Neuromarketing makes its mark in SA

By Leigh Andrews

On Thursday, 5 November, I attended Marketing Science's Neuromarketing Conference, in Johannesburg. Neuromarketing, the latest buzzword around the globe since Martin Lindstrom's book, Buyology, is about using research to understand how the brain is affected by marketing stimuli. Lindstrom is a brand futurist who was rated by Time magazine in 2009 as one of the top 100 influential thinkers. He has had a huge influence in the adoption and development of neuromarketing. The Conference aimed to explain and explore this topic with South African marketers and advertisers for the first time ...

[Mike] Broom kicked off the Conference by stating that the cost of research is unacceptably high, and that he aims to bring proper panel research to the science of marketing – and online marketing in particular - in South Africa. The share of online market research in South Africa is currently less than 1% of total research-spend, while elsewhere, online research accounts for roughly 40%. Broom feels that any internet research not conducted using panels is bad research.

Greg Ward on the value of online panels in market research

... Greg Ward is a full member of the Market Research Society with 25 years experience in the industry. He explained that he aims to get more information of greater depth from consumers, in order to make better decisions. While psychographic research techniques are currently lab-based and expensive, Olsen's Mindmetic offers a mechanism to take the research process out of the lab and place it into ordinary homes, and is developing techniques for use with online panels. The research results offer insight into the world of marketing research. After all, Ward feels one needs to ask just how typical the data is if we take people too far out of context, like in a lab situation, to attain results. They are looking to build this technology into online panels as a solid foundation for the clever work done on top of this. Ward also emphasised that while there have been many interesting changes in the internet over the past decade ... online research is now 10 years old, the initial promises were that it would be faster, cheaper, result in more data, and have no interviewer bias. Ward feels that online research has democratised things, as a one-man research band can now conduct multi-national research. There is also a broader country base for multi-national studies, as 'Europe' used to just mean the big five countries, and now incorporates the entire EMEA (Europe, Middle East and Asia) region. Ward adds that more research is being conducted about South Africa online, and that it is possibly misrepresented. In terms of how well the internet met its promises, Ward stated that it is certainly faster, allowing for good quality data to be collated within half an hour ... He also feels that online marketers can obtain better results if they slow down. It is also cheaper, with online interviews a quarter of the price of telephonic interviews in the UK. He feels that there is more complex data now available, but that it remains behind-the-scenes. The respondent merely sees 'electronic paper' with most online surveys. There is no interviewer bias as there are now no interviewers, but field teams are still required to 'common-sense check' surveys. In the South African context, Ward feels there are many similarities yet also many striking differences for traditional research methods, such as the increasing amount of unlisted numbers and people living in gated communities, where they can't be reached as easily. He also points out that internet usage is different here, with the AMPS July 2008 to June 2009 figures showing that there are 7.5-million 'connected' South Africans. This points to the fact that one can research everywhere online. Ward added that there is potential for online surveys to be conducted over mobile phones, but this sphere still needs some work ...

The internet has undergone a transformation in the past decade, with the inclusion of colour; movement; user-generated content; involvement; and much more, which have resulted in a more exciting, customisable, engaging and dynamic environment. However, market research stays the same. Ward feels we can improve the quality of results by asking better questions, and by realising that people complete online surveys for reasons ranging from cash and altruism, to feeling that they can make a difference and that they are being heard. It is therefore the duty of online market researchers to ask 'good' questions to ensure that respondents are heard correctly.

He then showed examples of more user-friendly online survey styles, which include having the brand logos available on one side of the page, to be dragged over to fill the correct slots. This is effective as brand logos are by nature distinctive and recognisable – this makes the survey easier to complete. After completing one such survey, respondents were asked for their opinions, and the majority stated that it was 'much faster to complete' than the previous style, even though it took much longer in reality. Ward also suggested asking respondents what they would like to talk about and answer, as opposed to running through the same set of questions for each respondent. He stated that researchers need to be aware that choosing the middle option of loving and hating a brand does not necessarily imply they do not know the brand – simply that they have no strong feelings linked to it.

Traditional market surveys have always been structured like a book, with each section following on from the next. The web offers the opportunity for a set landing page with numerous links, so that respondents can click to the section that interests them. Ward stated that this means we now have the capacity to handle surveys in a radically different way, if we want to. If we get into neuromarketing and understand advertising and store visits, we want more engaging quantitative surveys, which are repetitive for future benchmarking. He added that trends are best seen if the same panel is used over time, rather than by comparing one panel group to another, as these differences will invariably be over-emphasised.

Ward ended by stating that online offers a new class of questionnaire, where each use is an instance of this class, and automation is attractive. We can now create surveys in under 2.5 minutes, and this technology is readily available today, providing the 'rock solid base' necessary for clever research. This means we can now get at the emotions of consumers, expanding the quality of dimension. Business is moving too fast to build and test each new model – we therefore need to ensure that online panels are ready and waiting.

Anina Maree on Nielsen's new Neurofocus

Anina Maree of New Business Development at Nielsen, who has a long history with market research in terms of running the AMPS and RAMS and working at Synovate, spoke of the wide range of Nielsen's research tools that are being brought into South Africa. She stated that this is a new area, focused on the advance of electronic measurement of research findings. Neurofocus will be the next generation of market research. Neurofocus has recently been bought by Nielsen, and brings an 'entirely new' level of insights into the mind of the consumer.

Maree stated that the field of neuromarketing is very new, and is much like the 'Wild West', in that we are not yet sure what to expect from it. Compared to traditional research, neuro-research removes ambiguity in measuring brain behaviour of consumers buying decisions, which are made subconsciously, in the emotional part of the brain, in a split-second. Marketers can now 'drive the buy', by understanding and determining how consumers will react to certain messages.

The core of Neurofocus lies in determining what makes your ad effective. The challenges of advertising include determining the specific component of the ad that people pay attention to; where in the ad they are emotionally engaged and why; and what message they are exposed to. With Neurofocus, the respondents are shown several selected ads, interspersed with normal viewing features. This data is then processed by psychometric teams from the results picked up from the electrodes, and then forms recommendations on how to improve the ads. It is still a very new method that needs testing and piloting, but Maree feels it will be very beneficial in terms of getting people together; hooking them up to electrodes; and benchmarking, as though with an extended focus group.

BJ Olsen explains how he can read people's minds over the internet

... Birger Jan Olsen, an entrepreneur and seasoned marketing expert, brings 27 years of business experience to mindmetic. He demonstrated the tools mindmetic has developed to 'read people's minds over the internet.' He explained that mindmetic develops 'mind-reading' technology and has its research facility in Denmark, which is now beta launching in South Africa ... while he is not a doctor or a scientist, he learned all he has to know through life. Olsen said he learned how different people responded to advertising all over the world, by promoting hearing aids for Oticon for nine years. He also developed the world's first ASP-based e-marketing software, and survived a car crash, which changed his life, and opened him up to the powers of meditation. He decided that there must be a commercial need to find out how the brain works, which was his reasoning for starting mindmetic. The mindmetic technology will be launched worldwide in 2010, and it will reveal the emotions behind consumers' purchase decisions and reactions to advertising. After all, emotions rule thoughts, and thoughts rule consumer behaviour. Mindmetic measures emotions, to increase the impact of advertising impact and to increase Return On Investment (ROI) of advertising campaigns.

According to the Wikipedia definition, neuroscience measures the psycho-physical response advertising messages. In terms of cognition and neuropsychology, Olsen gave an example of a store that offered consumers a choice of four different bins to select socks from - the socks were all identical, yet the majority selected socks from the last bin, making up reasons for why these were better, such as that they looked better and felt softer. Olsen added that the problem with introspection and thinking back to former decision we have made is our interpretation of the event and what we 'think we thought', which is not necessarily an accurate interpretation of the action. With another example of people being asked to choose which of two photographs they prefer, they were then shown the option they had not chosen, and asked why they had preferred that option - only 13% discovered they had been manipulated and shown the photograph they had not initially chosen. Olsen asks - can we therefore trust our senses? He pointed out that the amygdala in the brain is responsible for our early responses to the fight or flight response. When we isolate 'sight' in the brain, it becomes clear that colour; depth; motion; and form of a single object are all seen and assessed by different parts of the brain ...

Neuromarketing of today comes at high cost with low volume, but it is definitely moving into the low cost, high volume phase. The measurement of pre-conscious stimuli is therefore moving from hospitals into the more commercial space. Olsen emphasised the value of recruiting subjects from a well run research panel and the importance of base-lining respondents before testing so that they are in a calm frame of mind. The Mindmetic analysts don't have access to the identity of the panelists, and there is a high level of security involved ...

To demonstrate the feasibility of transferring high science medical technology to the home, Olsen selected a subject from the audience. He extracted a small gadget from his briefcase, and attached electrodes to the subject's fingers. He plugged this into the USB port on his laptop, and the audience could see the Galvanic Skin Response graph of the subject in real time. He illustrated how different simuli evokes different responses, and described the analysis and interpretation of the resulting graph could be done remotely from the subject. Convincing evidence that your mind can be measured over the internet!

One-on-one with Olsen

I had the opportunity to interview Olsen one-on-one during the Hermanuspieterfontein wine-tasting event that followed the conference. We loaded plates with tasty snacks and sat in the sunshine to soak up the Military Museum's culture. Olsen feels that South African advertising is of a high standard, and that you can't compare one country to another as each market is unique. He added that the local film industry is fantastic, as he met a few members of the industry in Cannes, and felt our show-reel definitely compared to those of others from around the world. South Africans' way of seeing things is 'brilliant' and we are very pragmatic people, but unfortunately our talent is being bought and lured elsewhere.

On the topic of neuromarketing, Olsen explained that the neuroscience industry is set at $200-million globally. This includes techniques such as eye-tracking.

In terms of the future, Olsen would love to see the inclusion of devices that react to emotions, so that these tools can be used to enhance our understanding of communications. He added that when we tell stories, we naturally lie to an extent – it's a case of saying what's appropriate in each situation. Olsen also mentioned the possibility of measuring people's reactions to entire radio shows to determine if they enjoyed the content. This is also useful for vetting TV shows that have just aired, to determine whether the audience approves and what can be improved on. mindmetic can also be used as a research tool.

With this in mind, Olsen warned against falling for the idea that 'neuromarketing is the answer'. He said that it is still a very new science, which is meant to give a hint of the emotions of a group of people in reaction to advertising, in order to make better ads in future. This is up to the creatives to fix. Olsen said that neuromarketing provides us with the tools to diagnose the problems with advertising, but it is still up to the creatives to fix the problems and enhance the advertising - they therefore need to be involved in the discussion. Mindmetic is owned by 85 shareholders, but they need to be 200 investors to be noted on AIM stock exchange, so if you would like to become an investor in mindmetic, you can be a shareholder for R20 000, if you make your mind up before December. More information on mindmetic can be obtained from Olsen's blog at www.mindmetic.dk/bj or Mike Broom at mike@PanelServicesAfrica.co.za.

Noel Coburn on winnowing the 'better' from the 'good'

Noel Coburn, a Director of Caxton, he has recently started to integrate findings from neuroscience (how, when and why brains process advertising) with some of the biggest consumer behaviour studies carried out around the world. He explained the relevance of the brain in South African business, touching on the importance of priming, and the need to 'winnow' the better from the good, explaining the potential neuroscience holds for marketing. Coburn explained that he would be validating what the previous speakers had said, as well as providing his take on the importance of neuroscience. Coburn is by nature fascinated by brain biology, and feels the onus lies on researchers showing how hypothetical behaviour actually plays out. South Africa is a significant industry based on its creative work, and neuroscience raises its efficiency. Coburn stated that he really enjoys the work of Daniel Kahneman, the 2004 Nobel Prize-winner for economics. Kahneman is a scientist who looks at behaviour, and can be said to have 'rewritten the behaviourial rule books'.

Coburn explained the impact of both internal (personality) and external (environmental) factors on behaviour. He stated that the environment affects behaviour much more strongly than previously thought. Coburn illustrated this point with various examples of studies conducted on students at MIT, which showed that influencing one group with words thought of as 'older' made that group walk more slowly than its 'younger words' counterpart. It was also shown that providing students with a simple choice, such as studying in the library or watching a favourite movie and then adding another attractive option, such as watching a rock concert, changes their behaviour and choices. Given two similar, attractive options often makes the respondent choose the least attractive option. Two separate groups at an auction were also tested. The first group was told to think of a high number, while the second group was told to think of a low number. The groups made their bids in the auction accordingly, with the 'higher' group making much higher price bids. Coburn states that this shows that environmental/ external effects are much stronger than we think. He went on to explain that priming is when we generate behaviour from the non-conscious by giving it certain clues. He demonstrated this with a short video of Derren Brown, who is well-known as a magician, but is also a cognitive psychologist and a priming expert. He announced over a loud speaker in a crowded mall that he hoped the shoppers experience would be an 'uplifting arm' instead of 'uplifting one', then announced 'now!', and all the shoppers seemingly unconsciously lifted their arms in the air.

According to Coburn, neuroscience has lead to a big upset between the 'old' and 'new' models on the way our brains work. In terms of information processing, we live in a very fast world. Brain scans can now show the areas of the brain involved with intentionality, and it takes us just 750 milli-seconds to identify what is seen. Eye cameras also show that human fovial vision is very concentrated, with just a seven degree arc of focus. Coburn recommends Robert Heath's book, The Hidden Power of Advertising, in this regard. Coburn demonstrated the usefulness of eye-tracking by explaining an example of an ad where a cartoon frog with huge lips complains of a sore throat. Some cough syrup is poured and given to the frog, but as the audience is distracted by the big moving lips, they don't focus on the cough syrup bottle branding. Coburn stated that market research previously had a wild tommy-gun approach, and that neuroscience developments would bring market research results closer to the mark.

Coburn's main point was that brain scans have indicated that certain concepts (such as 'dog') are interpreted in a single area of the brain, but that there are certain distinctions. He adds that brands are seen in the same way, such as instant coffee brands Ricoffy and Frisco. This means that when we encounter a new coffee brand, such as Maxwell House, we are still able to determine that it is an instant coffee brand as it meets our cognitive picture for what a coffee brand should look like, despite differences in brand colour and slogans. This emphasises the need to be distinctive when entering a market that already holds similar products, as it is the features that differentiate you from the other recognised brands that will make you stand out in consumers' minds. Coburn states that The Economist makes good use of this by posting street sign- and taxi-branding ads with a simple slogan relating to the magazine, using its iconic red and white typeface. The ads are therefore instantly recognisable to its readers. In another example, Coburn mentioned the Famous Grouse whisky ads, in which the animated grouse is seen zooming past the camera, with the slogan 'a quick one' following suit; and skidding across an ice slick, with the catch line 'on ice'. People associate the animated bird with the whisky brand to such an extent that there is no need to include the logo with the advertising. A good message for marketers to take home.

Andy Rice on an advertising practitioner's perspective on the changing nature of advertising

Marketing strategist and consultant, Andy Rice, started off his presentation by stating that the nature of advertising is changing so rapidly from the set 'formulas' everyone worked with five years ago. As a result, it is now harder to apply empirical processes, as advertising is hard to pin down to certain criteria. He then shocked the audience by stating that he believes Victoria Beckham clearly understands the role of brands, as advertising and communications writer, Jeremy Bullmore, quoted Beckham in the title of a lecture Rice attended a decade ago: "I always wanted to be more famous than Persil Automatic," a well-known British detergent brand. This demonstrates how brands have gone beyond being 'things that facilitate transactions', and now play a bigger role in people's lives. Rice also quoted Robert Heath, stating that the salient points were more important than the overall persuasion, and that, "we don't need to go in there with a different persuasive message each time, but we do need to be seen as consistent.

Rice then demonstrated clips of various ads that he feels have 'got the right idea' in terms of meeting the new advertising challenges. He mentioned that Coca-Cola knows how people access and admire the brand, which is why its 'Open Happiness' ad was such a success. He calls it a 'strange animal' as it is entirely unbranded, but the interpretation of the ad as being for Coca-Cola is completed by the consumer. He then showed a clip of the United Airlines' guitar music video parody, which is an example of brand-bashing in a viral video, which resulted in five-million views in just one week. Rice stated that there is a rising trend for co-creation and user-generated content in advertising, which results in a loss of complete control of the brand creation process.

... Rice's core message was therefore that the nature of advertising is changing in the following ways – branding is becoming covert; there is often no creation or co-creation of the brand; brand citizenship, which illustrated that the resulting behaviour trumps the advertising message; there is cultural cross-over in advertising; and advertising offers insights into life, not merely retail categories. Rice's final thought on the topic was that research can be beneficial in offering advertising support rather than illuminating the way, paraphrasing David Ogilvy's quote about "the drunkard leaning on the street pole for support rather than to light his way.""

The panel's final thoughts on neuroscience

Following afternoon tea, Broom led a panel discussion with all the speakers, where attendees were encouraged to ask questions and add their opinions to points already made. The panel was intended to highlight new ways of dealing with a new world. Rice kicked off by stating that he is not anti-research, but rather wants a better body of research regarding advertising and its effectiveness. He pointed out that ad agencies may be guilty of doing research too late or simply as a safety net for producing shoddy work, as "the ad can be fixed once it has been tested." He feels we need this insight right at the beginning, so that better judgement can be used at a later stage. Ward re-iterated that online research panels definitely have a role to play in improving the quality of marketing research. Olsen added that neuroscience should be seen as a form of 'dictionary' to tweak the resulting research afterward, as one would use a dictionary or thesaurus to improve on a poem once it is written – it is not necessary to be used from the first word. Ward added that with the rise of user generated content, we are no longer in control, and that we "can't put the genie back in the bottle". We therefore need to embrace and understand neuroscience and its implications for marketing.

Mike Broom is the sole owner and director of Marketing Science. Established in 1992, Marketing Science set out to investigate and develop new technology for use in marketing research. As marketing research connects the decision-maker with the consumer, there are many opportunities to enhance the process. This ranges from: sampling theory; measurement; data collection; processing; and analysis, to interpretation; knowledge-creation; decision support; and deployment of the information to decision-makers. In 2009, a separate company was formed to deal with all of Marketing Science's online and panel activities. Panel Services Africa works with clients who wish to run their own consumer and CRM panels, as well as with market research companies who offer consumer panel survey services. For further information, please visit www.panelservicesafrica.co.za.