Marketers are always looking for ways to understand consumers and their sometimes-confounding decisions.
Neuroscience, the study of how the brain and nervous system function, seems to offer a crucial edge: a way to predict when and how customers will ignore common sense and the laws of economics.
“People are irrational,” said Dr. Moran Cerf, a professor of neuroscience and business at the Kellogg School of Management at Northwestern University in Evanston, Ill. “For economists, money is money. But for people, it’s not.”
Cerf, whose students have been hired by firms such as Google and Snapchat, and Lindsay Zaltman, CEO of marketing firm Olson Zaltman, spoke to businesspeople and gaming executives in Las Vegas recently to explain how neuroscience can help companies market to seemingly irrational humans.
An example of consumer irrationality, Cerf said, is the lost-ticket dilemma. If someone loses a $20 movie ticket, they tend to be reluctant to buy another, because a $20 movie is now costing them $40. Their attitude changes, however, if they lose $20 cash on the way to the theater instead of a ticket. In that case, people are more willing to spend another $20 and buy the ticket.
The laws of economics say the value of the lost ticket and the lost cash are the same, so the behavior should be the same. However, as Cerf said in a speech in downtown Las Vegas last month, the amount of money at risk is only one of many factors people consider when making a purchase.
“People might travel two or three blocks to save money on something like a watermelon,” he said. “But they won’t travel that same distance to save the same amount of money when buying something expensive like a Ferrari. Why? The amount of money is the same. What we feel about a purchase is part of the equation.”
This irrationality makes life difficult for marketers, because people many times can’t explain why they choose one option over another. And that’s because, neuroscience says, many human decisions are made at a subconscious level.
Renowned neuroscientist David Eagleman has described the conscious mind as merely a summary, an abbreviated and incomplete listing, of what’s going on in our heads.
“There’s an enormous gap between what your mind has access to and what is actually happening in your brain,” Eagleman said.
In an online lecture, Eagleman described an experiment that reveals the power of the subconscious. In it, men were asked to look at dozens of images of women and rate them as more or less attractive.
Some of the images were nearly identical — featuring the same woman in the same pose — with one small difference. Researchers used eye drops to dilate some of the women’s pupils just prior to the photo shoot.
The men couldn’t explain why, but more often than not they chose the images with dilated pupils. That’s because, Eagleman said, separate research has shown people subconsciously perceive dilated pupils as a sign of sexual receptiveness.
In his presentation, “Finding the Hidden Drivers of Player Behavior: Using Neuroscience to Improve Your Casino’s Operations, Marketing and Bottom Line,” Zaltman pointed out that 95 percent of what people think and feel is hidden in the subconscious.
It’s something, he said, that traditional consumer research techniques fail to address.
“People are realizing that current tools are failing to develop deep insights and are failing to deliver and create customer demand,” Zaltman said. “Surveys serve a purpose, but they don’t serve all our needs or as many as we like to think they do.”
Techniques developed in neuroscience, Cerf and Zaltman said, allow them to track subconscious reactions. Modern medical and scientific research tools make it possible to see, often in real time, how consumers’ brains respond to advertising, websites or phone apps.
In their lectures, Zaltman and Cerf described some of the tools they use.
Functional magnetic resonance imaging
Functional magnetic resonance imaging (FMRI) is similar to magnetic resonance imaging used to diagnose medical issues. However, MRIs reveal the structure of the brain; an FMRI can track changes in blood flow in the brain over time. By tracking these changes, FMRIs can create a map (sometimes an animation) of the brain’s activity while people are looking at marketing material.
According to Zaltman, FMRIs are effective at revealing primal emotional responses to stimuli. But FMRI studies are expensive — in the $100,000 range — and often take months to complete.
Specialists also are needed to analyze the data and, even then, the results can be subjective. In addition, the test subjects have to watch the advertising while lying in an MRI machine — not the most natural environment.
Electroencephalography
Electroencephalography, in which technicians use electrodes to record electrical activity in the brain, has been around for decades. EEGs can measure the emotional engagement and attention level of subjects as they respond to advertising.
The procedure has become more marketing-friendly as modern EEG systems use flexible helmets placed to measure brainwaves rather than electrodes taped to scalps.
EEGs are a far more convenient and portable option than FMRI testing. They’re also cheaper, Zaltman said, costing $30,000-$60,000.
There are limits, however. Although it’s less awkward than lying in an MRI machine, watching a television ad while wearing an EEG helmet is still an unnatural experience. Also, specialists are still needed to interpret the data. In addition, EEGs measure surface activity, not what’s happening in the deeper levels of the brain.
Eye tracking
Special glasses now allow researchers to track where and when people’s eyes focus on specific points on websites, apps, store displays or advertising.
Eye tracking is good for measuring emotional engagement and attention level, and is far more convenient than both the FMRI and EEG techniques, Zaltman said. It’s also cheaper, costing $15,000-$25,000.
The technique also is relatively easy to understand, even for nonspecialists, and can measure tasks such as completing a web form in real time. But eye tracking only reveals what someone looks at, not why they looked at it. It doesn’t provide a clue about the underlying emotional responses of the person being tested.