Brain-Powered Marketing www.prophet.com Prophet senior partner James Walker has spent his entire career in marketing consulting, analytics and research. He was fascinated to see neuromarketing becoming more mainstream, so he met up with Hilke Plassmann, the global thought leader in the application of neuroscience to marketing. Hilke is an Assistant Professor of Marketing at INSEAD where she teaches marketing management in France and Singapore in INSEAD’s MBA program, and neuromarketing in INSEAD’s Executive Education Program. She is currently Visiting Faculty at The Wharton School as part of the INSEAD–Wharton alliance. James Walker: Hey Hilke, thanks for coming to dinner. It's going to be great to talk about neuromarketing. So, one of your most famous experiments from your time at Caltech stems from the fact that if you tell people a wine is expensive, then they find it more pleasurable to drink; they actually find the experience more stimulating. Rather than the obvious question that this might be useful to marketing luxury cars, jewelry and so on, I'm actually more interested in this as a sales activation idea. If I tell you this promotion’s a bargain, then you're going to believe it and your brain is going to chemically react pleasantly to the idea of a bargain. I wonder if "sales,” with the opportunity for point of purchase stimulus and the vivid environment of the retailer, might mean neurosales rather than neuromarketing might be a faster practical application of neuroscience? It's easier to tune a brain chemistry change with the "in your face" experience of a retail environment versus the subtlety of advertising? Hilke Plassmann: The fact that we clearly showed that “expectations” have a dramatic impact on how you experience a product illustrates the potential power of communicating “something” – be it a quality expectation or the expectation that this is indeed a bargain. An immediate impulse at the point of purchase is a strong emotion, and the point-of-purchase communication tends to be of something relatively simple (eg: Buy 2, get 1 free) as opposed to something more complicated and strategic in branded communications. I do think that neuromarketing experiments can help in that sales context, and we can also bring in related tools, such as eye-tracking for example, to make POP most effective. Even cleverly designed field experiments can bring a lot to the table in such a setting. The use of biological metrics needs to be carefully thought through – how much can a biological marker really add to the question that a marketer is interested? Some neuromarketing techniques are quite costly with respect to financial and time resources, eg: fMRI using a brain scanner. That is why marketers should think twice before they invest in doing marketing research using these techniques. I personally think that more “big picture” questions such as strategic positioning might be the more interesting context to apply fMRI. James: I suppose I've jumped in a bit quickly with my first question. Let's take a step back. Can you define neuromarketing for us? Hilke: There are a lot of different approaches out there. The umbrella is I guess called “decision neuroscience,” and it’s an interdisciplinary enterprise that helps figure out how humans make decisions. Be it, why they vote a certain way, the foods they choose to eat, choice of spouse, or for a few of us, why consumers make the brand and product choices they do. It includes a range of approaches – everything from eye tracking to looking at brain activity. More theory-driven approaches in this area gave rise to the academic discipline of “consumer neuroscience.” Within this area, practitioners’ attempts in the form of “neuromarketing” can be seen as a form of companyspecific market research that is concerned with taking neuroscience theories and approaches and applying them to brands and product choices. Most famously, neuromarketing companies use electrodes or brain scanners to track responses to TV ads or to look at reactions whilst respondents watch a movie. Neuromarketing can also make use of biometrics to track sweating and heart-rate to suggest how the brain is responding to marketing stimulus. James: So, honestly: Are you a skeptic, a believer, or a wait-and-seer? Hilke: It depends. I am a skeptic of how the techniques are being used now, but very optimistic of where we are heading and what these techniques should be capable of in the future. I think that there are a couple of parts to answering the question. I might be optimistic about the techniques developing successfully, but then there is the supplementary question of really applying the results to 2 business issues. And on this point of harnessing neuromarketing for business decision making, I am perhaps sitting on the fence. So, I am all three! James: Talk me through the spectrum of, say, eye tracking through to actual brain imaging, and some of the flavors along the way and score your skepticism... Hilke: What you see from most companies purporting to be in the neuromarketing space is the application of EEG techniques(which track rapid changes in the brain’s electrical field), because EEG is very good at capturing fast changing responses, eg: split second changes in brain activity watching a movie or a TV commercial. fMRI captures slower changes, and can help look at “where” in the brain a response is happening, and that might be appropriate for looking at different visual identities or brand logos. I would recommend using EEG with other techniques, such as eye tracking, skin conductance and facial expression tracking. I think that makes it more powerful that simply looking at brain activity on its own and figuring out what is good or bad, in particular because of EEG’s limitations to capture moment-to-moment changes in emotional engagement. That helps me be a little less skeptical. There have been studies where the same stimulus (such as a TV ad) has been given to different research agencies, and they have come up with different conclusions as to what is positive/negative about the advertisement. Linking EEG-type techniques with other approaches helps to reassure me about the conclusions of the research. You have to keep in mind that there are a lot of researchers’ degrees of freedom not only for how to set up the studies, but also for how to interpret them and translate them back into business insights. James: I know the clichéd question you must be sick of is that your experiments are a bit artificial. Like someone sat in a lab with a colander on his or her head, all wired up! Hilke: A fair point. The cool thing about doing experiments is that you can isolate what it is that you’re looking for, learn from that, and create incremental experiments. In an ideal world, you’d do something in the lab, take some learnings from that experiment and go on to test these in more real-world settings. Some techniques may be a bit cumbersome for the field, but yield interesting results. If they are telling something fundamental, you can test that a little more lightly in field experiments. James: Can you summarize the lingo for us, and give a one- or two-word thumbs up/down on these techniques: fMRI, EEG, MEG? Hilke: Wow! Ok, to put it simply:  fMRI uses a MRI scanner to scan the brain, just like maybe after a head trauma. We check for levels of brain activity in response to a stimulus, and see where in the brain a response happens.  EEG is a different technique that monitors changes the brain’s electro-magnetic activity using electrodes attached to a consumers head. Most neuromarketing companies take this approach to measure moment-to-moment changes in brain activity (or contrasts left to right) when consumers see a commercial, see the products at the point-of-sale etc.  MEG is pretty similar to EEG. It is probably worth making the point that these are the more extreme manifestations of neuromarketing. In a sense, focus groups, depth interviews or retail safaris are all research techniques seeking to better understand the human decision process. Techniques like eye tracking or biometrics are just another notch incrementally more ‘”scientific” in what “signal” they measure than a focus group, and the EEG a notch further still. But they all exist of a continuum of sophistication of technique to try to answer the same questions, or more precisely different aspects of the same question. I really would like to emphasize that I don’t see biological markers as a silver bullet that will replace existing market research techniques. It is much more adding another, new and very valuable dimension. But the key is really in combining different approaches. James: What's genuinely surprised you in what you've learned? What's been a breakthrough learning that could be harnessed by a marketer that might have been missed by other research techniques? I've sat through many retail conferences where shopping-safari video footage shows guys checking out girls' bottoms, and I worked on eye tracking studies of press adverts and, well...er, there were similarly base conclusions! Do you fear the more we 3 connect marketing with raw human emotion (literally the brain's chemical response) that in some ways the resulting communications strategy will actually be dumbed down? For instance, fast car, pretty girl, sunny beach? It's the end of advertising as art, and now it's all a bit Jack Vettriano, or paint by numbers, to press the right neural receptors. Hilke: So I think the wine study is something fundamental and amazing. It shows the power of expectations setting, or what we call marketing (which is really just expectations setting). In a MRI scanner, and I’ve really done this, you see the brain respond in a different way to an expensive wine, and that is pretty incredible. But, I think it’s oversimplified to think that these techniques can create a kit for painting by numbers, where there are buttons to press to create an identikit, optimized, ad. There will always be creativity in advertising. Appealing to the base urges of the brain might in theory create successful marketing communication, but if it’s crass that’ll be more of a negative than a turn on. James: Ok. What can a marketer do tomorrow morning to dip a toe in the water of neuromarketing? What can they do to get started? Hilke: Two things - 1) Method-wise: Eye tracking. What is it they are looking at, for how long? What gets visual attention? I’m a bit skeptical about how EEG is used right now. I would also think that neuromarketing can help better structure conventional market research. 2) Reading about how the brain works to inform how you can create superior value for your customers, how you design products of value to them, how you can communicate this value etc. James: What kinds of marketing and sales questions do you think eventually neuroscience will be best able to answer? Hilke: For sure, in the future this will help us predict behavior without having to ask people the direct question. I think we will be able to predict the attractiveness of innovations and new product features, for example. James: And what are the "watch-outs?" How do you spot the charlatans? Is there a checklist you'd suggest in terms of who to work with, dos/don'ts for picking a neuromarketing vendor? Hilke: I think they need to have some academic support. An academic expert onboard as part of the team, papers published in peer-reviewed journals (white papers on the company’s home page are a nice-to-know, but don’t count in this context!) and independently moderated. James: I suppose it's a bit like the best CRM analytics: consumers shouldn't be wary that marketing communications has be tuned up by looking at brain reactions - all this is trying to do is best meet their needs. It's a bit like dating: If only we could fine-tune the input required to trigger the brain chemistry change we're looking for. Do men and women respond very differently to marketing stimulus? Hilke: Yes, only in that they respond to different contexts, eg: a woman might be more interested in clothes and makeup than a man, and so because they have different interests they respond to differently stimuli. It’s not to say that men and women respond differently per se. The brain does behave in a different way depending on context. Preferences are constructed within context, and that’s an important point to make. James: Any ethical issues? Is it like using a lie detector, but to perfect the design of web pages, size of logo etc? Hilke: No, I don’t think so. Is there an ethical issue in market research, asking people about their “secrets?” James: So you just talked about context. Do you think your learnings will be universal across countries or social class? Would the wine experiment work in the Favelas of Sao Paulo or on the football terraces of Hamburg? What about context or mode or mood? Surely the brain behaves differently depending on what it wants? If you’re told a wine is expensive but what you really want is a beer, would the experiment work? We’re drinking a Tenuta San Guido, which tastes great to me here at dinner in Manhattan, but surely on a boat on sunny day you’d really want a cold beer, and no matter how fancy the wine it’s just not quite what you want? 4 Hilke: Yes, there are some cultural differences. For example, it is better to promote healthy eating by saying healthy eating is better or that unhealthy is worse. In the US for example, we tend to frame this more in terms of a positive, “Hey, it’s better to eat this or that.” In Asia, it’s more, “Don’t do this.” I think my key point is about expectations being fulfilled – and that is universal, even if the exact mechanism for how it happens is influenced by culture and context. James: So, the application to communications is obvious and I think also to sales. What about the use of neuromarketing for the development of concepts, or a more subtle set of expressions of a brand identity? Could neuromarketing help test a range of value propositions and positionings for a Telco wanting to re-launch? Hilke: Yes, for sure. I think many people would say neuromarketing is better suited to help test, for example, a range of value propositions and positioning for a Telco wanting to re-launch as opposed to communications content. Better maybe for a logo or company positioning, or a response to a retail concept. James: Final question. Has your research changed how you respond to marketing? If you're aware and conscious, of this fragrance ad with a hot guy actually changing your brain chemistry, do you think you're trained now to be a bit immune to advertising? Hilke: Yes. I am aware of the importance of expectations, and how expectations will influence behaviors. If I have an important meeting, I will dress formally, as it impacts how I feel and also sets expectations as to how other people will interact with me. I am not immune to advertising, but I am conscious of expectations being set. And the end of the day, a lot of people in my community research what they are NOT good at. So, if you hire an academic consultant for a project, your first question should be what his/her dissertation was about! James: Thanks Hilke. This has been so much fun, and I've learnt a lot. Is there a question you wish I'd ask you? Hilke: Yes, if I may, what are Prophet’s expectations of neuromarketing? James: We want to be involved. We’re looking at developing customer experiences that include tactile and scent signature elements for example, and I think neuromarketing research can help us with these things. I personally am in the skeptic camp for the moment, but I’m keen to be involved in these kinds of research and analytics to help our clients. My final thought returns to your famous wine experiment. I wonder if we’ll enjoy the dessert wine now more or less after a bottle of mid-price Sassicaia?! James Walker (jmwalker@prophet.com) is a Senior Partner at Prophet, a strategic brand and marketing consultancy.

Brain-Powered Marketing
www.prophet.com
Prophet senior partner James Walker has spent his entire
career in marketing consulting, analytics and research. He
was fascinated to see neuromarketing becoming more
mainstream, so he met up with Hilke Plassmann, the global
thought leader in the application of neuroscience to
marketing. Hilke is an Assistant Professor of Marketing at
INSEAD where she teaches marketing management in
France and Singapore in INSEAD’s MBA program, and
neuromarketing in INSEAD’s Executive Education
Program. She is currently Visiting Faculty at The Wharton
School as part of the INSEAD–Wharton alliance.
James Walker: Hey Hilke, thanks for coming to dinner. It's
going to be great to talk about neuromarketing. So, one of
your most famous experiments from your time at Caltech
stems from the fact that if you tell people a wine is
expensive, then they find it more pleasurable to drink; they
actually find the experience more stimulating. Rather than
the obvious question that this might be useful to marketing
luxury cars, jewelry and so on, I'm actually more interested
in this as a sales activation idea. If I tell you this
promotion’s a bargain, then you're going to believe it and
your brain is going to chemically react pleasantly to the
idea of a bargain. I wonder if "sales,” with the opportunity
for point of purchase stimulus and the vivid environment of
the retailer, might mean neurosales rather than
neuromarketing might be a faster practical application of
neuroscience? It's easier to tune a brain chemistry change
with the "in your face" experience of a retail environment
versus the subtlety of advertising?
Hilke Plassmann: The fact that we clearly showed that
“expectations” have a dramatic impact on how you
experience a product illustrates the potential power of
communicating “something” – be it a quality expectation or
the expectation that this is indeed a bargain. An immediate
impulse at the point of purchase is a strong emotion, and
the point-of-purchase communication tends to be of
something relatively simple (eg: Buy 2, get 1 free) as
opposed to something more complicated and strategic in
branded communications. I do think that neuromarketing
experiments can help in that sales context, and we can
also bring in related tools, such as eye-tracking for
example, to make POP most effective. Even cleverly
designed field experiments can bring a lot to the table in
such a setting. The use of biological metrics needs to be
carefully thought through – how much can a biological
marker really add to the question that a marketer is
interested? Some neuromarketing techniques are quite
costly with respect to financial and time resources, eg:
fMRI using a brain scanner. That is why marketers should
think twice before they invest in doing marketing research
using these techniques. I personally think that more “big
picture” questions such as strategic positioning might be
the more interesting context to apply fMRI.
James: I suppose I've jumped in a bit quickly with my first
question. Let's take a step back. Can you define
neuromarketing for us?
Hilke: There are a lot of different approaches out there.
The umbrella is I guess called “decision neuroscience,” and
it’s an interdisciplinary enterprise that helps figure out how
humans make decisions. Be it, why they vote a certain
way, the foods they choose to eat, choice of spouse, or for
a few of us, why consumers make the brand and product
choices they do. It includes a range of approaches –
everything from eye tracking to looking at brain activity.
More theory-driven approaches in this area gave rise to the
academic discipline of “consumer neuroscience.” Within
this area, practitioners’ attempts in the form of
“neuromarketing” can be seen as a form of companyspecific
market research that is concerned with taking
neuroscience theories and approaches and applying them
to brands and product choices. Most famously,
neuromarketing companies use electrodes or brain
scanners to track responses to TV ads or to look at
reactions whilst respondents watch a movie.
Neuromarketing can also make use of biometrics to track
sweating and heart-rate to suggest how the brain is
responding to marketing stimulus.
James: So, honestly: Are you a skeptic, a believer, or a
wait-and-seer?
Hilke: It depends. I am a skeptic of how the techniques are
being used now, but very optimistic of where we are
heading and what these techniques should be capable of
in the future. I think that there are a couple of parts to
answering the question. I might be optimistic about the
techniques developing successfully, but then there is the
supplementary question of really applying the results to
2
business issues. And on this point of harnessing
neuromarketing for business decision making, I am
perhaps sitting on the fence. So, I am all three!
James: Talk me through the spectrum of, say, eye tracking
through to actual brain imaging, and some of the flavors
along the way and score your skepticism...
Hilke: What you see from most companies purporting to
be in the neuromarketing space is the application of EEG
techniques(which track rapid changes in the brain’s
electrical field), because EEG is very good at capturing fast
changing responses, eg: split second changes in brain
activity watching a movie or a TV commercial. fMRI
captures slower changes, and can help look at “where” in
the brain a response is happening, and that might be
appropriate for looking at different visual identities or brand
logos. I would recommend using EEG with other
techniques, such as eye tracking, skin conductance and
facial expression tracking. I think that makes it more
powerful that simply looking at brain activity on its own and
figuring out what is good or bad, in particular because of
EEG’s limitations to capture moment-to-moment changes
in emotional engagement. That helps me be a little less
skeptical. There have been studies where the same
stimulus (such as a TV ad) has been given to different
research agencies, and they have come up with different
conclusions as to what is positive/negative about the
advertisement. Linking EEG-type techniques with other
approaches helps to reassure me about the conclusions of
the research. You have to keep in mind that there are a lot
of researchers’ degrees of freedom not only for how to set
up the studies, but also for how to interpret them and
translate them back into business insights.
James: I know the clichéd question you must be sick of is
that your experiments are a bit artificial. Like someone sat
in a lab with a colander on his or her head, all wired up!
Hilke: A fair point. The cool thing about doing experiments
is that you can isolate what it is that you’re looking for,
learn from that, and create incremental experiments. In an
ideal world, you’d do something in the lab, take some
learnings from that experiment and go on to test these in
more real-world settings. Some techniques may be a bit
cumbersome for the field, but yield interesting results. If
they are telling something fundamental, you can test that a
little more lightly in field experiments.
James: Can you summarize the lingo for us, and give a
one- or two-word thumbs up/down on these techniques:
fMRI, EEG, MEG?
Hilke: Wow! Ok, to put it simply:
 fMRI uses a MRI scanner to scan the brain, just
like maybe after a head trauma. We check for
levels of brain activity in response to a stimulus,
and see where in the brain a response happens.
 EEG is a different technique that monitors
changes the brain’s electro-magnetic activity
using electrodes attached to a consumers head.
Most neuromarketing companies take this
approach to measure moment-to-moment
changes in brain activity (or contrasts left to right)
when consumers see a commercial, see the
products at the point-of-sale etc.
 MEG is pretty similar to EEG. It is probably worth
making the point that these are the more extreme
manifestations of neuromarketing. In a sense,
focus groups, depth interviews or retail safaris are
all research techniques seeking to better
understand the human decision process.
Techniques like eye tracking or biometrics are just another
notch incrementally more ‘”scientific” in what “signal” they
measure than a focus group, and the EEG a notch further
still. But they all exist of a continuum of sophistication of
technique to try to answer the same questions, or more
precisely different aspects of the same question. I really
would like to emphasize that I don’t see biological markers
as a silver bullet that will replace existing market research
techniques. It is much more adding another, new and very
valuable dimension. But the key is really in combining
different approaches.
James: What's genuinely surprised you in what you've
learned? What's been a breakthrough learning that could
be harnessed by a marketer that might have been missed
by other research techniques? I've sat through many retail
conferences where shopping-safari video footage shows
guys checking out girls' bottoms, and I worked on eye
tracking studies of press adverts and, well...er, there were
similarly base conclusions! Do you fear the more we
3
connect marketing with raw human emotion (literally the
brain's chemical response) that in some ways the resulting
communications strategy will actually be dumbed down?
For instance, fast car, pretty girl, sunny beach? It's the end
of advertising as art, and now it's all a bit Jack Vettriano, or
paint by numbers, to press the right neural receptors.
Hilke: So I think the wine study is something fundamental
and amazing. It shows the power of expectations setting,
or what we call marketing (which is really just expectations
setting). In a MRI scanner, and I’ve really done this, you
see the brain respond in a different way to an expensive
wine, and that is pretty incredible. But, I think it’s
oversimplified to think that these techniques can create a
kit for painting by numbers, where there are buttons to
press to create an identikit, optimized, ad. There will
always be creativity in advertising. Appealing to the base
urges of the brain might in theory create successful
marketing communication, but if it’s crass that’ll be more
of a negative than a turn on.
James: Ok. What can a marketer do tomorrow morning to
dip a toe in the water of neuromarketing? What can they
do to get started?
Hilke: Two things -
1) Method-wise: Eye tracking. What is it they are
looking at, for how long? What gets visual
attention? I’m a bit skeptical about how EEG is
used right now. I would also think that
neuromarketing can help better structure
conventional market research.
2) Reading about how the brain works to inform
how you can create superior value for your
customers, how you design products of value to
them, how you can communicate this value etc.
James: What kinds of marketing and sales questions do
you think eventually neuroscience will be best able to
answer?
Hilke: For sure, in the future this will help us predict
behavior without having to ask people the direct question. I
think we will be able to predict the attractiveness of
innovations and new product features, for example.
James: And what are the "watch-outs?" How do you spot
the charlatans? Is there a checklist you'd suggest in terms
of who to work with, dos/don'ts for picking a
neuromarketing vendor?
Hilke: I think they need to have some academic support.
An academic expert onboard as part of the team, papers
published in peer-reviewed journals (white papers on the
company’s home page are a nice-to-know, but don’t
count in this context!) and independently moderated.
James: I suppose it's a bit like the best CRM analytics:
consumers shouldn't be wary that marketing
communications has be tuned up by looking at brain
reactions - all this is trying to do is best meet their needs.
It's a bit like dating: If only we could fine-tune the input
required to trigger the brain chemistry change we're
looking for. Do men and women respond very differently to
marketing stimulus?
Hilke: Yes, only in that they respond to different contexts,
eg: a woman might be more interested in clothes and
makeup than a man, and so because they have different
interests they respond to differently stimuli. It’s not to say
that men and women respond differently per se. The brain
does behave in a different way depending on context.
Preferences are constructed within context, and that’s an
important point to make.
James: Any ethical issues? Is it like using a lie detector,
but to perfect the design of web pages, size of logo etc?
Hilke: No, I don’t think so. Is there an ethical issue in
market research, asking people about their “secrets?”
James: So you just talked about context. Do you think
your learnings will be universal across countries or social
class? Would the wine experiment work in the Favelas of
Sao Paulo or on the football terraces of Hamburg? What
about context or mode or mood? Surely the brain behaves
differently depending on what it wants? If you’re told a
wine is expensive but what you really want is a beer, would
the experiment work? We’re drinking a Tenuta San Guido,
which tastes great to me here at dinner in Manhattan, but
surely on a boat on sunny day you’d really want a cold
beer, and no matter how fancy the wine it’s just not quite
what you want?
4
Hilke: Yes, there are some cultural differences. For
example, it is better to promote healthy eating by saying
healthy eating is better or that unhealthy is worse. In the
US for example, we tend to frame this more in terms of a
positive, “Hey, it’s better to eat this or that.” In Asia, it’s
more, “Don’t do this.” I think my key point is about
expectations being fulfilled – and that is universal, even if
the exact mechanism for how it happens is influenced by
culture and context.
James: So, the application to communications is obvious
and I think also to sales. What about the use of
neuromarketing for the development of concepts, or a
more subtle set of expressions of a brand identity? Could
neuromarketing help test a range of value propositions and
positionings for a Telco wanting to re-launch?
Hilke: Yes, for sure. I think many people would say
neuromarketing is better suited to help test, for example, a
range of value propositions and positioning for a Telco
wanting to re-launch as opposed to communications
content. Better maybe for a logo or company positioning,
or a response to a retail concept.
James: Final question. Has your research changed how
you respond to marketing? If you're aware and conscious,
of this fragrance ad with a hot guy actually changing your
brain chemistry, do you think you're trained now to be a bit
immune to advertising?
Hilke: Yes. I am aware of the importance of expectations,
and how expectations will influence behaviors. If I have an
important meeting, I will dress formally, as it impacts how I
feel and also sets expectations as to how other people will
interact with me. I am not immune to advertising, but I am
conscious of expectations being set. And the end of the
day, a lot of people in my community research what they
are NOT good at. So, if you hire an academic consultant
for a project, your first question should be what his/her
dissertation was about!
James: Thanks Hilke. This has been so much fun, and I've
learnt a lot. Is there a question you wish I'd ask you?
Hilke: Yes, if I may, what are Prophet’s expectations of
neuromarketing?
James: We want to be involved. We’re looking at
developing customer experiences that include tactile and
scent signature elements for example, and I think
neuromarketing research can help us with these things. I
personally am in the skeptic camp for the moment, but I’m
keen to be involved in these kinds of research and
analytics to help our clients. My final thought returns to
your famous wine experiment. I wonder if we’ll enjoy the
dessert wine now more or less after a bottle of mid-price
Sassicaia?!
James Walker (jmwalker@prophet.com) is a Senior Partner
at Prophet, a strategic brand and marketing consultancy.