MARKETING SPECIAL....Tells Us About Consumer Desire

MARKETING SPECIAL What Neuroscience Tells Us About Consumer Desire

It's easy for businesses to keep track of what we buy, but harder to figure out why. Enter a nascent field called neuromarketing, which uses the tools of neuroscience to determine why we prefer some products over others. Uma R. Karmarkar explains how raw brain data is helping researchers unlock the mysteries of consumer choice. Key concepts include:

• When tracking brain functions, neuroscientists generally use either electroencephalography (EEG) or functional magnetic resonance imaging (fMRI) technology. EEG measures fluctuations in the electrical activity directly below the scalp, while fMRI tracks blood flow throughout the brain.
• Studies have shown activity in that brain area can predict the future popularity of a product or experience.
• For businesses planning to outsource neuromarketing services, Karmarkar advises seeking out a firm that was founded by a scientist, or one that has a strong science advisory board.

In the early 1950s, two scientists at McGill University inadvertently discovered an area of the rodent brain dubbed "the pleasure center," located deep in the nucleus accumbens. When a group of lab rats had the opportunity to stimulate their own pleasure centers via a lever-activated electrical current, they pressed the lever over and over again, hundreds of times per hour, foregoing food or sleep, until many of them dropped dead from exhaustion. Further research found pleasure centers exist in human brains, too.

“People are fairly good at expressing what they want, what they like, or even how much they will pay for an item. But they aren't very good at accessing where that value comes from, or how and when it is influenced by factors like store displays or brands.”

Most humans are a little more complicated than rats, of course. But we are largely motivated by what makes us feel good, especially when it comes to our purchasing decisions. To that end, many major corporations have begun to take special interest in how understanding the human brain can help them better understand consumers. Enter a nascent but fast-growing field called neuromarketing, which uses brain-tracking tools to determine why we prefer some products over others.

"People are fairly good at expressing what they want, what they like, or even how much they will pay for an item," says Uma R. Karmarkar, an assistant professor at Harvard Business School who sports PhDs in both marketing and neuroscience. "But they aren't very good at accessing where that value comes from, or how and when it is influenced by factors like store displays or brands. [Neuroscience] can help us understand those hidden elements of the decision process."

To be sure, there is a clear difference between the goals of academia and the goals of a corporation in utilizing neuroscience. For Karmarkar, her work falls into the category of decision neuroscience, which is the study of what our brains do as we make choices. She harbors no motive other than to understand that process and its implications for behavior, and draws on concepts and techniques from neuroscience to inform her research in marketing.

For corporations, on the other hand, the science is a means to an end goal of selling more stuff. But the tools, once restricted to biomedical research, are largely the same. And Karmarkar expects brain data to play a key role in future research on consumer choice.

(In a recent HBS industry background note on neuromarketing, she discusses the techniques that have helped researchers decode secrets such as why people love artificially colored snack food and how to predict whether a pop song will be a hit or a flop.)

Tricks of the trade

When tracking brain functions, neuroscientists generally use either electroencephalography (EEG) or functional magnetic resonance imaging (fMRI) technology. EEG measures fluctuations in the electrical activity directly below the scalp, which occurs as a result of neural activity. By attaching electrodes to subjects' heads and evaluating the electrical patterns of their brain waves, researchers can track the intensity of visceral responses such as anger, lust, disgust, and excitement.

Karmarkar cites the example of junk-food giant Frito-Lay, which in 2008 hired a neuromarketing firm to look into how consumers respond to Cheetos, the top-selling brand of cheese puffs in the United States. Using EEG technology on a group of willing subjects, the firm determined that consumers respond strongly to the fact that eating Cheetos turns their fingers orange with residual cheese dust. In her note, Karmarkar cites an article in the August 2011 issue of Fast Company, which describes how the EEG patterns indicated "a sense of giddy subversion that consumers enjoy over the messiness of the product."

That data in hand, Frito-Lay moved ahead with an ad campaign called "The Orange Underground," featuring a series of 30-second TV spots in which the Cheetos mascot, Chester Cheetah, encourages consumers to commit subversive acts with Cheetos. (In one commercial, an airline passenger quietly sticks Cheetos up the nostrils of a snoring seatmate. Problem solved.) The campaign garnered Frito-Lay a 2009 Grand Ogilvy Award from the Advertising Research Foundation.

EEG vs. fMRI

Karmarkar notes that EEG and fMRI have different strengths and weaknesses, and that EEG has some limitations in its reach. "The cap of electrodes sits on the surface of your head, so you're never going to get to the deep areas of the brain with EEG," Karmarkar explains.

The fMRI uses a giant magnet, often 3 Teslas strong, to track the blood flow throughout the brain as test subjects respond to visual, audio, or even taste cues. The technology has its own logistical limitations. Running an fMRI scanner costs researchers up to $1,000 per hour, and studies often use 20-30 subjects, Karmarkar says. And while EEG lets subjects move around during testing, fMRI requires them to lie very still inside a machine that can be intimidating.

"This is a sophisticated piece of medical equipment that exerts a very strong magnetic field at all times, and it's important to be very careful around it," Karmarkar says. "For example, you cannot take metal into a magnet room!"

“Expressions of happiness in some Eastern cultures are expressed as a sense of calm or peace, whereas in some Western cultures, happiness means jumping around with joy and excitement.”

But fMRI is invaluable to neuroscience and neuromarketing in that it gives researchers a view into the aforementioned pleasure center. "The more desirable something is, the more significant the changes in blood flow in that part of the brain," Karmarkar says. "Studies have shown activity in that brain area can predict the future popularity of a product or experience."

In her note, Karmarkar discusses research by Emory University's Gregory Berns and Sara Moore, who connected the dots between neural activity and success in the music industry. In a seminal lab experiment, teenagers listened to a series of new, relatively unknown songs while lying inside an fMRI machine. The researchers found that the activity within the adolescents' pleasure centers correlated with whether a song achieved eventual commercial success. The OneRepublic song Apologize performed especially well in both the brain scans and the market.

"Importantly, Berns and Moore also asked their original study participants how much they liked the songs they heard, but those responses were not able to predict sales," Karmarker's note states, illustrating the marketing value of subconscious cerebral data.

Neuromarketing can provide important but complex data to companies that target a global audience. While product testing may provide similar neural responses in American and Asian subjects, for instance, the marketing implications may be very different.

"Expressions of happiness in some Eastern cultures are expressed as a sense of calm or peace, whereas in some Western cultures, happiness means jumping around with joy and excitement," Karmarkar explains. "So you might get two totally different fMRI results that actually mean the same thing—or you may have two totally different stimuli create the desired effect of profound happiness, but for different reasons. If you get an excited effect in an Eastern market, it may not be a good outcome, even though that was the effect you wanted in a Western market. On the other hand, a sense of peace might be misconstrued as a failure."

Valid concerns

For businesses looking to enlist the services of a neuromarketing company, she advises watching out for consultanting firms that claim to offer such services but don't really have the technology or expertise to back up the claim. Rather, look for a company whose employees have a healthy, skeptical respect for neuroscience.

"The rubric for picking a good [firm] is making sure it was started by a scientist, or has a good science advisory board," Karmarkar says. "This is a field where scientists are very, very skeptical, and we should be. It's easy to feel like you've discovered some big, important truth when you see that the brain has done something that correlates with behavior. And it's just as easy to overstate our conclusions."

For consumers, the idea of giving advertisers additional insight into the subconscious mind might prompt privacy concerns. But Karmarkar says that the research is more about understanding brain waves, not controlling them.

"It's similar to the concerns about genetics," she explains. "People wonder, now that we can map the genome, are we going to manipulate the genome? I think it's a valid and important question to ask. But I don't think it's the direction that companies should take or that academics are taking."

She adds, though, that we need to keep in mind that advertisers have been successfully controlling our brains, to some extent, since long before the existence of EEG or fMRI technology.

"Imagine Angelina Jolie biting into an apple," she says. "It's the juiciest apple ever. She's licking her lips. There's juice running down her chin. Now if I spend some time setting up that scenario and then follow up by asking you to tell me how much you like Mac computers, I promise you that you'll rate them more highly than you would have if I hadn't just talked about how great that apple was for Angelina Jolie. So, yes, I just used your brain to manipulate you. Sex sells, and it has since the dawn of time. It sells because it engages that pleasurable reward center of your brain. As academics, neuroscience just helps us to understand how."

Carmen Nobel is senior editor of Harvard Business School Working Knowledge.

http://hbswk.hbs.edu/item/6950.html?wknews=03282012