 neurodesign. See also processing fluency; product innovation aesthetic responses, 42–43 beauty, objective features, 165–166 beauty, subjective elements, 166–167 defined, 66, 164 examples, 168–169 innate preferences, 165 “Neuroethics of Neuromarketing” article, 344 neurographic segmentation, 195–196 neuro-idolatry, 368 neuroimaging technologies, 251 neurological measures. See brain measures neuromarketing. See also concerns about neuromarketing benefits, 64–69 defined, 8 key steps, 25–27 purposes, 366–367 traditional marketing compatibility, 365–366 neuromarketing studies. See also experimental designs; normative data; partners, neuromarketing; statistical testing consequences, determining, 323–324 elements, 16–17 ethical considerations, 18–19, 344–349 hypotheses, 317–319 key questions, 17–18, 319 measurement theory, 17, 302–305 objectives, identifying, 316–317 population samples, 321–323 stimuli, 319–321 neurometric measures. See brain measures neuroscience, 9, 56, 106 neuro-standards, 350–352 new product innovation. See product innovation NMSBA (Neuromarketing Science & Business Association), 339, 346, 351 nonconscious goal pursuit accessibility, 121 implications, 114–115 motivation and habits, 115–118 movie trailers, 226 nature of, 375 overview, 111–112 persuasion correction goals, 113, 375

phases, 108 product preference and choice, 112 shopping behavior, 113 studying, 376 willpower depletion, 117 nonconscious mind. See also System 1 decision making assumptions, faulty, 364–365 behavioral guidance system, 79–80, 88 brain layer, 80–81 conceptual consumption, 145–147 decision making, 81–82, 120 defined, 10 emotional markers, 93–94 mind-control assumption, 61–62, 63–64, 362–365 normalized data, 312 normative data database, 348 defined, 312 importance, 312, 313 versus normalized data, 312 overview, 17 Norton, Michael, 145 novelty assumptions, faulty, 365 in decision making, 120 design, 42, 43–44 effects on brain, 75–76 versus familiarity, 158–159 Nudge: Improving Decisions About Health, Wealth, and Happiness, 356 null hypothesis, 310

•O• objectivist view, aesthetics, 165–166 objects and messages primes, 110 observational research, 295, 337 olfactory sense, 254 online services gamification, 16, 276–278 measuring responses, 275–276, 288–289 research, 16, 274, 295, 337 specialists, 336

•P• pain, fundamental equation of successful change, 328–329 parafoveal vision, 210 partition, experiments, 299

387

388

Neuromarketing For Dummies partners, neuromarketing accreditation, 352–353 choosing, steps for, 338–341 consultants, 18, 331–332, 333–334 integrated solution generalists, 337–338 organizational readiness, assessing, 328–331 technology specialists, 335–336 validity and reliability evidence, 348–349 vendors, 18, 331–333 payment options, 50, 200, 207 people primes, 110 Pepsi Challenge, 144 perceptual associations, 186 perceptual primes, 374 performance research, 295, 337 peripheral cue, 205 peripheral nervous system (PNS), 250–251 periphery of web pages, 210 personally meaningful objects and marks primes, 110 persuasion AIDA model, 23–24, 176–178 challenges in marketing, 132–133, 182 versus habit, 135–136 versus judgment heuristics, 133–135 movie trailers as, 225 place in marketing, 133 principles, 131 stories as, 55, 220–221, 222–223 persuasion correction goals, 113, 375 PET (positron emission tomography), 262 physiological measures. See body measures placebo effect, 39, 67, 143–144 planning step, deliberation process, 30 planograms, 202 PNS (peripheral nervous system), 250–251 population samples for testing, 321–323 POS (point of sale) research, 32, 295, 337 positron emission tomography (PET), 262 posterior probability, 311 power, EEG brain-wave analysis, 264 The Power of Intuition: How to Use Your Gut Feelings to Make Better Decisions at Work, 133, 325 preconscious mind, 10 predictability, shopping experience, 195 Predictably Irrational, 133 prediction bias, 239 prediction markets, 278–279 preference access bias, 239

preferences. See also judgment heuristics defined, 287 intuitive consumer model, 126–127 rational consumer model, 126 prefrontal cortex of brain, 10 pre-mortem exercise, 323 presence in games/simulations, 57, 230 prevention focus, personal, 196 pricing to simplify choice, 199 primary olfactory cortex, 221 primes advertising, 363, 372 conceptual, 374 defined, 82 entertainment, 227 goal pursuit, 109–110 in-store, 49–50, 198 messages, 110 movie trailers, 226 movies, 56, 227 objects, 110 people, 110 perceptual, 374 response-time studies, 270 social situation, 109 subliminal, 113 priming accessibility, 121, 126–127, 373 associative, 84, 108–109, 167, 271, 372 defenses against, 85–86 defined, 82, 286, 372 implicit memory activation, 141 motivational, 84, 108–109, 271 nonconscious goal influencing, 106–107, 114–115, 120, 286 priming effect, 83 privacy concerns, 61–62 probabilities, influence, 363 procedural memory, 141 processing fluency accessibility, 121 beauty, 78, 165–166 conceptual consumption, 145 defined, 78, 164, 373–374 design, 42–43, 65, 164–169 effects, 78–79, 374 prior experiences, 166–167 product innovation, 163 qualities that promote, 78–79 testing, 320 tips, 79 product contagion, 161

Index product innovation attracting attention, 159–160 balancing novelty with familiarity, 43–44, 158–159 creating positive associations, 162–164 establishing context, 160–161 focus group weaknesses, 169–170 measuring emotional response, 44–45, 163–164 moderating innovation, 44, 170–172 product placement, 56–57, 227–229, 231, 372 promotion focus, personal, 196 PSA (public service advertising), 355–356, 367 psychographic segmentation, 195 public policy, 356–357 pupil dilation, 256–257 pupil size, eye movements, 173 pupillometry, 256

•R• rational consumer model advertising/marketing, 23–24, 176–177 advertising/marketing challenges, 177 characteristics, 22–23, 120 market research methods, 24–25 preferences, considerations, 126 rationalizing step, deliberation process, 30 realism in stories, 223 reasoning step, deliberation process, 30 recall, memory, 91, 182–183 reciprocity principle, persuasion, 131 recognition, memory retrieval, 91 recognition studies, gamification, 277–278 reflexive implicit decisions, 123 regressive saccades, eye movements, 255 regulatory fit in value and consumption, 145 regulatory focus, personal, 196 Reiner, Peter B., 344, 347 reliability in experiments, 17, 302–305, 347 repeatability, experiments, 303 repetition, 172, 176, 179, 185 reptilian brain, 80 research, neuromarketing. See also specific research fields; attention; emotions; memory cost-benefit analysis, 282–283 guidelines, 283 variables, three master, 88–91 research participants full disclosure considerations, 345 population samples, 321–323 published ethical guidelines, 345–346

subject protection considerations, 344–345 vulnerable and protected populations considerations, 345 resistance to change, 330 respiration/heart rate, 15, 252, 258 respondents in interviews, 241, 322 response-time studies. See behavioral responsetime studies retrieving memories step, deliberation process, 30 return on investment (ROI) research, 295, 316, 327, 337 reverse inference in applied science, 306–307 versus forward, 305–306 handling, 308 interpreting risk, 261 overview, 17 probabalistic nature of findings, 378 reverse priming, 85–86 rewards program, 200 risk, processing fluency, 78 ROI (return on investment) research, 295, 316, 327, 337

•S• saccades, eye movements, 173, 255, 276 saliency map, 208 scarcity principle, persuasion, 131 scientific openness, partners, 340–341 SCR (skin conductance response), 257 scrutiny, processing fluency, 78 search advertising, 206 search tasks in shopping, 173 searching, online, 54, 212–214 self-reporting methods, 24–25, 31–32, 209, 248. See also consumer surveys; focus groups; interviews self-selection bias, 299 semantic memory, 141–142 semantic priming, 41, 154, 270–271 sensory cortex, 221 sensory inputs, 250 sensory memory, 141 sequential monadic design, 319 sharing, online, 54, 214 shoppers. See consumers shopping, in-store approach-avoidance motivation, 115–116 choice, simplifying, 49–50, 198–200 consumer cycle, 294

389

390

Neuromarketing For Dummies shopping, in-store (continued) consumer personality, impact, 49, 195–197 essential elements, 48–49, 197 experiments, behavioral, 279–281 goals, pursuing, 49, 193–194 overview, 191–192 payment, minimizing pain, 50, 200 priming, 49–50, 197, 198, 372 products, finding, 49–50, 197, 198 research areas, 13, 192–193, 295 research methods, 288–289 testing, in-lab, 51, 202 testing, in-store, 50–51, 200–201, 295, 337 testing, virtual reality, 51, 202 shopping, online. See also web pages/websites advertising approach, 206–207 buying ease, 207 control, 204–206 experiments, behavioral, 281 interactivity, 204–206 landing pages, 207 limitless choice, 215 marketing research on, 216 research challenges, 203–204 shopping momentum, 199 short-term working memory, 141 sight, appeal to, 192 significant others primes, 110 simulations deliberation process, 30 story effect, 56 understanding and anticipating, 97 video games, 57, 230–232 single-threaded processes, 122 situational factors in consumer behavior, 9, 12 skin conductance response (SCR), 257 smell, appeal to, 193 SNS (somatic nervous system), 250 social desirability bias, 238 social networking, 54, 214 social norms primes, 110 social proof principle, persuasion, 131 social psychology, 9 social situational primes, 109 socially triggered rules primes, 110 somatic markers affective states, 95, 373 attention source, 99–100 brand association, 185–186 consumer decision making, 94, 120 Damasio hypothesis, 124, 373 defined, 93, 373

memory activation, 104 survivor value, 94 somatic nervous system (SNS), 250 sound, appeal to, 193 spatial resolution, 262 speaking and acting step, neuromarketing model, 26, 31–34 spendthrifts, 196–197 spontaneity, System 1 decision making, 121 SSVEP (steady-state visual evoked potential), 265 standardization advertising response variables, 351–352 ARF (Advertising Research Foundation), 346, 351–352, 369 importance, 352 research design and delivery, 352 standards, 350 standards bodies, 351 vendor accreditation, 352–353 standardized measure, 321 startle effect, eye movements, 256 states, emotional, 195 statistical significance, 17, 309–310 statistical testing analysis of variance, 309 Bayesian inference, 310–311 effect size, 310 statistical significance, 17, 309–310 t-test, 309 steady-state topography (SST), 265–266 steady-state visual evoked potential (SSVEP), 265 stereotype activation and resistance primes, 110 stimuli for testing, 9, 319–321, 373 stories/narrative appeal of, 55–56, 220–221 brain activation, 221, 224–225 empathy, 55, 221 pacing impact, 222 persuasion, 55, 220–221, 222–223 product placement, 227–229 structure, 223 video games, 230 strategic research partner, 332 subconscious mind, 10 subjectivist view, beauty, 165, 166–167 subjects in research, 24, 298–299 Subliminal: How Your Unconscious Mind Rules Your Behavior, 87, 103 subliminal messages, 362

Index subliminal primes, 113 Sunstein, Cass, 356 surveys. See consumer surveys symmetry, aesthetic principle, 166, 374 synchronized brain responses, 224–225 System 1 decision making. See also implicit decisions effortlessness, 121–122 interactions with System 2, 74–75, 122, 371–372 intuitive response, 34 spontaneity, 121 System 2 decision making deliberate control, 122 effortfulness, 122 interactions with System 1, 74–75, 122, 371–372 judgments, 122 lazy control, 74–75, 372 logical reasoning, 34 single-threaded processes, 122 systematic error, 301, 304

•T• tactile sense, 254 talk-aloud research method, 209 target, priming, 270 taste, appeal to, 193 technology specialists, 335–336 temporal resolution, fMRI, 260 temptations primes, 109 testing. See also body measures; brain measures advertising, 47–48 emotional valences, 57–58 entertainment effectiveness, 57–58, 232–233 forced-choice, 45, 174, 277, 319 in-lab, 51, 202, 295–296, 337 in-store, 50–51, 200–201, 295, 337 online ads effectiveness, 216–217 virtual reality, 51, 202 website, ease of use, 217 test-retest reliability, 242 Thaler, Richard, 356 theoretical constructs, validity, 302 Theory of Planned Behavior, 239–240, 245 theta frequency band, brain waves, 264 Thinking Fast and Slow, 133 tightwads, 196–197 top-down attention new product eliciting, 160 research, 89–90 voluntary element, 99 website scanning, 53, 208 touch, appeal to, 192

traits, personality and shopping styles, 195–197 transactional service providers, 332 transportation by stories, 220, 222–223 treatments, experiments, 299 Tropicana, 168–169 troubleshooting in experiments, 304–305 truth in advertising, 347 processing fluency, 78 t-test, 309 Tversky, Amos, 34, 127 typicality in design, 43, 167

•U• unconscious, defined, 10 “Unconscious Processing of Web Advertising” article, 211–212

•V• valences. See also emotional valences body-state changes, 97–98 defined, 286 emotions, 90, 96 measuring brand equity, 155 micro-valences, 90, 162 validity evidence of, 348–349 experiments, 302–305 external and internal, 347–348 neuromarketing, 368–369 values, 145, 286 variability, 299–300 variance, advertising, 33 vascular activity (blood flow), 258 vendors, neuromarketing accreditation, 252–253, 352–353 versus consultants, 332 hiring, reasons for, 333 specializations, 18, 331 validity and reliability evidence, 348–349 verbal self-reports, 24, 31–32 video games, 57, 230–232 virtual reality (VR) shopping environments, 51, 202 vision, fundamental equation of successful change, 329 visual selection, 209 visual sense, 254 visually salient objects, 208

391

392

Neuromarketing For Dummies

•W•

Wood, Wendy, 135 working style, partners, 340

web pages/websites advertising approach, 206–207 advertising effects, 210–211 attention activation, 208 control, 205–206 design, 53–54, 208–209 ease of use, testing, 217 experience satisfaction, testing, 209–211 interactivity, 204–206 visually salient features, 208 webcam-based eye tracking, 275–276

•Y• Yoo, Chan Yun, 211–212

•Z• zombie consumers, 63, 85–86, 362 zygomatic muscles, 254

About the Authors Stephen J. Genco: Steve is a pioneer in the field of neuromarketing. In 2006, he founded one of the first neuromarketing research firms. From 2009 to 2012, he was Chief Innovation Officer at another leading neuromarketing vendor. He is currently an independent consultant, helping world-class clients develop and execute market research programs and business strategies that blend traditional research techniques with the latest advances in behavioral, neurometric, and biometric tools and technologies. Steve has over 20 years of experience as a consumer research innovator, entrepreneur, management consultant, social science researcher, and educator. Prior to entering the business world, he was a teacher and researcher in political science, specializing in public opinion polling and executive decision making. He holds a doctorate, a master’s degree, and a bachelor’s degree from Stanford University, as well as a master’s degree from the University of British Columbia. Andrew P. Pohlmann: Andrew has been a leader in business strategy and marketing for over 20 years. In 2008, he led the development of the world’s first global neuromarketing consultancy, helping numerous Fortune 100 and Global 50 firms integrate neuromarketing techniques into their understanding of consumer behavior. Andrew has held senior leadership roles at Citigroup, JPMorgan Chase, Alticor, and Morse Best Innovation specializing in corporate strategy, product development, business development, and marketing. He was a partner with Meridian Consulting and helped launch BoardVantage, the leading web-based communication platform for corporate boards. Andrew’s experience has spanned multiple industries and regions, including both institutional and consumer clients in North America, Europe, and Asia. Peter Steidl: Peter is an advisor to marketers and their agencies in AsiaPacific and beyond, having carried out assignments in 20 countries on five continents. His clients include a number of Fortune Global 100 corporations, professional services firms, and government agencies. His clients value his ability to apply neuromarketing insights to lift the effectiveness of marketing strategies and initiatives. Peter has an MBA and PhD from Vienna University, has served on the permanent staff of Vienna and Adelaide University, and held a Visiting Professorship at Curtin University in Perth, Australia. His most recent book, Neurobranding, was shortlisted for Expert Marketer Magazine’s Marketing Book of the Year Award 2013.

Dedication In memory of my dear mother, who just missed the chance to brag to her friends that her son was a For Dummies author. —Steve To my wife, Denise, who provides the support and encouragement most people can only dream about. And to my parents, who raised me with respect for life and achievement and who first introduced me to the wonders of science. —Andrew To my clients, who make it possible for me to keep learning. —Peter

Authors’ Acknowledgments We’d like to thank Anam Ahmed, acquisitions editor at John Wiley & Sons Canada, Ltd., who made the first call to encourage us to consider this book idea. Not only are we thankful that we didn’t treat the call like a prank, but we appreciate her counsel and guidance to pursue this rewarding process. Additional thanks to Elizabeth Kuball (editor) and Dr. Michael Smith (technical editor) for their tireless commitment to detail. Without their revisions, suggestions, instruction, and demands, the final product would not be worthy of the For Dummies brand. Finally, we’d like to thank the many neuromarketing practitioners and researchers we’ve worked with over the years, whose knowledge and insights inform every page of this book. We wish we could mention you all by name. The breadth and depth of the thinking in this new field is inspiring. Any mistakes or errors in transcribing that thinking in this book are, of course, ours alone.

Publisher’s Acknowledgments Acquisitions Editor: Anam Ahmed

Project Coordinator: Kristie Rees

Project Editor: Elizabeth Kuball

Production Editor: Lindsay Humphreys

Copy Editor: Elizabeth Kuball

Cover Image: © Alex Slobodkin / iStockphoto

Technical Editor: Michael E. Smith, PhD