Brain Science is Changing Marketing

“The brain is nothing more than a prediction machine, it’s always trying to figure out what will happen next. We don’t live in the present, we live in the future.”

It all starts with ROI – we all die for ROI. Some years ago, it was all about branding and impressions. The world has changed quite a bit with Internet and clicks, and tweets, and shares. Having a big event is no longer needed, now we need to prove how effective that is – in dollars, in actual revenue. I know, crazy!

Enter Neuromarketing.

Neuromarketing is not marketing to the brain, that is marketing. Marketing tries to influence the brain, neuromarketing is about measurement, measuring how efficient marketing is in both, conscious and unconscious impulses.

Many people believe Neuromarketing is about subliminal control. There are several bad things about marketing, not every marketer’s heart is pure (mine is though), nevertheless I believe that as humans and consumers, we are better off understanding how marketing affects the brain. There is an amazing neuromarketing BBC documentary: BBC Documentary – Horizon, out of Control?

Neouromarketing gets into the nature of how we learn and how we process. One of the best examples is the Stroop effect. If you are like the rest of us, you might have difficulty while doing the famous test. This is a proof that your unconscious mind works.

Neuromarketing is mainly trying to modernize the concept that Marketing had about consumers and their high level of consciousness when a consumer wants to make decisions.

The theory of the rational consumer assumes that any impulse from a Marketing source, will, if effective, impact the decision making process of the consumer. Back in the 1930’s when advertising was starting, the “magic bullet” theory was elaborated. The two theories, magic bullet and rational consumer would imply that:

Consumers think in terms of information

A consumer respond to marketing that presents rational, logical arguments about brands and products

The only way marketing and advertising can influence a consumer is because the consumer remembers, rationally, the brand

How consumers really are

  1. We do a lot of habitual and spontaneous buying, we don’t do a lot of deep information analysis
  2. We don’t do cost-benefit analysis – the more decisions the more confused
  3. We decide on unconscious decision
  4. We depend on a lot of habit
  5. We actively and passively avoid advertising – Consumers don’t like being persuaded
  6. We have faulty memories – we think we remember like a camera, but that is not really our mind
  7. We have weak preferences
  8. We are widely over-confident about our self knowledge – we all believe we are special

Why neuromarketing is becoming a business

All self-reporting methods assume that people have conscious accessibility to their mental states

Modern brain science provide evidence that:

  1. We don’t know why we do things
  2. Our attitudes, preferences and opinions are much less stable than we believe

The cognitive timeline (simplified)

Warning – not for cognitive scientists, just for marketers

Input

Form impression – A lot of sensory information comes to our brain

This is a nonconsious way to gather data. All this stimuli we turn into perceptions that we can understand

Determine meaning and value – we try to make sense of the information

In an automatic way, we decide what is the value. Is this good? Is this bad? Will this improve my life, kill me?

The Central Nervous System takes over and decides what these inputs are. These are our very primitive responses

Deliberate and analyze – We decide what to do

Only after the unconscious mind takes the input and react, our rational mind needs to decide what to do. This includes activities such as memorizing and remembering, calculating, and planning.

Speak and act – we move

From ordering our muscles to move, all the way to talk, to decide to flee.

How to trigger these different processes?

There are several connections in the brain that can trigger diverse actions in the brain. Oone of the most known has to do with ‘aroma marketing’

The unconscious stages is really fast .3 milliseconds. But what about larger purchases? Does this take the same amount of time?Most likely, nevertheless it’s hard to say, in the real world. All the different stages are overlapping, and our brain is constantly taking input. Our behavior changes based on these inputs.

Marketing and Neuromarketing are not a one time shot – that is where we need to look at advertising differently. For most things in the world, our minds try to generate connections, asking: how these things work together?

Advertising works because we have positive associations with the product.

Volume of purchase – large investment?

Professional reviews occur after the purchase, not before. We don’t completely disregard the reviews fist, but we have such an overwhelming choice for every type of price level, that even in the luxury space, you have substitutes – a Rolex, a car, a mansion.

Within wherever it is in an objective scale, if that is the level I’m buing, even with mortgages, the biggest factor is the personality of the mortgage broker. When there is 100 options, even with fees, 1/4 of difference, they lean into the personality. There is an irrational element on home buying – this gut feeling is important.

That is where the rationalization comes into place. There is a social context for it. After Purchase is not a reason, in most cases is a rationalization

Enter System 1 and System 2

There are 7 non-conscious mechanisms that influence what we choose and what we do. Daniel Kahneman’s, Thinking Fast and Slow, with the introduction of Behavioral Economics, introduce the notion of diverse processes happening within System 1 and System 2

System 1 is the unconscious while System 2 is the conscious.

System 1 is in charge, making sure you can walk straight and not fall down – System 2 is the “lazy controller” it only intervenes when it absolutely must.

System 1 only triggers System 2 when something unexpected happens – hence the importance of novelty (and perhaps why divorce happens after 3-5 years, where the “magic” fades. Also why divorce doesn’t happen after 10+ years, you become used to the input, moving your relationship into auto-drive.

Our brains are cognitive misers, we prefer shortcuts, we rely on hunches and we guess. But our two systems are not in a fight with each other, they complement, and System 2 can override System 1 – but this comes only from a conscious decision.

Novelty and familiarity detection – Novelty and familiarity form a continuum

Consumers seek novelty, but distrust it. It catches our eye but also implies uncertainty and uncertainty and ambiguity always increase aversion and avoidance in decision making.

Use novelty to attract attention to your product

Novelty for novelty sake will probably fail (Gap logo)

Use marketing to move reactions from confusing to interesting – make novel products comprehensive

Get from novel to familiar as fast as you can! That’s were the money is.

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