Belden - Journal of Mind Theory Vol. 0 No. 2 249
Science is Culture:
Neuroeconomics and Neuromarketing.
Practical Applications and Ethical
Concerns
By Sarah Rebecca Anne Belden
1 Introduction
Neuroeconomics is a relatively new transdisciplinary field, which developed
out of Neuroscience. This burgeoning discipline analyses our brain activity
when we calculate risks and evaluate rewards, and utilizes brain-scanning
technology to study how people make decisions, evaluate personal choices
and even decide which products to buy. Since the late 1990’s a group of interdisciplinary
scholars have begun to combine social and natural scientific approaches
in this emerging discipline, combining both theoretical and empirical
tools from neuroscience, psychology and economics into a single approach.
The resulting synthesis has provided insights valuable to all three
parent-disciplines, which recently conducted studies, seem to support. Often
utilizing a variety of neuroimaging techniques and interventions such as
fMRI, PET, MEG and EEG, ERP and SSPT, scientific researchers in this new
field have sought to better understand the decision-making processes of individuals
in order to build more precise economic behavioral models. These
combined theories have already begun to restructure our neurobiological understanding
of the decision-making process, and concurrently a number of
recent neurobiological findings have provided great insight into some of the
already existing theories in the psychological and economic branches of this
discipline.
Since the 1990’s however, a newer and more radical branch of Neuroeconomics
has been born called Neuromarketing, which is aimed at revealing consumer
preferences using these same brain-imaging techniques. Rather than
simply trying to use science to better understand the decision-making processes
of individuals, these neuromarketing studies test subjects’ reactions to
certain stimuli, which are then recorded with the aim of revealing consumer
preferences. The results of these experiments are aimed at building targeted
250 Belden - Journal of Mind Theory Vol. 0 No. 2
advertising campaigns, designing new consumer products and shopping environments
and even determining the reasoning behind subjects’ preferences
to certain brands such as Coke or Pepsi.
While this may be good news for Madison Avenue and the billion dollar advertising
and marketing industries, as well as those corporations who employ
these companies to help sell their products, the very idea of using brain scans
to determine our private and personal predilections for the purpose of selling
us more products seems rather invasive, if not Orwellian to say the least. Not
only are there ethical concerns surrounding this new area of study, regarding
the practical applications and their likely implications for individuals and
society, but even more alarming, is the gusto with which the press, marketing
firms, and Big Business have embraced the idea of “peering inside peoples
heads” in order to better pin point their needs, desires and preferences as consumers.
The idea of a “hard science,” which can be utilized to uncover the
holy grail of marketing or a magic “buy button” in our brain, is just too good
for these industries to pass up, not to mention the scientists who have much to
gain from peddling, what some call, pseudoscience for profit. At this stage
neuromarketing is far from a “hard science” and the public should maintain a
healthy dose of skepticism with regard to the practical applications of these
neuroimaging techniques, which require many layers of signal processing,
statistical analysis and a complex set of assumptions in order to interpret the
psychological significance of these brain scans. But the public should also be
aware of the ethical implications of this new type of neuroscience: how it is
utilized; what its applications are; whether or not these new techniques are
invasive and what the possible implications for society may be.
Hailed by some leading market researchers as the most important advance in
their industry for a century, Neuromarketing has already been dismissed by
skeptical neuroscientists as verging on a pseudo-scientific scam. A recent editorial
in Nature Neuroscience, for example, suggested that many cognitive scientists
who had watched colleagues in molecular science grow rich were now
‘jumping on the commercial bandwagon,’ adding that, “According to this
view, neuromarketing is little more than a new fad, exploited by scientists and
marketing consultants to blind corporate clients with science.” Despite this,
interest in Neuromarketing is growing rapidly. In 1998 less than 20 papers a
year were published that examined the brain and decision-making, however,
by 2008 nearly 200 articles relating to this particular area of study had been
published. As reported in Advances in Clinical Neuroscience and Rehabilitation
magazine there has been a marked increase in the number of articles in scientific
journals and congresses organized around this new topic; entire issues
have been devoted to neuromarketing in advertising and marketing trade
publications; and it has even been reported that several new fMRI facilities,
intended for Neuromarketing rather than medical purposes were opened in
2005 alone, in the United States. This is evidence enough to sound the alarm,
however, while the public seems well aware of the ethical issues surrounding
new scientific advances in molecular genetics, there has been little public
awareness with regard to the ethical implications of neuroscience and neuromarketing.
Belden - Journal of Mind Theory Vol. 0 No. 2 251
2 Short History of Neuroeconomics
The first paper to explicitly combine neuroscientific data and a rigorous
mathematical theory from the social sciences was Peter Shizgal and Kent
Conover’s 1996 review in Current Directions in Psychological Science: “On the
neural computation of Utility.” This paper sought to describe the neurobiological
substrate for choice in rats using a normative economic theory. In
1999 this was followed by Michael Platt and Paul Glimcher’s publication of
“Neural correlates of decision variables in parietal cortex” which described a
formal economic-mathematical approach for the physiological study of the
sensory-motor process, or decision-making. This paper demonstrated that the
activity of individual neurons in the posterior parietal cortex encoded both the
probability and magnitude of reward, as would be predicted by most economic
theories if these neurons participated in decision-making. This was
rapidly followed by a multitude of papers uniting both economic and psychological
theories with measurements in human and animal brains.
The first of these neuroeconomic studies in humans were a pair of papers
published in 2001, which reflected collaboration between the fMRI pioneers
Hans Breiter, Shizgal, and the Princeton psychologist/economist Daniel Kahneman
(who would win the Nobel prize for his contribution to behavioral
economics the following year). That paper employed the psychological Prospect
theory of choice developed by Kahneman. The second of these papers
reflected collaboration between the economists Kevin McCabe, his colleague
Vernon Smith and a team that included economists, a psychologist and a biomedical
engineer (McCabe et al., 2001). This study represented the first use of
game theory in a human neurobiological experiment. In that paper, subjects
played a trust game either against anonymous human opponents or against a
computer. The neurobiological data revealed that in some subjects the medial
prefrontal cortex is more active when subjects play a cooperative strategy than
when they show a lack of trust in their game theoretic opponent.
Since the publication of these studies, perhaps the most critical insight has
been evidence that the decision-making systems of the brain can be viewed as
a two-part system. The first of these two parts are made up of the frontal cortex
and the basal ganglia, the areas that learn and compute the values of available
actions. The outputs of these structures are subsequently passed to the
second part of the system; the fronto-parietal circuits, which then decide between
the options and pass this information along to the motor system for
execution. These are the areas that ultimately contribute to our decision making
process.
With this plethora of research, Neuroeconomics has seen a steady growth.
Today, a number of Centers for the study of Neuroeconomics have emerged at
Universities throughout the world. In addition to these research centers, The
Society for Neuroeconomics established itself as the main center for this
emerging discipline in 2005. In 2009 the Society published, in collaboration
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with Academic Press, “Neuroeconomics: Decision-Making and the Brain,”
which now serves both as a textbook for many graduate courses in Neuroeconomics,
as well as a Handbook of Neuroeconomics for researchers in the
field.
3 Short History of Neuromarketing
Neuroeconomics is a purely academic discipline concerned with the basic
mechanisms of decision-making. In contrast, Neuromarketing is a more applied
field concerned with the application of brain scanning technology to the
traditional goals and questions of interest of the marketing industry. While
the notion of Neuromarketing has been around for some 30 odd years, Professor
Ale Smidts from Erasmus University is said to have first coined the term
in 2002, and the first marketer to use fMRI was Gerry Zaltman at Harvard
University beginning in 1999. The first marketing conference, which focused
on the burgeoning field of Neuromarketing in 2004, was held at Baylor College
of Medicine in Houston. While the most utilized and well recognized
brain-imaging techniques are fMRI (functional magnetic resonance imaging),
QEEG (Quantitative electroencephalography) and MEG (magneto encephalography),
earlier forms of these techniques were being utilized as early as the
late 1960’s.
Before the development of these more sophisticated technologies researchers
used pupilometers – devices that measure spontaneous pupil dilation as indicators
of peoples’ interest while they were looking at advertising or print advertisements.
During this time, researchers also employed the use of GSR
(Galvanic Skin Response) as a possible indicator of people’s emotional response
to advertisements. Later, new technology for eye tracking was developed
which revealed exactly where on the page (or TV screen) people’s eyes
were focused. And finally, in the 1970’s Herbert Krugman and Flemming
Hansen began to explore processes that occur in the right/left brain hemispheres
using electroencephalograph (EEG) brain wave technology. Each of
these technologies was heralded at the time as groundbreaking, however none
of these found widespread use for the purpose of marketing.
In 1981 SST (Steady State Topography) was utilized by Professor Richard Silberstein
at Swinburne University, where he used this technology in clinical
applications for possible use in marketing. The latest, and perhaps most
widely known technologies are fMRI (functional magnetic resonance) and
MEG (magneto-encephalography) which are both utilized as brain scanning
devices. Both technologies show which areas of the brain “light up” when
stimulated, producing a snapshot of the subjects brain. While there has been a
great deal of hype surrounding these technologies and their potential applications
for marketing, very few studies in peer reviewed journals have actually
been published, deploying them for the use of marketing. One of the earliest
studies conducted, utilizing these newer technologies was one performed by
Professor Ambler and his colleagues at the London Business School. This
study asked subjects who were placed in a MEG scanner, which of 3 brands
they would purchase when given a choice. The results indicated that familiar
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brands stimulate the right parietal cortex in the brain. The authors thus, theorized
that this area of the brain was a possible “location of brand equity.”
In 2000, Rossiter et al used SST to monitor brain waves while people watched
TV ads. They were able to predict what scenes people would recognize a week
later. They found they could predict this from activity in the left-brain at the
time of exposure in the posterior region of the frontal cortex. Prior to this, it
was thought that the crucial processing for pictures would be in the right
hemisphere of the brain. Since 2000, many other similar studies have been
conducted, which have resulted in relatively minor findings, most likely, due
to the subjective and highly interpretive nature of this type of research. While
each of these techniques has its strengths and weaknesses, there is also a great
deal of detailed interpretation which goes into understanding the meaning of
increased brain activation and in specifying what mental process is signified
by an activation.
Most imaging studies report activations arising from the difference between
two tasks. For each brain area, the signal during the task is compared to the
signal at rest; those areas of the brain with stronger signals during the task are
presumed to be processing the information. A very recent breakthrough however,
may be able to detect the activity of an individual neuron in the future.
At this stage however, the smallest brain area that can be represented - a
voxel, is the size of a grain of rice and contains tens of thousands of neurons. It
is interesting to note that there are about 100 billion neurons in the typical
brain, but current fMRI resolution is only about 150,000 voxels. The changes in
blood flow in a voxel thus, indicate increased activity of not a single neuron
but a huge pod of tens of thousands of neurons.
4 Practical Applications: A Dubious Aim
In addition to some of the earlier Neuromarketing studies and applications
already described herein, there are several other case studies that are of interest.
These studies offer us a glimpse into exactly what these new technologies
are being adapted for and how they are being applied, which is more often
than not, for the sole purpose of marketing products to consumers. One such
example is a study employed by Daimler Chrysler utilizing fMRI technology
to see how consumers perceive their cars. These scans concluded that many
sports cars activated the ventromedial prefrontal cortex, or what is called the
“reward” centre of the brain, which is also reportedly activated by alcohol,
drugs and sex. When shown a frontal view of these cars, the area of the brain
that processes human faces was also shown to “light up.” Boston based Ad
agency Arnold Worldwide, hired by Jack Daniels employed similar brain
imaging studies recently carried out at Harvard’s McLean Hospital. These
studies use fMRI scans to measure subjects’ emotional responses to images
associated with the activity of drinking in 25-34 year olds. The scans "help
give us empirical evidence of the emotion of decision-making," says Baysie
Wightman, head of Arnold's new science-focused Human Nature Department.
These results apparently helped shape Jack Daniel’s 2007 ad campaigns
geared towards this particular demographic.
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According to an article in the Journal of Advertising Research in 2001, another
Australian study of TV commercials using brain wave technology (Steadystate
Probe Topography) indicated that the left-brain was crucially involved in
long-term memory for pictures. This was contrary to expectation, as it was
previously thought that crucial processing of pictures was located in the right
brain. Using the newer brain scanning technologies, the first studies of brands
started to appear in 2002. One study performed in 2002 at the Psychology
Department at the University of Los Angeles looked at exactly where brand
names are processed in the brain and found more activity in the right brain
than the left. Another study performed that same year at the London Business
School examined people making a choice between brands and brand familiarity.
Indicators showed up mostly in the right brain, in a place called the parietal
cortex. Researchers apparently have their fingers crossed that this will turn
out to be where brand equity resides, which no doubt will fuel a slew of additional
studies in this specific area.
While much of the research is still mostly academic, many experts anticipate
that that it's just a matter of time before these findings become a routine part
of every competitive corporation’s marketing plans. Some findings, such as
the aforementioned discovery, which focuses on how the brain interprets
brand names, are already enticing advertisers. Take, for example, the classic
taste test. P. Read Montague of Baylor College of Medicine, who performed
his version of the Pepsi Challenge with the use of an fMRI machine in 2004. In
this study researchers repeated the famous Pepsi/Coca-Cola blind taste test
challenge while scanning the brains of volunteers. When ignorant of which
beverage they were sampling, the subjects favored Pepsi with their scans revealing
activation of the ventromedial prefrontal cortex (a reward centre).
However, when Montague repeated the test and told them what they were
drinking, three out of four people said they preferred Coke. When aware of
which brand they tasted, the scans revealed activity in the hippocampus,
midbrain and dorsolateral prefrontal cortex – areas associated with memory,
emotions and emotional information processing. This led the researchers to
conclude that a preference for Coke is more influenced by the brand image
than by the taste itself. Montague states that, "This showed that the brand
alone has value in the brain above and beyond the desire for the content of the
can.”
Various studies have used verbal reports (e.g. scene recognition, brand preference);
behavior (e.g. purchase vs. non-purchase); and even different segment
reactions (e.g. Democrats vs. Republican brains are said to react differently to
advertisements) to evaluate video clips and TV advertisements, study decision
making among shoppers and even to investigate the likely impact of political
advertising during the recent presidential elections. A study at the University
of California, Los Angeles, for example reported differences in the
neural responses of Democrats and Republicans to commercials depicting the
9/11 terrorist attacks. For the most part however, studies have been focused
thus far, on the so-called ‘known centers’ such as: the rewards center, selfreferencing
center; and face recognition center. This has resulted in numerous
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neuromarketing studies, which increasingly focus on the various ‘known centers’
in the brain, however the actual scientific data about these ‘known centres’
is very limited. A number of findings converge on the prefrontal cortex
located in the lower forehead but no-one is clear yet as to precisely what all
this means, thus, this should be considered more speculative at this point than
anything else.
While the implications for marketing are problematic and mostly in the realm
of speculation for the moment - we can, no doubt, expect a continuing accumulation
of these studies in the near future. In any new scientific field, there is
often a period where there is more speculation than proven research. This,
coupled with the increasingly commercial nature of science, has resulted in a
proliferation of pseudo experts in marketing, whose exaggerated claims and
“powerful new marketing services,” may do injustice to the real scientific
research being conducted within this new discipline.
5 Critiques & Potential Ethical Concerns
Within the realm of Neuroeconomics and Neuromarketing there are a number
of causes for concern. These are not only ethical, but also practical in nature.
Concerning the applications of neurotechnology, there are a host of implications
for individuals and society which should be considered carefully before
these are put into wide spread use. Other potential implications may be considered
more philosophical in nature, concerning the way we think about
ourselves as persons, moral agents and even spiritual beings. In fact, there has
already been a campaign organized against one such research project at
Emory University. A national watchdog group headed by Ralph Nader called
Commercial Alert has objected to Emory allowing Brighthouse, an Atlanta
marketing consultancy, to use the university’s neuroscience facilities for neuromarketing
research. Commercial Alert has asked the Office for Human Research
Protections, a division of the U.S. Department of Health and Human
Services, to investigate whether the project violates federal guidelines for
medical research.
Commercial Alert contends that it is wrong to use medical research for marketing
instead of for the improvement and well being of humankind. The
University has reviewed and approved the research, and states that the studies
are making important contributions to Science, which will soon be published
in scientific journals. However, it has been recently revealed that the
university now no longer conducts this neuromarketing research on campus.
Instead, Joey Reiman, who is an adjunct professor at Emory’s business school
and the proprietor of Brighthouse marketing consultancy, says that the university
studies how the brain reacts to preferences, and then passes this information
over to his consulting company, which is then hired by corporate
clients. This raises many ethical questions about how this research is being
used and such conflicts of interest are clearly a cause for concern. This type of
research in the name of scientific knowledge is common, however selling this
information to corporations whose job it is to manipulate people for profit is a
dubious enterprise at best.
256 Belden - Journal of Mind Theory Vol. 0 No. 2
Despite how this information is or is not used, a much more philosophical
question might be, how such invasive neuroimaging techniques are breaching
the privacy of the human mind. This technological progress is making it possible
to monitor and manipulate the human mind with increasing precision
and with these techniques it may be possible to not only infringe upon the
privacy of the human mind, but to judge people based not only by their actions,
but also by their thoughts and predilections.
Brief Description of Technologies
Positron Emission Tomography or PET scans, were developed in the mid- 1970s, PET was the
first scanning method to give functional information about the brain. Both PET and FMRI provide
information about neural activity in different brain regions as indicated by the level of cerebral
blood flow. With FMRI, the magnetic consequences of blood oxygenation are measured, whereas
PET measures blood flow by first injecting people with a liquid radioactive tracer and measuring
changes in radiation.
FMRI or Functional Magnetic Resonance Imaging and MRI or Magnetic Resonance Imaging
require no radioactive materials and produce images at a higher resolution than PET. Originally
used to take snapshots of what various brain injuries looked like, researchers realized that they
could also use MRI machines to see which parts of the brain were being utilized in specific tasks,
such as perception, language and memory – hence the term !functional" MRI. This method involves
very rapid scanning of the brain to see which areas of the brain are activated. When neural
activity increases and the blood oxygenation in a region increases, this changes its magnetic
properties. Increased neural action draws a bigger blood supply to support its work, which shows
up—millisecond by millisecond —on an fMRI scan as magnetic changes. So, what fMRI detects is
not neural activity directly, but magnetic changes that are blood-oxygen level dependent. The
method is non invasive so multiple scans can be done on the same subject.
Magneto encephalography, or MEG is a very different brain scanning technique but used for
similar purposes. The big advantage of MEG scans is that they are able to measure activity in the
brain extremely quickly - every 1/1000 of a second, which is similar to the rate at which the brain
works - essentially 'the speed of thought'. This method is closely related to electroencephalography
or EEG, since they both try to measure the same neuronal currents. Electrical currents in the
brain's neuronal circuitry give rise to very weak magnetic fields that can be picked up by superconducting
detectors arranged around the outside of the head. The main disadvantages of MEG
are that it is more expensive and not as good as fMRI at localizing, where, precisely in the brain,
activity is taking place.
ERP – Event Related Potentials, also called Evoked Response Potentials
uses electrodes on the scalp to measure voltage fluctuations resulting from electrical activity in the
brain. The "baseline" activity is then averaged out, leaving just the electrical responses evoked by
each stimulus presentation. The location of where the activity is generated inside the brain has to
be imputed mathematically. In animal studies and patients undergoing brain surgery, another way
to localize ERP sources is to place electrodes directly on the brain.
SSPT or Steady State Probe Topography is used for monitoring activity during dynamic stimulus
sequences, such as TV commercials. SSPT measures steady-state visually evoked potentials
(SSVEP) and records at the rate of 13 times per second from 64 electrodes in a lightweight skullcap.
Belden - Journal of Mind Theory Vol. 0 No. 2 257
While important strides are being made in understanding the relation between
the mind and the brain, our understanding of why people behave the
way they do is closely bound up with the content of our laws, morals, social
mores and religious beliefs. This is thus, a topic, which holds great philosophical
weight for mankind and society as a whole.
We may also want to consider the physical invasiveness of some of these
techniques, such as the PET scan, which utilizes radioactive tracers to detect
brain activity in subjects, or even more invasive procedures carried out on
patients in brain surgery, where electrodes are placed directly on the brain.
We might also want to ask questions about the way in which many of these
studies are conducted. Often subjects are lead to believe they are being tested
for specific information, when in fact the tests being administered are employed
for the purpose of obtaining other personal information surreptitiously,
in studies designed for a completely different purpose. Perhaps it is
not in an individual’s best interest to have such personal information available
to others, especially when considering that it will most likely be utilized by
corporations and marketing firms who wish to use it to sell more of their
products and make higher profits.
Another practical problem here is that the media, the public, the corporations
and marketing firms interested in this new technology seem to think that it is
completely full proof. For example, the general conception seems to be that
brain scans “do not lie.” This has created a great deal of misinformation and
media reporting, which has outstripped any current scientific substance. This
promotional hype has in turn, led some scientists, researchers and even universities
to jump on the bandwagon in order to take advantage of the corporate
dollars being spent by these dubious enterprises. Bearing these questions
in mind, perhaps it is time we weigh the potential effects and possible ramifications
of such research and how this may be used going forward in society at
large. Will the research generated by this new discipline further our quest to
better understand the mind and brain and add to the betterment of society as
a whole? Or will it simply be usurped and corrupted by the all-powerful corporations
who are already dictating so much of what is being funded in science
now? Is it wise to allow precious funding dollars and University facilities
to be used for the purpose of bolstering already ubiquitous and rampant consumerism?
Wouldn’t this funding be better used for the health and betterment
of society rather than for capitalistic purposes? And will there be proper regulation
for this type of research imposed, as in the case with biotechnology or
stem cell research? These are the hard questions we must ask, not only for the
preservation of the scientific community, but also for society at large.
References
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Science is Culture:
Neuroeconomics and Neuromarketing.
Practical Applications and Ethical
Concerns
By Sarah Rebecca Anne Belden
1 Introduction
Neuroeconomics is a relatively new transdisciplinary field, which developed
out of Neuroscience. This burgeoning discipline analyses our brain activity
when we calculate risks and evaluate rewards, and utilizes brain-scanning
technology to study how people make decisions, evaluate personal choices
and even decide which products to buy. Since the late 1990’s a group of interdisciplinary
scholars have begun to combine social and natural scientific approaches
in this emerging discipline, combining both theoretical and empirical
tools from neuroscience, psychology and economics into a single approach.
The resulting synthesis has provided insights valuable to all three
parent-disciplines, which recently conducted studies, seem to support. Often
utilizing a variety of neuroimaging techniques and interventions such as
fMRI, PET, MEG and EEG, ERP and SSPT, scientific researchers in this new
field have sought to better understand the decision-making processes of individuals
in order to build more precise economic behavioral models. These
combined theories have already begun to restructure our neurobiological understanding
of the decision-making process, and concurrently a number of
recent neurobiological findings have provided great insight into some of the
already existing theories in the psychological and economic branches of this
discipline.
Since the 1990’s however, a newer and more radical branch of Neuroeconomics
has been born called Neuromarketing, which is aimed at revealing consumer
preferences using these same brain-imaging techniques. Rather than
simply trying to use science to better understand the decision-making processes
of individuals, these neuromarketing studies test subjects’ reactions to
certain stimuli, which are then recorded with the aim of revealing consumer
preferences. The results of these experiments are aimed at building targeted
250 Belden - Journal of Mind Theory Vol. 0 No. 2
advertising campaigns, designing new consumer products and shopping environments
and even determining the reasoning behind subjects’ preferences
to certain brands such as Coke or Pepsi.
While this may be good news for Madison Avenue and the billion dollar advertising
and marketing industries, as well as those corporations who employ
these companies to help sell their products, the very idea of using brain scans
to determine our private and personal predilections for the purpose of selling
us more products seems rather invasive, if not Orwellian to say the least. Not
only are there ethical concerns surrounding this new area of study, regarding
the practical applications and their likely implications for individuals and
society, but even more alarming, is the gusto with which the press, marketing
firms, and Big Business have embraced the idea of “peering inside peoples
heads” in order to better pin point their needs, desires and preferences as consumers.
The idea of a “hard science,” which can be utilized to uncover the
holy grail of marketing or a magic “buy button” in our brain, is just too good
for these industries to pass up, not to mention the scientists who have much to
gain from peddling, what some call, pseudoscience for profit. At this stage
neuromarketing is far from a “hard science” and the public should maintain a
healthy dose of skepticism with regard to the practical applications of these
neuroimaging techniques, which require many layers of signal processing,
statistical analysis and a complex set of assumptions in order to interpret the
psychological significance of these brain scans. But the public should also be
aware of the ethical implications of this new type of neuroscience: how it is
utilized; what its applications are; whether or not these new techniques are
invasive and what the possible implications for society may be.
Hailed by some leading market researchers as the most important advance in
their industry for a century, Neuromarketing has already been dismissed by
skeptical neuroscientists as verging on a pseudo-scientific scam. A recent editorial
in Nature Neuroscience, for example, suggested that many cognitive scientists
who had watched colleagues in molecular science grow rich were now
‘jumping on the commercial bandwagon,’ adding that, “According to this
view, neuromarketing is little more than a new fad, exploited by scientists and
marketing consultants to blind corporate clients with science.” Despite this,
interest in Neuromarketing is growing rapidly. In 1998 less than 20 papers a
year were published that examined the brain and decision-making, however,
by 2008 nearly 200 articles relating to this particular area of study had been
published. As reported in Advances in Clinical Neuroscience and Rehabilitation
magazine there has been a marked increase in the number of articles in scientific
journals and congresses organized around this new topic; entire issues
have been devoted to neuromarketing in advertising and marketing trade
publications; and it has even been reported that several new fMRI facilities,
intended for Neuromarketing rather than medical purposes were opened in
2005 alone, in the United States. This is evidence enough to sound the alarm,
however, while the public seems well aware of the ethical issues surrounding
new scientific advances in molecular genetics, there has been little public
awareness with regard to the ethical implications of neuroscience and neuromarketing.
Belden - Journal of Mind Theory Vol. 0 No. 2 251
2 Short History of Neuroeconomics
The first paper to explicitly combine neuroscientific data and a rigorous
mathematical theory from the social sciences was Peter Shizgal and Kent
Conover’s 1996 review in Current Directions in Psychological Science: “On the
neural computation of Utility.” This paper sought to describe the neurobiological
substrate for choice in rats using a normative economic theory. In
1999 this was followed by Michael Platt and Paul Glimcher’s publication of
“Neural correlates of decision variables in parietal cortex” which described a
formal economic-mathematical approach for the physiological study of the
sensory-motor process, or decision-making. This paper demonstrated that the
activity of individual neurons in the posterior parietal cortex encoded both the
probability and magnitude of reward, as would be predicted by most economic
theories if these neurons participated in decision-making. This was
rapidly followed by a multitude of papers uniting both economic and psychological
theories with measurements in human and animal brains.
The first of these neuroeconomic studies in humans were a pair of papers
published in 2001, which reflected collaboration between the fMRI pioneers
Hans Breiter, Shizgal, and the Princeton psychologist/economist Daniel Kahneman
(who would win the Nobel prize for his contribution to behavioral
economics the following year). That paper employed the psychological Prospect
theory of choice developed by Kahneman. The second of these papers
reflected collaboration between the economists Kevin McCabe, his colleague
Vernon Smith and a team that included economists, a psychologist and a biomedical
engineer (McCabe et al., 2001). This study represented the first use of
game theory in a human neurobiological experiment. In that paper, subjects
played a trust game either against anonymous human opponents or against a
computer. The neurobiological data revealed that in some subjects the medial
prefrontal cortex is more active when subjects play a cooperative strategy than
when they show a lack of trust in their game theoretic opponent.
Since the publication of these studies, perhaps the most critical insight has
been evidence that the decision-making systems of the brain can be viewed as
a two-part system. The first of these two parts are made up of the frontal cortex
and the basal ganglia, the areas that learn and compute the values of available
actions. The outputs of these structures are subsequently passed to the
second part of the system; the fronto-parietal circuits, which then decide between
the options and pass this information along to the motor system for
execution. These are the areas that ultimately contribute to our decision making
process.
With this plethora of research, Neuroeconomics has seen a steady growth.
Today, a number of Centers for the study of Neuroeconomics have emerged at
Universities throughout the world. In addition to these research centers, The
Society for Neuroeconomics established itself as the main center for this
emerging discipline in 2005. In 2009 the Society published, in collaboration
252 Belden - Journal of Mind Theory Vol. 0 No. 2
with Academic Press, “Neuroeconomics: Decision-Making and the Brain,”
which now serves both as a textbook for many graduate courses in Neuroeconomics,
as well as a Handbook of Neuroeconomics for researchers in the
field.
3 Short History of Neuromarketing
Neuroeconomics is a purely academic discipline concerned with the basic
mechanisms of decision-making. In contrast, Neuromarketing is a more applied
field concerned with the application of brain scanning technology to the
traditional goals and questions of interest of the marketing industry. While
the notion of Neuromarketing has been around for some 30 odd years, Professor
Ale Smidts from Erasmus University is said to have first coined the term
in 2002, and the first marketer to use fMRI was Gerry Zaltman at Harvard
University beginning in 1999. The first marketing conference, which focused
on the burgeoning field of Neuromarketing in 2004, was held at Baylor College
of Medicine in Houston. While the most utilized and well recognized
brain-imaging techniques are fMRI (functional magnetic resonance imaging),
QEEG (Quantitative electroencephalography) and MEG (magneto encephalography),
earlier forms of these techniques were being utilized as early as the
late 1960’s.
Before the development of these more sophisticated technologies researchers
used pupilometers – devices that measure spontaneous pupil dilation as indicators
of peoples’ interest while they were looking at advertising or print advertisements.
During this time, researchers also employed the use of GSR
(Galvanic Skin Response) as a possible indicator of people’s emotional response
to advertisements. Later, new technology for eye tracking was developed
which revealed exactly where on the page (or TV screen) people’s eyes
were focused. And finally, in the 1970’s Herbert Krugman and Flemming
Hansen began to explore processes that occur in the right/left brain hemispheres
using electroencephalograph (EEG) brain wave technology. Each of
these technologies was heralded at the time as groundbreaking, however none
of these found widespread use for the purpose of marketing.
In 1981 SST (Steady State Topography) was utilized by Professor Richard Silberstein
at Swinburne University, where he used this technology in clinical
applications for possible use in marketing. The latest, and perhaps most
widely known technologies are fMRI (functional magnetic resonance) and
MEG (magneto-encephalography) which are both utilized as brain scanning
devices. Both technologies show which areas of the brain “light up” when
stimulated, producing a snapshot of the subjects brain. While there has been a
great deal of hype surrounding these technologies and their potential applications
for marketing, very few studies in peer reviewed journals have actually
been published, deploying them for the use of marketing. One of the earliest
studies conducted, utilizing these newer technologies was one performed by
Professor Ambler and his colleagues at the London Business School. This
study asked subjects who were placed in a MEG scanner, which of 3 brands
they would purchase when given a choice. The results indicated that familiar
Belden - Journal of Mind Theory Vol. 0 No. 2 253
brands stimulate the right parietal cortex in the brain. The authors thus, theorized
that this area of the brain was a possible “location of brand equity.”
In 2000, Rossiter et al used SST to monitor brain waves while people watched
TV ads. They were able to predict what scenes people would recognize a week
later. They found they could predict this from activity in the left-brain at the
time of exposure in the posterior region of the frontal cortex. Prior to this, it
was thought that the crucial processing for pictures would be in the right
hemisphere of the brain. Since 2000, many other similar studies have been
conducted, which have resulted in relatively minor findings, most likely, due
to the subjective and highly interpretive nature of this type of research. While
each of these techniques has its strengths and weaknesses, there is also a great
deal of detailed interpretation which goes into understanding the meaning of
increased brain activation and in specifying what mental process is signified
by an activation.
Most imaging studies report activations arising from the difference between
two tasks. For each brain area, the signal during the task is compared to the
signal at rest; those areas of the brain with stronger signals during the task are
presumed to be processing the information. A very recent breakthrough however,
may be able to detect the activity of an individual neuron in the future.
At this stage however, the smallest brain area that can be represented - a
voxel, is the size of a grain of rice and contains tens of thousands of neurons. It
is interesting to note that there are about 100 billion neurons in the typical
brain, but current fMRI resolution is only about 150,000 voxels. The changes in
blood flow in a voxel thus, indicate increased activity of not a single neuron
but a huge pod of tens of thousands of neurons.
4 Practical Applications: A Dubious Aim
In addition to some of the earlier Neuromarketing studies and applications
already described herein, there are several other case studies that are of interest.
These studies offer us a glimpse into exactly what these new technologies
are being adapted for and how they are being applied, which is more often
than not, for the sole purpose of marketing products to consumers. One such
example is a study employed by Daimler Chrysler utilizing fMRI technology
to see how consumers perceive their cars. These scans concluded that many
sports cars activated the ventromedial prefrontal cortex, or what is called the
“reward” centre of the brain, which is also reportedly activated by alcohol,
drugs and sex. When shown a frontal view of these cars, the area of the brain
that processes human faces was also shown to “light up.” Boston based Ad
agency Arnold Worldwide, hired by Jack Daniels employed similar brain
imaging studies recently carried out at Harvard’s McLean Hospital. These
studies use fMRI scans to measure subjects’ emotional responses to images
associated with the activity of drinking in 25-34 year olds. The scans "help
give us empirical evidence of the emotion of decision-making," says Baysie
Wightman, head of Arnold's new science-focused Human Nature Department.
These results apparently helped shape Jack Daniel’s 2007 ad campaigns
geared towards this particular demographic.
254 Belden - Journal of Mind Theory Vol. 0 No. 2
According to an article in the Journal of Advertising Research in 2001, another
Australian study of TV commercials using brain wave technology (Steadystate
Probe Topography) indicated that the left-brain was crucially involved in
long-term memory for pictures. This was contrary to expectation, as it was
previously thought that crucial processing of pictures was located in the right
brain. Using the newer brain scanning technologies, the first studies of brands
started to appear in 2002. One study performed in 2002 at the Psychology
Department at the University of Los Angeles looked at exactly where brand
names are processed in the brain and found more activity in the right brain
than the left. Another study performed that same year at the London Business
School examined people making a choice between brands and brand familiarity.
Indicators showed up mostly in the right brain, in a place called the parietal
cortex. Researchers apparently have their fingers crossed that this will turn
out to be where brand equity resides, which no doubt will fuel a slew of additional
studies in this specific area.
While much of the research is still mostly academic, many experts anticipate
that that it's just a matter of time before these findings become a routine part
of every competitive corporation’s marketing plans. Some findings, such as
the aforementioned discovery, which focuses on how the brain interprets
brand names, are already enticing advertisers. Take, for example, the classic
taste test. P. Read Montague of Baylor College of Medicine, who performed
his version of the Pepsi Challenge with the use of an fMRI machine in 2004. In
this study researchers repeated the famous Pepsi/Coca-Cola blind taste test
challenge while scanning the brains of volunteers. When ignorant of which
beverage they were sampling, the subjects favored Pepsi with their scans revealing
activation of the ventromedial prefrontal cortex (a reward centre).
However, when Montague repeated the test and told them what they were
drinking, three out of four people said they preferred Coke. When aware of
which brand they tasted, the scans revealed activity in the hippocampus,
midbrain and dorsolateral prefrontal cortex – areas associated with memory,
emotions and emotional information processing. This led the researchers to
conclude that a preference for Coke is more influenced by the brand image
than by the taste itself. Montague states that, "This showed that the brand
alone has value in the brain above and beyond the desire for the content of the
can.”
Various studies have used verbal reports (e.g. scene recognition, brand preference);
behavior (e.g. purchase vs. non-purchase); and even different segment
reactions (e.g. Democrats vs. Republican brains are said to react differently to
advertisements) to evaluate video clips and TV advertisements, study decision
making among shoppers and even to investigate the likely impact of political
advertising during the recent presidential elections. A study at the University
of California, Los Angeles, for example reported differences in the
neural responses of Democrats and Republicans to commercials depicting the
9/11 terrorist attacks. For the most part however, studies have been focused
thus far, on the so-called ‘known centers’ such as: the rewards center, selfreferencing
center; and face recognition center. This has resulted in numerous
Belden - Journal of Mind Theory Vol. 0 No. 2 255
neuromarketing studies, which increasingly focus on the various ‘known centers’
in the brain, however the actual scientific data about these ‘known centres’
is very limited. A number of findings converge on the prefrontal cortex
located in the lower forehead but no-one is clear yet as to precisely what all
this means, thus, this should be considered more speculative at this point than
anything else.
While the implications for marketing are problematic and mostly in the realm
of speculation for the moment - we can, no doubt, expect a continuing accumulation
of these studies in the near future. In any new scientific field, there is
often a period where there is more speculation than proven research. This,
coupled with the increasingly commercial nature of science, has resulted in a
proliferation of pseudo experts in marketing, whose exaggerated claims and
“powerful new marketing services,” may do injustice to the real scientific
research being conducted within this new discipline.
5 Critiques & Potential Ethical Concerns
Within the realm of Neuroeconomics and Neuromarketing there are a number
of causes for concern. These are not only ethical, but also practical in nature.
Concerning the applications of neurotechnology, there are a host of implications
for individuals and society which should be considered carefully before
these are put into wide spread use. Other potential implications may be considered
more philosophical in nature, concerning the way we think about
ourselves as persons, moral agents and even spiritual beings. In fact, there has
already been a campaign organized against one such research project at
Emory University. A national watchdog group headed by Ralph Nader called
Commercial Alert has objected to Emory allowing Brighthouse, an Atlanta
marketing consultancy, to use the university’s neuroscience facilities for neuromarketing
research. Commercial Alert has asked the Office for Human Research
Protections, a division of the U.S. Department of Health and Human
Services, to investigate whether the project violates federal guidelines for
medical research.
Commercial Alert contends that it is wrong to use medical research for marketing
instead of for the improvement and well being of humankind. The
University has reviewed and approved the research, and states that the studies
are making important contributions to Science, which will soon be published
in scientific journals. However, it has been recently revealed that the
university now no longer conducts this neuromarketing research on campus.
Instead, Joey Reiman, who is an adjunct professor at Emory’s business school
and the proprietor of Brighthouse marketing consultancy, says that the university
studies how the brain reacts to preferences, and then passes this information
over to his consulting company, which is then hired by corporate
clients. This raises many ethical questions about how this research is being
used and such conflicts of interest are clearly a cause for concern. This type of
research in the name of scientific knowledge is common, however selling this
information to corporations whose job it is to manipulate people for profit is a
dubious enterprise at best.
256 Belden - Journal of Mind Theory Vol. 0 No. 2
Despite how this information is or is not used, a much more philosophical
question might be, how such invasive neuroimaging techniques are breaching
the privacy of the human mind. This technological progress is making it possible
to monitor and manipulate the human mind with increasing precision
and with these techniques it may be possible to not only infringe upon the
privacy of the human mind, but to judge people based not only by their actions,
but also by their thoughts and predilections.
Brief Description of Technologies
Positron Emission Tomography or PET scans, were developed in the mid- 1970s, PET was the
first scanning method to give functional information about the brain. Both PET and FMRI provide
information about neural activity in different brain regions as indicated by the level of cerebral
blood flow. With FMRI, the magnetic consequences of blood oxygenation are measured, whereas
PET measures blood flow by first injecting people with a liquid radioactive tracer and measuring
changes in radiation.
FMRI or Functional Magnetic Resonance Imaging and MRI or Magnetic Resonance Imaging
require no radioactive materials and produce images at a higher resolution than PET. Originally
used to take snapshots of what various brain injuries looked like, researchers realized that they
could also use MRI machines to see which parts of the brain were being utilized in specific tasks,
such as perception, language and memory – hence the term !functional" MRI. This method involves
very rapid scanning of the brain to see which areas of the brain are activated. When neural
activity increases and the blood oxygenation in a region increases, this changes its magnetic
properties. Increased neural action draws a bigger blood supply to support its work, which shows
up—millisecond by millisecond —on an fMRI scan as magnetic changes. So, what fMRI detects is
not neural activity directly, but magnetic changes that are blood-oxygen level dependent. The
method is non invasive so multiple scans can be done on the same subject.
Magneto encephalography, or MEG is a very different brain scanning technique but used for
similar purposes. The big advantage of MEG scans is that they are able to measure activity in the
brain extremely quickly - every 1/1000 of a second, which is similar to the rate at which the brain
works - essentially 'the speed of thought'. This method is closely related to electroencephalography
or EEG, since they both try to measure the same neuronal currents. Electrical currents in the
brain's neuronal circuitry give rise to very weak magnetic fields that can be picked up by superconducting
detectors arranged around the outside of the head. The main disadvantages of MEG
are that it is more expensive and not as good as fMRI at localizing, where, precisely in the brain,
activity is taking place.
ERP – Event Related Potentials, also called Evoked Response Potentials
uses electrodes on the scalp to measure voltage fluctuations resulting from electrical activity in the
brain. The "baseline" activity is then averaged out, leaving just the electrical responses evoked by
each stimulus presentation. The location of where the activity is generated inside the brain has to
be imputed mathematically. In animal studies and patients undergoing brain surgery, another way
to localize ERP sources is to place electrodes directly on the brain.
SSPT or Steady State Probe Topography is used for monitoring activity during dynamic stimulus
sequences, such as TV commercials. SSPT measures steady-state visually evoked potentials
(SSVEP) and records at the rate of 13 times per second from 64 electrodes in a lightweight skullcap.
Belden - Journal of Mind Theory Vol. 0 No. 2 257
While important strides are being made in understanding the relation between
the mind and the brain, our understanding of why people behave the
way they do is closely bound up with the content of our laws, morals, social
mores and religious beliefs. This is thus, a topic, which holds great philosophical
weight for mankind and society as a whole.
We may also want to consider the physical invasiveness of some of these
techniques, such as the PET scan, which utilizes radioactive tracers to detect
brain activity in subjects, or even more invasive procedures carried out on
patients in brain surgery, where electrodes are placed directly on the brain.
We might also want to ask questions about the way in which many of these
studies are conducted. Often subjects are lead to believe they are being tested
for specific information, when in fact the tests being administered are employed
for the purpose of obtaining other personal information surreptitiously,
in studies designed for a completely different purpose. Perhaps it is
not in an individual’s best interest to have such personal information available
to others, especially when considering that it will most likely be utilized by
corporations and marketing firms who wish to use it to sell more of their
products and make higher profits.
Another practical problem here is that the media, the public, the corporations
and marketing firms interested in this new technology seem to think that it is
completely full proof. For example, the general conception seems to be that
brain scans “do not lie.” This has created a great deal of misinformation and
media reporting, which has outstripped any current scientific substance. This
promotional hype has in turn, led some scientists, researchers and even universities
to jump on the bandwagon in order to take advantage of the corporate
dollars being spent by these dubious enterprises. Bearing these questions
in mind, perhaps it is time we weigh the potential effects and possible ramifications
of such research and how this may be used going forward in society at
large. Will the research generated by this new discipline further our quest to
better understand the mind and brain and add to the betterment of society as
a whole? Or will it simply be usurped and corrupted by the all-powerful corporations
who are already dictating so much of what is being funded in science
now? Is it wise to allow precious funding dollars and University facilities
to be used for the purpose of bolstering already ubiquitous and rampant consumerism?
Wouldn’t this funding be better used for the health and betterment
of society rather than for capitalistic purposes? And will there be proper regulation
for this type of research imposed, as in the case with biotechnology or
stem cell research? These are the hard questions we must ask, not only for the
preservation of the scientific community, but also for society at large.
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