Can Neuromarketing Really Offer You Useful Customer Insights?

In a world of irrational decision making and ever increasing sophistication of immersive brand experiences, how do you know what your customers are thinking? Dr. Joseph Devlin, UCL, and Guerric de Ternay (LBS MIM 2015) sat down with the London Entrepreneurship Review to explain the promise and science of neuromarketing.

We’re lucky in London. We may not have the 5th Avenue or Mad Men, nor their tendency to drink a lot of bourbon. But we do have a dynamic marketing industry and one of the top neuroscience hubs in the world: University College London (UCL).

Having generated over 30% of the country’s contribution to the most prestigious publications in neuroscience, UCL is Europe’s research powerhouse in neuroscience and is ranked number two in the world within this field.

What we love here is that marketers and neuroscientists are next-door to each other, in Central London. Those are the perfect ingredients for a promising cocktail: making London the number one place for neuromarketing.

But here’s the question. Is neuromarketing worth it?

What Would You Do?

Imagine that you’re in charge of a brand that sells premium consumer goods. A new product is coming and you have to prepare the marketing campaigns.

Will you encourage your customers to run a thorough cost-benefit calculation, comparing your product with its competitors? Or do you choose to approach your marketing strategy playing with a clever combination of branding, positioning, and customer experience?

Presumably you choose the second option. Once you’ve decided to appeal to your customers with an emotionally attractive message, you want to measure and even predict how your ad copies, your brand, and your packaging are performing. How do you do that?

Pursuing Marketing Research on Irrational Consumers

How do you predict the performance of your marketing strategy when you have to deal with customers who make decisions based on emotions, mental short cuts, and hidden biases without even being aware?

You’re right. The old idea of the rational consumer is appealing. But let’s face reality: Consumers aren’t rational decision makers.

As marketers, we’ve all been relying on traditional market research methods such as focus groups, surveys, and Net Promoter Score (NPS). These are our main sources of customer insights.

But these methods are limited. Consumers come with their biases and lack of awareness; they don’t share all the information; and they are not able to translate their decisions into words. All these flaws are due to the fact that an important part of the decision-making process is unconscious.

Enter neuromarketing. The potential to look directly to the brain for answers has enormous appeal. It offers the promise of bypassing the limitations of the conscious mind and of directly measuring the emotion, attention, and memory factors that influence decision making.

That privileged access to actionable customer insights could be applied in promotions, advertising, customer experience, product design, brand image, and more.

Does Neuromarketing Really Work?

You may be thinking: “This sounds too good to be true — does it really work?” And you’re right to be skeptical. Neuromarketing definitely hasn’t reached its full promise, but it’s still early days and there have been some impressive steps forward.

Like all new technologies, neuromarketing is following a predictable trajectory, namely the Gartner Hype Cycle. The initial excitement of consumer neuroscience led to inflated expectations, with neuroscience hailed as the answer to essentially all marketing problems.

People are not robots helpless in the face of marketing acumen; there is no “buy button” in the brain.

Some of the hype simply led to disillusionment with high profile neuromarketing failures such as Martin Lindstrom’s claim that “you love your iPhone, literally” (no!) or Porsche’s claim that driving their cars is almost as exciting as flying a fighter jet (hell no!).

So where does the truth lie? Is there good neuromarketing? And if so, what types of customer insights does it have to offer?

Yes! It Works

Neuromarketing is really good at going a step further. It helps marketers get precise answers and complements customer insights from traditional marketing research methods.

One of the first concrete neuromarketing experiments was conducted by Read Montague, a neuroscientist at Baylor College of Medicine. He ran a version of the Pepsi Challenge in a magnetic resonance imaging (MRI) brain scanner. Volunteers drank two identical colas with one labeled as Coke, even though both were actually Pepsi. A majority of participants claimed to enjoy the “Coke” more. They also showed increased activity in the prefrontal cortex of their brains.

In other words, the experiment confirmed what business people have known for ages, namely that branding can strongly influence consumer preferences. It went even further by demonstrating how brand information affects brain circuits involved in decision-making.

What’s important to remember is that the same experiment can be conducted with your brand. Is your brand better perceived than the competition? Neuromarketing can give you a precise answer.

Can Neuromarketing Predict Consumer Purchase Decisions?

Paul Glimcher, a founder of neuroeconomics, took this a step further. In his experiment, volunteers lay in an MRI scanner and passively viewed pictures of consumer goods such as DVDs, music CDs, art posters, etc., while silently thinking how much they would be willing to pay for the items.

Outside of the scanner, the same volunteers ranked how desirable each item was.

What Glimcher found was that within an individual, their own brain activity could be used to successfully predict their consumer choices. In other words, measuring brain responses while people simply viewed the products was sufficient to know which items they would purchase.

It was an amazing result and showed that two brain regions — the prefrontal cortex and the ventral striatum — seem to encode the value that an individual places on an item. The question that immediately arises is: can brain scans from a small group of participants be used to predict consumer behavior on a larger scale?

Can Neuromarketing Predict Consumer Behavior?

Vinod Venkatraman and his colleagues at the Fox School of Business have gone a long way to answering that very question. They aimed to validate the effectiveness of six different methods for assessing responses to 30-second television ads. Traditional self-reports, implicit measures such as heart rate and skin conductance, eye-tracking, biometrics, EEG, and functional MRI were all used to determine how well the measured responses predicted real-world, market-level responses to advertising.

Of all of the methods, only functional MRI provided a significant improvement in predictive power over traditional surveys. Specifically, activation in the ventral striatum, a part of the brain’s reward system, helped predict consumer behavior.

And This Is Just the Beginning

These examples are exciting because they truly begin to combine outstanding neuroscience with real-world marketing acumen.

While neuromarketing may not provide all the answers to consumer decision making, it does complement traditional marketing techniques and provide novel customer insights that can help you make business decisions.

The difficulty, however, lies in separating good consumer neuroscience from the pseudoscience — the neuro-nonsense that surrounds it.

The LER would like to thank and acknowledge Sibo Wei (MIM 2016) for making this article possible.

Originally published at