Neuromarketing: the hope and hype of neuroimaging in business

(Dan Ariely and Gregory S.Berns 2010 Nature Reviews)

Anna JoApril 12th 2010

To reveal hidden

information that is not

apparent in other

approaches

To provide a more efficient cost-benefit

trade-off than other

marketing research

approaches

To provide early

information about product

design

3 fundamental Question

Neuromarketing

Business

Neuroimaging

Why use brain imaging for marketing?

Selected marketing research approaches

Focus group Preference questionnaires

Simulated choice methods

Market tests

What is measured Open-ended answers, body language and behaviour; not

suitable for statistical analysis

Importanceweighting for

various product attributes

Choices amongproducts

Decision to buy and choice among

products

Cost and competitive risk

Low cost; risk comes only from misuses of data

by the seller

Moderate cost and some risk of

alerting competitors

Moderatecost(higher if

using prototypes instead of

descriptions) and some risk of

alerting competitors

High cost and high risk of

alerting competitors, plus

the risk of the product being

reverse engineered before

launch

Revealing hidden information

Brain activity & Preference measurement

Reverse inference & Reward fMRI as a brain recorder

Willingness to Pay(WTP)

mOFC

PFC

fMRI(BOLD

activity)

Revealing hidden information

Brain activity & Preference measurement

Reverse inference & Reward fMRI as a brain recorder

• Striatal activity correlates with hedonic rating scales

=> Ventral striatal activity as an indication that an individual likes something

• Evidence: the posterior probability for a reward process given the observation of nucleus

accumbens(NAc) activation(Prior probability of engaging a reward-related process : 0.5)

=> Based on the number of fMRI papers reported in the BrainMap database with and

without ‘reward’ and with and without Nac activation

=> Nac activation increases the probability of a reward-related processes taking place to

0.9( Bayes factor 9 -> strong evidence for a causal relationship)

• In real world setting, individual likes something based on Nac activation alone may be

substantially less.

=> Product likeability: significant correlation between Nac activity and product preferences

in college students(Knutson et al.)

Goal-directed action / a read-out of ‘liking’

LearningOutcome evaluation

action selection

assignment of value to

differenet actions

Revealing hidden information

Brain activity & Preference measurement

Reverse inference & Reward fMRI as a brain recorder

representation of the decisions

Value-based decision-making process

OFC,StriatalActivity

key role in physiological arousal, aversive in nature / a disgust-meter Insula

Revealing hidden information

Brain activity & Preference measurement

Reverse inference & Reward fMRI as a brain recorder

• Advantage: activation in a particular brain region of interest is measured

• MVPA has the statistical power to predict the individual choices of a subject.

• For real-world marketing applications, it may be more important to predict future behaviour

than to understand the ‘why’ of behavior

Multi-voxel Pattern Analysis(MVPA)

Costs and Benefits

Culture and Advertising

• BOLD responses are influenced by ‘expectation’ effects(Pricing effects)

• mOFC responses were higher when subjects were told that the wine was expensive vs.

inexpensive

=> Activity in this region correlated with self-report ratings of how much participants liked the

wine(actually all wines were actually same)

=> the instantaneous experience of pleasure from a product(Experienced utility) is

influenced by pricing and mediating by the mOFC

• Subjects expectation=> striatal response

• The reward related signals in the ventral striatum and Nac can be more accurately linked

to prediction errors for reward than to reward itself.

ExpectationEffect

The role of expectation

Costs and Benefits

The role of expectation Culture and Advertising

• Coke drinkers showed significant activation in the hippocampus and right dorsolateral PFC

when they were cued about the upcoming drink of Coke

• “reverse inference constraint” : Compared brain responses to persons and brands,

activation patterns for brands differed from those for people

=> brands are not perceived in the same way as people.

• People base many decisions on socio-cultural rules and identities

Early Product Design

Political candidates• 2008 US Presidential

race: $ 1.6 billion• response to statement

about candidates => vm PFC, the anterior cingulate cortex, the posterior cingulatecortex and the insula

Food products• perception of flavour -> a multisensory integration process • OFC: perceived pleasantness• Insula: viscosity and fat contentCf> Drawback: super-heroin of food

Architecture• Virtual reality => automobile driving• Hippocampal load: when the

subject makes navigation decisions but not when they are externally cued

Entertainment• Film => cognitive

synchronizer• Recall: the strength

of hippocampal and temporal lobe

• Editing process => to release the most profitable movie.

Product Development Cycle

Conclusion and Future direction

1. Hype: Neuroimaging will be more cost-effective than traditional marketing tool

2. MVPA is able to reveal consumer preferences => to boost post-design sales efforts

3. Neuromarketing

1) to coerce the public into consuming products that they neither need nor want

2) to identify new and exciting products that people want and find useful =>”user design”

4. Hope: to foster a more human-compatible design of the products around us