On Brain with Terry Wu: Part 2

Neuromarketer, Terry Wu, is back to tutor all aspiring pupils of brands and brains in part 2 of Capsule's exclusive interview.

At times, the public sentiment towards neuromarketing has been one of distrust. Some claim neuromarketers are, in effect, aiding in creating “super-ads” that bypass all rational consumer thought in order to get them to press the “buy now” button. While this is clearly overstating the matter, it brings up an interesting concept of ethical practice within the field of neuromarketing. Do you have any thoughts or guidelines for how those in your field can behave ethically?

There is a lot of misinformation about Neuromarketing. Some self-proclaimed Neuromarketers have little knowledge about the brain, but are out there making unsupported claims. Some even rebrand their century-old sales techniques as Neuromarketing. It is no surprise that those unrealistic claims have raised alarms in the minds of the general public.

In reality, Neuromarketing, or marketing in general, is about persuasion, not coercion. You can’t force people to buy what they don’t need or want. There is no such a thing as a “Buy Button” in the brain as some unethical neuromarketers claim. It doesn’t take much to demonstrate this. You can have the best PC salesman in the world try to convince Mac users to switch to PC. Will those Mac users suddenly switch to PC? It isn’t going to happen.

Neuromarketing is a new scientific discipline that combines Neuroscience, Social Psychology and Behavioral Economics. It aims at understanding how consumers make their buying decisions and what impacts their decision-making. It is transforming marketing from an art to a science.

Based on Neuromarketing research, it is clear that consumers' emotions and experience play a big role in buying decisions. If a business focuses on creating emotional values and better experiences, its products and services will provide not only what consumers need, but also what they want. Filling both the needs and the wants is what makes marketing successful and effective. This is the essence of Neuromarketing.

For example, many wine drinkers swear that their expensive Riedel wine glasses make the wine taste better. But, in double-blind taste testing, it has been shown that Riedel wine glasses are indistinguishable from cheap generic wine glasses. Is Riedel fooling its customers? Absolutely not. Riedel creates a belief that the right wine glass will give you a more enjoyable wine-drinking experience. If you buy into that belief, your brain will create that better experience for you and that better experience is manifested as better-tasting wine.

There are no magical formulas that can coerce anyone to buy anything. Neuromarketing is just marketing that is guided by research on how people make decisions. The bottom line is that ethical companies use Neuromarketing ethically. Unethical companies use all marketing techniques unethically. Neuromarketing is a holistic way to look at marketing than a series of mental tricks.

Used effectively, it is not even noticed by the customer. We never criticize Amazon for applying Neuromarketing techniques very effectively. What Amazon gives us is a good, easy-to-buy experience. It simply accomplishes the goals of informing, showing, explaining, and presenting products more effectively.

Online engagement and impressions can be tricky to measure. With click farms, bots and user error skewing marketing data, brands, now more than ever, have sought the holy grail of user metrics, emotional resonance. Can neuromarketing tap into the emotional reactions consumers have towards brands and their advertising? Is neuromarketing offering any new innovations or practices in this area of consumer measurement?

So far, no techniques can reliably measure consumers’ emotional or intuitive reactions to brands or marketing messages. Many Neuroscience techniques have been hyped as the window to the soul or our thoughts. But in reality, they offer only some crude guesses and estimates at best.

Even the most expensive, most advanced fMRI scanners can’t tell someone having a positive reaction to a branding message from someone wishing the noisy brain scan would end soon. The fMRI scanner is extremely loud and uncomfortable.

None of the available tools can directly measure the neural activity inside the living brain. fMRI measures the change of blood oxygen levels inside the brain. The blood oxygen level change must reach a certain threshold to be detectable. Does increased neural activity always require more oxygen? Absolutely not. The changing blood oxygen level is not an accurate indicator of neural activity, especially fast, transient neural activity. For prolonged increased neural activity in large brain areas, fMRI can reliably detect those changes.

The spatial and temporal resolutions are very poor. Fast thoughts happen in milliseconds, but fMRI scans can only measure changes in the scale of seconds. The collected signals can be difficult to interpret. Experiments must be designed to minimize the impact of these limitations.

If you want to study volcanic activities, would you look at the volcano directly or would you look at the huge cloud of ashes and gases that result from an eruption? Examining the brain using fMRI is like looking at the plume of volcanic cloud. It tells you something about the volcano, but definitely not the whole story.

Neuromarketing can guide us as to what we need to measure to better understand consumers’ responses. Many companies are developing tools to make measurements more accurate. However, all available tools on the market have limitations and can provide some insights, but not the whole picture. Interpreting such measurement results requires critical thinking.

Do you have any recommended reading for those interested in neuromarketing or how the brain makes decisions?

For reading that helps understand the brain and our behavior, I recommend “Behave: The Biology of Humans at Our Best and Worst” by Robert Sapolsky.

For reading on how we think and why we have so many cognitive biases, I recommend “Thinking, Fast and Slow” by Daniel Kahneman. This book summarizes Kahneman’s Nobel Prize winning research.

For reading on consumers’ irrational behavior, I recommend “Misbehaving: The Making of Behavioral Economics” by Richard Thaler. This book and his earlier book “Nudge: Improving Decisions About Health, Wealth, and Happiness” summarize his Nobel Prize winning research.

For reading on Social Psychology, I recommend “Influence: The Psychology of Persuasion” by Robert Cialdini. This book helps us understand why Neuromarketing techniques work.

Our greatest thanks to Terry Wu for taking the time to provide some enlightenment on a few mysteries of the human mind. If you haven't already done so, check out Part 1 of our interview with Terry. And if that still isn't enough knowledge to pacify your voracious gray matter, be on the lookout for Terry Wu's upcoming Tedx Talk.