Neuromarketing 101The Importance of Marketing to the Brain

The Marketing Landscape

✤ millions of jobs depend on communicating and persuading the brain

✤ trillions of dollars spent

✤ billions of dollars gets wasted -- corrosive or ineffective

✤ marketing jobs are competitive

✤ many marketers adopting new approaches to better understand the way we interact, communicate, and attribute value

Why the Brain? “It’s a no-brainer”✤ brain makes behavior

✤ brain creates your world and and the world of consumers

✤ brain filters out the unnecessary, navigating you to perform important actions

✤ brain tells your body what to pay attention to/what to remember

Brain Statistics

✤ a brain processes sensory input subconsciously

✤ brain activity occurs below consciousness threshold

✤ 5 senses capable of absorbing 11 million bits of info per second

✤ conscious brains can only process 40 bits per second

✤ 99.999 percent subconscious to conscious brain processing

✤ 95% of purchases are determined subconsciously (we are unable to access are subconscious)

Brain Functionality Part I

✤ Think -> Do -> Feel: OLD MODEL (wrong)

Brain Functionality Part II

✤ Feel -> Think -> DO : NEW MODEL (right)

Marketing Research Flaws

✤ measure thinking, not feeling

✤ 80 percent of new products in marketplace fail

✤ Traditional research solely measures the cortex when it is our subconscious (limbic system) and reptilian brains that drive buying behavior

✤ Cortexes alter original data that the brain recorded (aka the truth)

✤ people cannot articulate why they do what they do

✤ people lie

✤ dominant focus group participants

Reasons to Change

✤ Capitalism driven by hands of the consumer -- misunderstanding of consumer means failure in capitalism

✤ Languages, norms, conventions, etc. obscure results of traditional methods

✤ BRAIN IS UNIVERSAL

✤ For the good of science...it’s a new horizon in marketing!

Learn how to:

✤ make consumers notice you

✤ make consumers like you

✤ make consumers remember you

Benefits of Neuromarketing Apprehension✤ make products and messages more effective -- marketing is

everything

✤ understand the design cues and aesthetics that appeal to our inner truths and sensibilities...

which formed 100,000 years ago

What is Neuromarketing?Offspring of Psychology + Neuroscience + Economics

Neuroscience -- imaging technology, measuring brain’s areas of activation

✤ EEG

✤ fMRI

Behavioral Science -- studying human actions and bodily responses, the outputs of brain

✤ Biometrics

✤ Eye Tracking

✤ Facial Coding

Neuro-History

✤ 1920’s Hans Berger develops the first brainwave reading machine called the EEG

✤ EEG = Electroencephalography

✤ Berger first to design sensors to read the electrical signals that naturally emanate from the brain

✤ Hans’ machine had 8 sensors, new standard is 64 sensors

✤ 80 years later, technology incubates the Neuroscience field

The Neuromarketing BOOM Part I

1. Technological Revolution

✤New innovations in computer technology provide us with the tools to understand the complexity

From this, we learned:

✤ brain has 60,000 miles of wiring

✤ brain is a complex, interwoven series of networks

✤ brain (not all senses) is capable of approx. 200 million billion calculations per second

The Neuromarketing BOOM Part II

2. Understanding the Brain is a Series of Several Networks

✤ neurons migrate to different areas (networks) of the brain

✤ each area is responsible for a different function and different emotion

(to be discussed in greater detail later in the lecture)

The Neuromarketing BOOM Part III

3. Marketing Research Shortcomings

✤ created a need in the market research world

✤ new method necessary for creating more accurate, reliable, and actionable knowledge --> MAKE BETTER BUSINESS DECISIONS

The Neuromarketing BOOM The Formula

EXPONENTIAL GROWTH IN KNOWLEDGE OF BRAIN

+

COMPUTER ADVANCEMENTS

+

CHALLENGES OF EXISTING RESEARCH TACTICS

= NEUROMARKETING BOOM

Marketer’s Ultimate Goal: Tap into Subconscious

✤ subconscious -- marketer’s sweet spot

✤ subconscious -- where initial product interest, purchase intent, and brand loyalty are formed

A Neuromarketer’s Toolbox

EEG (Electroencephalography)

fMRI(functional Magnetic Resonance Imaging)

Biometrics/Facial Coding

EEG Electroencephalography

EEG Electroencephalography

✤ passive technology, uses sensors (highly sensitive microphones)

✤ sensors capture short bursts of noise from electrical signals that brainwave activity produces

✤ noninvasive/comfortable

✤ sensors usually embedded into a cap

✤ neurological activity -- up to 2,000 low-voltage signals every second, @ each sensor location

✤ 16 minimum, avg. 64 sensors on all parts of brain

✤ must examine all areas of brain to identify which systems are activated simultaneously

✤ sensors pick up desired noise and filter out white noise

EEG Electroencephalography ct....

✤ White noise produced from muscle movements (eye blinks = 100x electric voltage that brainwaves produce

BRAIN METRICS (part & parcel with eye-tracking***) :

1) Attention

2) Emotional Engagement

3) Memory Retention

EEG Criticism

✤ only measures brain activity at the neocortex level, though neocortex is touted as a reflection of limbic system activity

fMRI functional Magnetic Resonance Imaging

✤ Primarily used for medical research

Procedure:

step 1: lie down in narrow long tube surrounded by magnets

step 2: magnets produce electrical fields

step 3: electrical fields inputted into computer

step 5: computer renders image, displaying oxygen levels in the brain’s blood flow

fMRI functional Magnetic Resonance Imaging

✤ every brain section needs oxygen via blood to function

✤ measures increased blood flow in limbic system

fMRI Criticisms

✤ 5 second delay for blood to flow to specific part of the brain

✤ difficult to determine precisely what triggered the increased blood flow

Biometrics

✤ physiological responses from external stimuli -- some biometric measurements directly linked to limbic system activity

✤ examples: eye-tracking, heart-rate, sweat glands, facial coding

Biometrics Criticisms

✤ possible lag-time between physiological response to stimuli and psychological response

✤ many altering variables -- fatigue, medical conditions, etc.

✤ peripheral confirmation

Evolution of the BrainThe Primal Brain

Anatomy- 3 Levels of Brain -

1.Neocortex (conscious) --- 7,000,000 years old2. Limbic (subconscious) --- 100,000,000 years old

3. Reptilian (subconscious) --- 450,000,000 years old

The OLD BrainPart I

✤ limbic and reptilian systems have been in us for approx. 100,000,000 years+ ... gained prominence in reptiles & dinosaurs...ruled the earth for 135M years

✤ reptilian relies on instinct for survival

✤ limbic uses emotion, memory, & attention to filter encounters

✤ 6 emotions: arousal, confident, inspired, unimpressed, annoyed, disappointed

The OLD BrainPart II

✤ remember: we’re animals (primates) too... only we can think linearly, develop complicated languages, formulate/ understand metaphors, etc.

✤ confusing the OLD brain = brain gives up = negative association with the brand/company

✤ wants easy, simple, “zen-like” marketing ploys

✤ harbors pleasure/reward circuits, which get cemented after repetition

✤ SELL TO OLD BRAIN by integrating simple, clean, emotionally engaging marketing tactics

The NEW Brain

✤ neocortex

✤ first emerged as a instrument to store food, plan, plant, hunting, and other survival duties

✤ absorbs and emits culture

✤ SURVIVE to THRIVE

✤ duty = to keep the old brain happy (goal-driven behavior)

✤ SELL TO NEW BRAIN by “giving consumer clear, accurate directions for finding and obtaining that goal”

With Neuromarketing:

✤ we know now what the brain wants/rejects

✤ what the brain is frustrated by

✤ what the brain ignores

✤ what the brain feels is novel (brain can’t ignore novelty)

Takeaways

✤ brain has precious resources; limited at what it can process & short span of attention

✤ simple images/copy, while still captivating brain

✤ use direct verbs since their simpler

BRAIN 101“every behavior, every intention, every dream begins in the brain”

Brain CellsPart I

✤ brain = network of billions of individual cells called neurons

✤ neurons = electrically charged. basic working units of brain and nervous system

✤ every brain function requires a certain # of neurons in specific part of the brain

✤ neurons: 1. collect to form various brain structures 2. acquire ways of transmitting messages to other parts of body to perform functions 3. learn how to control and interact with environment (motor to memory)

✤ cell body + dendrite (receiver) + axon (messenger) = neuron

Brain CellsPart II

✤ neurons connect to other neurons ... tens of thousands of connections on just one cell

✤ neurons compete with each other for chemicals, connections (synapses) ... some win, some lose, some die (why children have more neurons than adults)

Charging and Transmission of a Neuron

✤ neurons receive electrical impulse (via dendrite) -> processes signal, then prepares to send it to another neuron (generates action potential [100 mi./hour]) -> action potential fires, channeled in stretching axon -> charge produces diminutive electrical signal -> axon connects to dendrite (via synapse) -> neurotransmitter released

RECAP

✤ neuron: brain cell, basic working units of brain (nucleus + cell body+ dendrite + axon)

✤ dendrite: branch of neuron that receives electrical impulse

✤ axon: branch of neuron that electrical signal is transmitted through

✤ action potential: electrical charge in neuron, pre-discharge

✤ synapse: port between connecting neurons

✤ neurotransmitters: chemicals (known as chemical messengers) brain releases when neurons bond to each other...chemicals bind receptors to synapse

Brain Topography Part I

4 Parts of Neocortex

(Focus Groups, EEG -> any cognitive metric)

✤ 1. Parietal Lobe - space

✤ 2. Frontal Lobe - movement & speech & problem solving

✤ 3. Occipital Lobe - vision

✤ 4. Temporal Lobe - hearing

Main parts of Limbic System

(fMRI & Biometrics -> emotions, memory, chemical senses)

✤ hippocampus - main component of memory formation

✤ amygdala (in hippocampus) - reward, but mainly fear, anxiety

✤ nucleus accumbens - reward and addiction

Brain Topography Part II

Main parts of Limbic System

(emotions, memory, chemical senses)

✤ piriform cortex - olfactory

Main parts of Reptilian System

(Biometrics -> survival)

✤ thalmus - relay station for all sensory input

✤ hypothalmus - relay station for all internal organs

✤ medulla oblongata - heart rate and respiratory

The Limbic System vs. Reptilian System

Neuromarketing MetricsEEG // fMRI // Biometrics // Eye-Tracking // Facial Coding

EEG // fMRI // Biometrics // Eye-Tracking // Facial Coding

✤ EEG --> electrical impulses on the surface area of the brain (cortex)

✤ fMRI --> oxygenated blood flow into different areas of brain

✤ Biometrics --> heart rate, skin conduction, motion and respiration (all areas of brain in the reptilian complex)

✤ Eye-Tracking --> precise visual response to stimuli

✤ Facial Coding --> micro-expressions = instant indication of emotions in limbic and/or reptilian system

They Measure...

Primary Metrics: ✤ 1. ATTENTION ✤ 2. EMOTIONAL ENGAGEMENT ✤ 3. MEMORY

Derived Metrics: ✤ 1. PURCHASE INTENT/PERSUASION✤ 2. NOVELTY✤ 3. AWARENESS/UNDERSTANDING/COMPREHENSION

...in response to brand/product/packaging/advertising/in-store

stimuli...

ATTENTION -- Primary Metric

✤ addresses: Do people notice us?

✤ attention = starting point for all marketing

✤ WHEN to look and WHERE to look

✤ people do not have access to the predecessor processes that lead up to attention

EMOTIONAL ENGAGEMENT -- Primary Metric

✤ at a subconscious level, our brains are constantly updating our emotional engagement with the world around us ... left undetected at a conscious level

✤ 6 emotions: Arousal, Confidence, Inspired, Unimpressed, Annoyed, Disappointed

✤ emotional engagement = connection we feel to stimuli at a specific moment in time

MEMORY -- Primary Metric

✤ memory = what we depend on when we’re buying things

✤ no remembrance = no influence on product purchase

✤ to conjure up memory -> brain encodes, then retrieves

✤ with neuromarketing, predict the likelihood that someone will remember something after exposure to stimuli

✤ implicit memory = process of memory influencing attitudes, decisions, & behaviors w/out entering conscious thought

Case Study: Kleenex vs. Andrex

“They ‘feel’ that Andrex is somehow indefinably 'better' than Kleenex"

PURCHASE INTENT/PERSUASION -- Derived Metric

✤ MEMORY + EMOTIONAL ENGAGEMENT ... Advertisement comes to memory

Process

✤ step 1: Advertisement/Somatic Marker comes to memory

✤ step 2: Past emotions begin to surface

NOVELTY -- Derived Metric

✤ brain loves novelty

✤ example: Monkey sees new fruit from tree (increased in chance in survival) -> caught his attention and he has to, in hindsight, memorize where he saw it

✤ novelty influences interest, surprise, attraction, and potentially purchase

✤ novelty is perishable

✤ novelty ... boredom ... irritation

Date

THE FUTURETapping Into The Brain’s Subconscious

Top Sensory BrandsBranding’s Sensory Symphony

SIGHT // SOUND // SMELL // TASTE // TOUCH

SightTiffany & Co.’s Trademark Blue

SOUNDMercedes Benz’s Doors

SmellSingapore Airlines’ Signature Scent

Bang & OlfusenWeighted Remote