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The Hunt For The Consumer’s Buy Button!Is Neuromarketing The Next Big Promise? !!!

CaraJoy Nash!MBA 514 Marketing In A Digital Environment!

Ashland University!!

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Where did this field come from? What does it do? And how will it change marketing?! 3! Real world implications! 4!

Case Example 1! 5! Case Example 2! 5! Potential Application 1! 7! Potential Application 2! 7!

The Experts Opinion! 9! Marketing Landscape! 9! Consumer Segments and Specific Industries! 9! Trend Change! 10! Competitive Advantage! 10!

Summary Thoughts! 10! References! 11

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Where Did This Field Come From? What Does It Do? And How Will It Change Marketing?!!

! Focus groups and marketing surveys to gauge what makes a brand successful, or which TV ad will produce the desired result are no longer the only method used in marketing. Today marketing agencies and companies are scanning the consumers’ brain to measure activity in real time and measuring brain waves to determine what part of the brain is activated in an effort to locate that elusive buy button. These methods are more effective than traditional focus groups and surveys, the findings are completely objective and virtually free from error and misinformation, the results are highly specific for targeted branding, packaging, and advertising.!

The field of neuroscience is becoming increasingly important to multiple facets of our lives. The more we as a society realize the power of our brain, the more research will be conducted on behavior, buying habits, and even who you’re likely to vote for.!

The ‘concept’ of neuromarketing was developed by psychologist Jerry Zaltman at Harvard University in 1990 and patented in 1995 under the name of Zaltman Metaphor Elicitation Technique (ZMET). There are multiple sources that give credit to two different men with regard to which one-first used the term neuromarketing. Brighthouse Institute for Thought Sciences, an Atlanta marketing firm, claims to be the first to use the term neuromarketing in an article published in 2002 (Hammou, Galib, & Melloul 2013). The other gentleman, professor Ale Smidts, winner of the Nobel Prize for Economics in 2002, who has been dubbed by some as “the father of neuromarketing,” claims to be the first to coin the term of neuromarketing in the same year (Veronica, 2009).!

Neuromarketing is the next generation of marketing research, and currently believed to be the most accurate method of gaining consumer intelligence. The aim of Neuromarketing is to understand consumer behavior and to be able to predict, as much as possible, their future purchasing decisions. During fMRI testing, marketers are able to recognize whether the participant are scared, sleepy, happy, or interested, by examining how the product or the commercials affect the subject’s brain in real time.!

Neuromarketing is widely defined as the science that uses functional magnetic resonance imaging (fMRI), electroencephalography (EEG), magnetoencephalography (MEG), and transcranial magnetic stimulation (TMS), and other brain wave tools to view the human brain’s responses to marketing stimuli to figure out what consumers’ thoughts are toward a product, service, advertisement, or even packaging to perfectly construct marketing campaigns that are based on the human brain. (Hammou et al., 2006)!

! Both tests have their pros and cons. Because EEG’s do not go as deep into the brain as fMRI’s, sometimes the fMRI wins out. On the other hand, fMRI’s come with a ‘usage’ price tag of $1,000 per machine, per hour, and a minimum of 20 participants. To buy a machine and maintain it will cost over $1,000,000. !

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Marketers hope that neuroimaging will provide a more efficient trade-off between costs and benefits. This hope is based on the assumptions that people cannot fully articulate their preferences when asked to express them explicitly, and that consumers’ brains contain hidden information about their true preferences. In theory, the ‘hidden information’ can be used to influence consumer’s buying behavior, so that the cost of performing neuroimaging studies would be outweighed by the benefit of improved product design and increased sales.!!

Real world implications!!The “buy button,”  is in our amygdala (our lizard brain) where our primitive emotions

are created. The amygdala regulates fear, anxiety, aggression, sex, and a plethora of information we don’t want advertisers tapping into. Neuromarketers are interested in the VMF (ventromedial frontal cortex), which is a region in our brain that weighs value and decision-making.!

! Neuromarketing research states decision-making is widely influenced by emotions, often the same emotions regulated by our amygdala. By having participants watch advertisements and preform cognitive tasks under fMRI, the amygdala ‘lights up’ like a Christmas tree, showing an effective advertisement will excite this part of the brain.!

Additionally, marketers are excited about brain imaging because they hope it will provide an accurate marketing research method that can be implemented even before a product exists. The assumption is that neuroimaging data would give a more accurate indication of the underlying preferences than data from standard market research studies and would remain insensitive to the types of biases that are often a “hallmark of subjective approaches to valuations.” If this is indeed the case, product concepts could be tested rapidly, and those that are not promising, eliminated early in the process. This would allow more efficient allocation of resources to develop only promising products.!

  Understanding consumer "buy buttons” will make businesses more profitable as they begin to limit inventories to products that consumers actually want. Most fortune 500 companies are jumping on the neuromarketing bandwagon with active research programs. Increased corporate profits will spur competition, resulting in lower prices, and limiting production of goods to more of what consumers actually buy thereby lowering waste.!

Although the research going on in this industry is exciting and unbelievably useful, I’m left thinking, “at what point will evil take over?” Having information on our buying patterns, and what triggers the act of buying, puts us at risk for increased prices, and manipulative ads. !

Example: German neurobiologist Kai-Markus Müller has figured out a way to scan your brain and turn it into a treasure map--a treasure map leading him to the "feel-good" price you're willing to pay. (60secondrecap, 2013)!

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Müller’s neuromarketing technology, "Neuropricing" has marketers lining up. What his pioneering research means for the consumer is in this perfect example: “brainwaves enabled Starbucks to pinpoint, with lab-tested accuracy (fMRI), the highest price you're willing to pay for a Pumpkin Spice Latte that costs Starbucks 80 cents to serve, neuromarketing research showed it's more than $6.50 (60secondrecap, 2013).!!

Case Example 1!!Read Montague, Director of the Human Neuroimaging Lab at Baylor College of

Medicine, provided proof that branding plays with the brain. In 2004, he decided to repeat the infamous 1975 Pepsi Challenge, the difference this time? He would scan the activity of the brain at the same time, by using fMRI he was able to reveal which parts of the brain were active in real time.!

When Montague gave a taste of an unnamed soda to the subjects, he found that more people preferred Pepsi. On the scan images the ventral putamen, a region thought to process feelings of reward, had a response that was five times stronger than for people who preferred Coke.!

The shock came when Read repeated the experiment, this time telling volunteers which brand they were tasting. Nearly all the subjects then said they preferred the Coke. Moreover, different parts of the brain fired as well, especially the medial prefrontal cortex, an area associated with thinking and judging. Without a doubt the subjects were letting their experience of the Coke brand influence their preferences. (Montague, 2004)!

Pepsi couldn't achieve the same effect. When Montague reversed the situation, announcing which tastes were of Pepsi, far fewer of the subjects said they preferred Pepsi. Montague was impressed: he had demonstrated, with neuroscientific precision, the special power of Coke's brand to override our taste buds.!

Not to long after this study, Montague was interviewed and said he believes that ultimately behavior is what matters. “Brain imaging isn’t more accurate than other techniques. You’ll never get rid of psychology and behavioral studies -- that’s your ultimate end. But you do want more insight and imaging can provide it.”!

Montague predicted that fMRI will become a tool for testing packaging, advertising and other promotional material. “If I’m an auto manufacturer and want to change the curvature of the wheel well of my car model, how will my target 35 year old male respond? I’ll supplement my research with fMRI. And if I was buying something, I’m OK with them using brain imaging to make me happier.” (Montague, 2004)!!

Case Example 2!!In 2009, Frito-Lay overhauled all of its calorie-conscious snacks to make them

appeal to women. Jill Nykoliation, the president of Juniper Park, the advertising agency

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that handled the Frito-Lay women’s project noted, women are snacking more than men, but are not eating as many Frito-Lay snacks (Clifford, 2009).!

Juniper Park used neuromarketing, but in a slightly different way. They began by researching how women’s brains compared with men’s, so the firm could adjust the marketing accordingly. !

The hippocampus, the memory and emotional center, is proportionally larger in women. The research suggested that the communication center in women’s brains are more developed, suggesting that women could process ads with more complexity and more pieces of information. The research also concluded women felt guilty more often, whether it was not seeing their children enough, or snacking. The one point that stood out to me was the shiny yellow Lay’s bag made women feel guilty. !

Frito-Lay had often tried advertising snacks as guilt-free, but research showed that too would not alleviate the guilt. What this research provided was something Frito-Lay was doing with their Sun Chips was working. By toning down the packaging and showing off healthy ingredients in the snacks Sun Chips began selling better. The end result was, Baked Lay’s will no longer be in a shiny yellow bag, but in a matte beige bag that displayed pictures of ingredients, like spices or ranch dressing (Clifford, 2009).!

!!!What I’ve learned thus far is consumers are mostly irrational when making decisions,

people are bad at predicting their own behavior, emotions play a key role in the

Photo 1. Frito-Lay’s ad targeted at women, based on the neuromarketing research their advertising agency conducted (New York Times, 2009)

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decision-making process, and it is these findings that is sparking neuromarketing to become a major player in the field and our economy. !

Consumers needs are becoming the number one source of inspiration in the development of products and services, and to do this the primary role of marketing should be to provide the company with insight into what consumers expect from the brand knowing what goes on in their mind their tastes needs and expectations. (Georges, Tourtoulou, Badoc, 2013, p. 10) !!

Potential Application 1!!Marketing can be useful in many industries, politics for example. Scanning voters

brains to see how they react to campaign messaging ads, candidates, and voting decisions is changing the face of politics, especially political campaigns. I've managed three candidates, worked on a national campaign, and have attended some of the most respected campaign trainings in the industry. What was consistent in each training was the use of emotion to engage and persuade voters.!

Experts and consultants in the field differ about what qualifies as neuromarketing. Some believe that the term only applies to tests done while subjects are wired up to fMRI or EEG machines while a scientist studies the resulting brain activity. A more basic type of neuromarketing measures muscle response, skin temperature, and pupil dilation to test the emotional effectiveness of a campaign messaging. Both rely on contemporary research about neuroscience and psychology to determine what people are feeling when they view these messages--versus what they might say they are feeling when asked directly (Robischon, 2010).!

Daryl Howard (2009), a consultant to two Republican winners in the 2010 midterm elections, says he crafted neuromarketing-based messages for TV, direct mail and speeches for Senate, Congressional and Gubernatorial clients. Howard states “We measure everything including the storyline, level of the language, images, music. Using critical point analysis, we identify specifics that may drive voters away or attract them.” The techniques are non-invasive, and include measuring muscle, skin, and pupil response (para. 3). "We prefer our methods over some EEG/fMRI methods because our approach is quicker, and more importantly can be done in the script phase, saving production time, money, and tells us the level of honesty of the ad” (Howard, 2009).!!Potential Application 2!!

As I’ve been researching neuromarketing and what it has to offer marketing and other industries, it occurred to me the one potential application that relates to this class is ‘digital marketing.’ Specifically, web design, and how using neuromarketing can increase online business and response. !

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In her 2009 book Neuro Web Design, Dr. Susan Weinschenk describes a study by (McCLure, Laibson, Loewenstein, & Cohen, 2004) which used fMRI, that asked individuals to choose between certain money rewards. They could choose a small amount of money ($5) now or large amount of money ($40) later. Researches varied the amount of money, how difficult it was to calculate when you would get what amount, and how long participants would have to wait to get the larger amount (one week vs. two weeks) (p. 56).!

When participants thought about waiting and when they calculated how much they would get if they waited, the prefrontal cortex (the part of the brain that regulates planning complex cognitive behavior, personality expression, decision making, and social behavior) light up. But when they thought about getting the money right away, the mid brain (associated with vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation) was activated. This implied that when making a decision about buying something, we’re swayed by whether we can have it right away.!

However, when standing directly in front of the product itself, ‘the product’ will sway the decision. Buying something on the Internet doesn't have the same effect on the midbrain, in order to take action right away, something at the site has to get the attention of our midbrain. If we see that we’ll get it right away that'll speak to the midbrain and encourage the buying act. !

If the website can't promise immediacy, the next best thing would be to let the buyer know ‘very soon.’ A perfect example is Amazon.com, when looking at a product on the site, there's a little note off to the right, by the delivery information, that says if you order this in the next ‘so many’ many hours, you can have the product on a specific date, that information is strategically placed to activate a midbrain (Weinschenk, 2009, p. 57).!

Banner ads are an extremely effective away to get attention, they’re constantly moving and/or changing on the website, fMRI has shown the subconscious mind has to take notice the banner ads, even though banner ads have a 1%-3% click-through rate (CTR).!! !

Photo 2. Identifying the immediacy on amazon.com to persuade you to purchase now.

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The Experts Opinion!!On July 17, 2014, I spoke with David Rosen founder of First Person Politics, a

political consultancy firm utilizing political psychology to motivate people interested in power and social change. Rosen, does not conduct the research, he uses the research findings to advance the business and objectives of his clients. One of his recent projects was using psychology to analyze american symbols, particularly american flags, and their effects on people. !!

Marketing Landscape!!Although political psychology dates back to the 1800s, the first American to be

considered a political psychologist was Harold Lasswell (1902–1978).His major theories involved the motives of the politically active and the relation between propaganda and personality.!

Rosen states that currently there is no “political psychology market,” it is his mission to change this. Political psychology is definitely going to change the marketing strategies of politics, and its’ related fields. As society becomes more aware behavior is controlled by the brain, the more we’ll see psychologically based campaign ads. One of Rosen’s aim is to optimize political messaging and reaction in voters, and use research findings to drive voters decisions. !!

Consumer Segments and Specific Industries!!In the political realm the following are examples neuromarketing and political

psychology will affect:!! 1. Campaign Consulting!! 2. Lobbying!! 3. Policy!! 4. Fundraising!Neuromarketing and political psychology innovation will change campaign

consulting, not campaigns themselves. Rosen states that currently 9/10 people who work on either political campaigns, or in the industry in another capacity, have political science degrees. It is this population that is preventing the use of neuromarketing and political psychology. Their educational backgrounds curb their thinking in behavioral and neurological methods, of winning votes, and attracting voters.!

Lobbyist, policy makers, and fundraising experts will see a shift towards neuromarketing and political psychology when they too realize the benefit of knowing how the decision maker thinks and what makes them respond in a manner that is beneficial to the desired outcome.

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Trend Change!!One of the biggest changes Rosen mentioned was not how the field of

neuromarketing will change politics, but how the generational shift is going to change politics, and how neuromarketing will evolve as a result. In the next 3-4 years we’ll see a major shift in who represents us, which by default will change how campaign messaging and the research itself will change. Moving from baby-boomer to generation X will force this change.!!

Competitive Advantage!!A major advantage political consulting agencies can have is, access to an fMRI

machine. The use of neuromarketing in politics is currently not widely discussed, the chances of ‘the other side’ using a campaigns advanced methods, to get into the voters brain is a hot button that can easily be exploited. It opens up the door to manipulation. It has been my experience “Persuasion always works better when the persuaded is not aware that he or she is being influenced.”!

The one with the most knowledge wins and this probably explains why a lot of people are reluctant to talk about neuromarketing especially when the word politician is in the same sentence.!

Not too long ago, conservatives were among the majority of neuromarketing participants, but that is changing fast. In the political world “The Analyst Institute” is the gold standard of campaign research. They provide consulting to major campaigns and candidates. !!

Summary Thoughts!!In 2012, while I was working for Obama for America, The Analyst Group was brought

into ‘key states’ to train the entire statewide staff on Get Out The Vote (GOTV). The training was centered on their research, teaching us how to talk to voters to achieve the desired response. I was amazed at the extent to which they provided information, down to calling voter’s ‘voter’s’ not just by their actual name. !

I am extremely happy I chose this topic for my trend, not only did I learn about the field of neuromarketing, its affect on the world, and future uses, I gained knowledge and insight I can use in my job, and acquired a new ‘like minded individual, I can talk to about this field and its affect on politics.’ !!!

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References!!60Second Recap (2013)First they scan your brain. Then they set their price.!

http://www.60secondrecap.com/neuromarketing-brain-scan/! ! !!Clifford, S. (2009). Frito-Lay Tries to Enter the Minds (and Lunch Bags) of Women. Retrieved

July 14, 2014, from http://www.nytimes.com/2009/02/25/business/media/25adco.html!!Coyler, E. (2004). Branding Measurements | fMRI Brain Scans | brandchannel.com. Branding

Measurements | fMRI Brain Scans | brandchannel.com. Retrieved June 03, 2014, from http://www.brandchannel.com/features_effect.asp?pf_id=201!!

Ford, M. (2010). How they make those adverts go straight to your head. CNN. Retrieved July 14, 2014, from http://www.cnn.com/2010/TECH/innovation/10/05/neuro.marketing/!!

How Neuromarketers Tapped the Vote Button in Your Brain to Help the GOP Win the House. (2010, January 1). Fast Company. Retrieved July 14, 2014, from http://www.fastcompany.com/1699985/how-neuromarketers-tapped-vote-button-your-brain-help-gop-win-house!!

Jones, S. (2014) Why We Do the Things We Do: Understanding the Science Behind Consumer. Behavior Business 2 Community. Retrieved July 11, 2014, from https://smallbusiness.yahoo.com/advisor/why-things-understanding-science-behind-consumer-behavior-045232881.html !!

Marketing & Neurosciences. (2008, January 1). - BrainImpact. Retrieved July 12, 2014, from http://www.brainimpact.eu/en/marketing-neurosciences/!!

Melloul, J., Hammou, K., & Galib, H. (2013).The Contributions of Neuromarketing in Marketing Research. Journal of Management Research, Vol. 5, , 20-33.!!

Neuromarketing –You (Don’t) Know (Why) You Want It!Is Neuromarketing Something to Fear? pat owings 2014 http://www.business2community.com/

marketing/neuromarketing-dont-know-want-0938926#!bf6Q5T!!Robischon, n. (2010). Neuromarketing the 2010 Elections: Scoring Campaign Ads. Fast

Company. Retrieved July 14, 2014, from http://www.fastcompany.com/1700207/neuromarketing-2010-elections-scoring-campaign-ads!!

Rosen, D. Founder, First Person Politics, (2014) Phone Interview by Nash, C. Conducted July, 17, 2014, http://www.firstpersonpolitics.com!!

Suri, M. (2013) Neuromarketing as a new approach to modern marketing!! http://www.doonbusinessschool.com/images/page3-87.pdf!!

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Thano, P. (2013, January 1). Neuromarketing for Companies: Can it help?. Neuromarketing for Companies: Can it help? ~. Retrieved June 3, 2014, from http://ecognomy.blogspot.com/2013/10/neuromarketing-for-companies-can-it-help.html!

Veronica, B. Brief history of neuromarketing. (2009) The International Conference on Administration and Business, 119-121.!!

Weinschenk, S. (2009). Neuro web design: what makes them click?. Berkeley, CA: New Riders.!!Williams, J. (2010). Neuromarketing – Add it to the Marketing Toolbox. Retrieved July 10, 2014,

from http://www.visibilitymagazine.com/disc-inc/jennifer-williams/neuromarketing-----add-it-to-the-marketing-toolbox#