June 3 (Bloomberg) -- Martin Lindstrom, the globe-trotting Danish branding expert, estimates that a whopping 90 percent of our buying decisions take place at a subconscious level. The author of the 2008 business best-seller “Buyology,” Lindstrom advises marketers to cut out the middlemen -- the buyers themselves -- and ask their brains directly: Will you buy our product? Forget focus groups and questionnaires. The brain is the route to the heart’s desire.
Lindstrom is part of an upstart generation of Mad Men known as neuromarketers. They apply the tools of neuroscience, such as functional MRI and brain-wave technologies, to learn how consumers’ brains react to ads and products.
American businesses spend billions on advertising each year -- $114 billion in 2011. Yet, according to marketing experts, 80 percent of all new products either fail within six months of launch or fall significantly short of their profit forecasts. Corporations such as Google Inc., Facebook Inc., Motorola Solutions Inc., Unilever and Walt Disney Co. have hired neuromarketers to help them improve those odds. Has it paid off?
Neuromarketing is a controversial practice without an established track record. Many of its purveyors lean heavily on hype. One “buyologist,” A.K. Pradeep, head of the U.S. company NeuroFocus, offers its corporate clients “secrets for selling to the subconscious mind.” Claims such as these led the journal Nature Neuroscience, in 2004, to editorialize that neuromarketing might be “little more than a new fad, exploited by scientists and marketing consultants to blind corporate clients with science.”
Still, the fact that an impressive cohort of esteemed scientists has joined the advisory boards of various neuromarketing companies suggests at least some kernel of promise in the enterprise.
For decades, businessmen have sought the advice of psychological experts to unlock the secrets of the consumer mind. In the early 1960s, researchers experimented with pupillometry, or measures of spontaneous pupil dilation, to gauge interest in features of package designs or print advertisements. They examined the skin conductance response, a measure of the sweatiness of the palms, as an indicator of people’s emotional response to advertisements, and employed eye tracking to reveal where on a page or TV screen people’s eyes traveled.
In the 1970s, researchers first used electroencephalography, which measures the electrical activity of the brain by means of electrodes placed on the scalp, to examine left- and right-brain activations in response to marketing stimuli. A decade later, they added steady-state topography (a cousin of EEG that detects the speed of neural processing) to ascertain whether long-term memory encoding during advertising is linked to changes in consumers’ preferences for certain brands. In the end, experts didn’t find these approaches particularly revelatory.
More recently, refinements in brain-wave technology (primarily EEG) and the advent of brain-imaging technology have allowed a new biological approach to the consumer mind. In 2004, neuroscientist Read Montague reported an exploration of consumer preference known as the Coke-Pepsi challenge. Montague and his team asked why Coca-Cola consistently dominates the market even though in blind taste tests subjects tend to prefer Pepsi or have no reliable preference. The investigators put subjects in an fMRI scanner, where they received random sips of Coke and Pepsi through long straws, not knowing which brand they were given. When subjects reported liking a beverage, their brains registered an enhanced response in the ventromedial prefrontal cortex, a region that mediates reward.
When subjects were later shown the brand’s label before tasting, however, many changed their preferences. Seventy-five percent of the subjects said they favored the sample preceded by an image of a Coke can. Montague could tell whether subjects were going to pick Coke or Pepsi by whether two of three regions -- the ventral midbrain, the ventral striatum and the ventral medial prefrontal cortex -- showed enhanced activity in response to one brand over the other.
The team concluded that Coke’s success was due to its ability to trigger a frisson of emotionally tinged memories, presumably because of its more effective brand marketing.
The Coke-Pepsi study was a media sensation. Advertisers embraced it as a dramatic lesson in the role of emotion in determining the power of branding. Some industry insiders credit the experiment with jump-starting the field of neuromarketing.
But can measuring brain function predict sales or advertising success better than existing methods? To some degree, yes, according to a much-cited 2007 study by neuroscientist Brian Knutson and colleagues. They scanned subjects with fMRI as they viewed pictures of products, including a box of Godiva chocolates, a “Sex and the City” DVD and a smoothie maker. The researchers found that activation in regions associated with anticipating gain (the nucleus accumbens) correlated with product preference, while activation in regions associated with anticipating loss (the insula) correlated with excessive prices. Further, activation in a region implicated in integrating gains and losses (the mesial prefrontal cortex) correlated with reduced prices.
These findings suggested to the team that activation of distinct brain regions related to anticipation of gain and loss precedes, and can be used to predict, purchasing decisions. Their accuracy rate of 60 percent was not vastly greater than chance, although it was a little higher than the accuracy of subjects’ self-reported preferences for the various items just before they pressed the “purchase” button.
When Pantene, a maker of hair products, wanted to explore women’s “overall feelings about their hair,” in the words of a lead scientist at Procter & Gamble Co., it enlisted NeuroFocus, whose analysts recorded electrical signals at the surface of women’s heads as they watched a Pantene commercial, creating a millisecond-by-millisecond picture of brain activity. According to the brain-wave data, the women became “distracted” at the point in the commercial when a model appeared frustrated as she tried to deal with her unruly hair. Procter & Gamble revised the ad to focus more on the model’s hair and less on her facial expression.
How meaningful are such conclusions? The lack of transparency surrounding neuromarketers’ interpretation of the data opens them to challenge by critics. Columbia University researchers recently reviewed the websites of 16 neuromarketing companies and found that few described their methodology with enough detail to verify their claims.
Almost half of the companies didn’t even use EEG or fMRI but rather relied on old technologies such as skin conductance response or measures of pupil size. Moreover, neuromarketing companies’ use of different proprietary formulas for interpreting brain-wave data makes it even more difficult to assess their utility.
NeuroFocus interprets electrical activity over the inferior frontal lobe as reflecting engagement of mirror neurons -- cells that are implicated, some experts contend, in human empathy -- thereby reflecting a subject’s desire to share in the experience of the people depicted in an ad. This is a controversial interpretation because the significance of mirror neurons in humans isn’t well understood.
The caveats don’t end there. Neuromarketers can also run afoul of reverse inference, the common but dubious practice of reasoning backward from regional brain activity to conclude that subjects are thinking certain thoughts or experiencing certain feelings.
Reverse inference found its way into fMRI analysis of the Super Bowl XL halftime ads in 2006. As subjects watched ads that had been broadcast during the game, neuroscientist Marco Iacoboni scanned their brains. He used the term “flop” to describe one FedEx Corp. commercial involving a hapless caveman who is fired by his boss because he didn’t use the carrier to deliver a package. Why? Because when the caveman is subsequently crushed by a dinosaur, the subjects’ amygdalae showed enhanced activity.
“The scene looks funny, and has been described as funny by lots of people,” Iacoboni said, “but your amygdala still perceives it as threatening.” We know, however, that the amygdala does much more than just process fear. Among other things, it mediates response to novelty -- and a new Super Bowl ad is nothing if not new. Should FedEx scrap the ad lest it scare potential customers? Of course not.
Consumers aren’t disembodied brains. They juggle their pocketbooks and contemplate other items they have recently bought. Purchasing is a social activity, and people are social creatures, gauging the foreseeable reaction from a spouse (“You bought what!?”) and often soliciting advice from family, friends or experts before buying. Shoppers’ moods also influence buying behavior. So can the ambient pace of music in a store. In the end, a cacophony of influences impinge on us at once, some canceling out others, some combining in novel ways.
So is neuromarketing “hidden persuasion” or “junk science,” as Advertising Age asked in 2007? It is neither. Its premise is sound: namely, that people are drawn to certain products and disposed to purchase them for motives to which they are often not privy. It may turn out that neuromarketing can help generate and test early hypotheses about the optimal way to grab viewers’ attention and engage them emotionally. At bottom, however, the predictive value of neural information will take on real marketplace significance only if it outperforms what people say they will buy or what they say they like about a product.
The burden falls on neuromarketing to prove itself. Right now, the promises are bright and shiny, but behind the scenes, the fallacies and pitfalls of overhyped neuroscience remain.
(Sally Satel, a psychiatrist, is a resident scholar at the American Enterprise Institute for Public Policy Research and a lecturer at Yale University. Scott O. Lilienfeld, a clinical psychologist, is a professor of psychology at Emory University. This is a slightly adapted excerpt from their new book, “Brainwashed: The Seductive Appeal of Mindless Neuroscience,” which will be published June 4 by Basic Books. The opinions expressed are their own.)
To contact the editor responsible for this article: Mary Duenwald at firstname.lastname@example.org