Imagine you are a marketing researcher hired by a mid-sized clothing company to find out whether consumers will respond favourably to a new clothing line. Although this is a big task, you are not worried because you are able to answer this question quickly and easily with a new technology you have just gotten your hands on. This new technology works by placing virtual reality (VR) goggles on your research participants’ heads, and while they check out the new line virtually, you receive their brain activity on your computer. Based on this brain activity, you can then tell if consumers will like the line or not. Is this the future of neuromarketing in marketing research?
What is Neuromarketing?
The thought experiment above is made possible by something known as neuromarketing. For those unfamiliar with the term, neuromarketing is a blend of marketing and neuroscience that involves measuring physiological and brain activity to understand consumer behaviour. Harvard Business Review reports that Neuromarketing can be used in marketing research to gain a deeper understanding of what consumers prefer, what motivates them, and can even help marketers gain insight on why consumers make decisions. This can help marketers to better understand how to develop, price, and advertise products.
Today, neuromarketing is most often done through something called a non-evasive Brain-computer interface (BCI). A BCI is a communication pathway by which an external device receives information from the central nervous system. One of the most common BCIs used in marketing research is an EEG that is hooked up to an external BCI system so that the neuromarketer can see the output. An EEG device measures electrical activity in the brain. When hooked up to an external BCI system, the EEG reveals patterns that can tell the neuromarketer whether the individual is happy, sad, frustrated, distracted, and more. In addition to EEGs, there are many other physiological tools that can be used in marketing research. For example, neuromarketers have used functional magnetic resonance imaging (fMRI) to look at activity in certain areas of the brain through measuring blood flow. Other neuromarketers prefer less invasive measures, such as eye-tracking. Eye-tracking can be useful to see where individuals tend to fixate when looking at advertising. This information can help neuromarketers decide if it is a good idea to run the ad or, if the participant is fixating on the wrong thing, it can serve as an indication to the neuromarketer that the ad needs to be changed.
Theoretically, Why is Neuromarketing Better than Traditional Marketing?
As psychologist Daniel Kahneman described, the human brain has two operating systems: system 1 and system 2. System 1 is unconscious – it is automatic, effortless and makes up about 98% of our thinking. On the other hand, system 2 is conscious – it is deliberate, controlled, and makes up only about 2% of our thinking. When it comes to making decisions, Kahneman argues that system 1 almost always overrides system 2, meaning, system 1 usually determines our behaviour and decisions.
Traditional marketing research, where individuals are simply asked to answer questions, only tap into the conscious mind, since the conscious mind is required to answer questions. However, since many of our decisions are made with our unconscious mind, the results from traditional marketing research may not always be accurate, and may be subject to biases. Neuromarketing on the other hand, taps into the subconscious mind and potentially allows for a more accurate response.
What’s the Catch?
Although neuromarketing seems like a great marketing research tool, in the past, it has not lived up to the hype. This is because traditionally, neuromarketing is very expensive and sometimes prone to errors. In terms of pricing, an EEG costs about $20,000 per study, where fMRIs cost close to $5 million. In terms of errors, there is a lot of noise, or things that neuromarketers are not interested in, associated with doing EEG research. Sometimes, it can be hard to separate the signal (the output neuromarketers are interested in) from the noise (the output neuromarketers are not interested in).
What Does the Near Future Hold?
Although its past has not quite lived up to its hype, neuromarketing has great potential for the future. One of the ways in which neuromarketing can be used successfully in the future is through collaboration with virtual reality (VR). VR headsets have already gained popularity in the gaming world, and there is now a neurotech company called OpenBCI that is trying to build an EEG device into a VR headset. This device would allow the company to receive neurological data from the individual wearing the headset. Although this company is primarily creating this headset to understand how to design better games in the future, this VR/EEG headset has significant implications for marketing research. For example, what if instead of having to rent out an expensive space to conduct a marketing research study, you could just give participants a VR headset? This headset would allow the individual to see whatever you would like them to, and you measure their neurological signals as they look at whatever you are showing them. Let’s go back to the clothing company example for a minute, where you are trying to find out if customers will react favourably to a new line. What if you could create a virtual version of the store that the research participant could see through their headset? Then, as the participant browses around the “store”, you will receive neural signals that will let you know how the participant is reacting to the new line. That is, you could see, based on their neural signals, if the participant is happy, bored, frustrated, and more! This will give your company valuable insights into whether or not the company should launch the line. In addition to this, an eye-tracker could also be paired with the headset. This would allow the neuromarketer to analyze exactly where the individual was looking during each change in brain activity. For example, if the participant’s brain was giving off “happy” signals when looking at a pair of pants in the new line, but “bored” signals when looking at a blouse, this would provide valuable data to the clothing company. Perhaps instead of scrapping the whole line, it would be valuable to go forward with only a few of the pieces. Although we are not quite there yet, given that this technology is already being worked on, I predict this technology will come sooner than we think.
What Does the Distant Future Hold?
If VR/EEG headsets are just around the corner, one can only imagine what the distant future might have in store. Perhaps one day, instead of having to wear something on their heads, the participants could just put in contact lenses that would measure their pupil dilatation. Pupils change size when an individual sees something positive and when an individual sees something negative Therefore, while these contact lenses could track when the participant sees something that they like or dislike, this could also give the neuromarketer insight into whether or not a company should run an ad or launch a clothing line. Smart glasses also have the potential to measure EEG activity. In fact, smart glasses with the potential to measure EEG are already being developed by a team of researchers in Korea and the United States.
Let’s go back to the virtual store example for a minute. What if I told you that one day, the participant may not need to even wear a headset, contact lenses or smart glasses, that we may be able to directly input the virtual store into their brains? Seems like a sci-fi movie? Elon Musks’ company Neralink is currently working on neural implants that will act as a BCI for gaming, telepathy, saving and replaying memories, and more. Although it will likely be some years before this technology can be used for marketing research, I do suspect, in the long run, this is where neuromarketing is heading.
Although Neuromarketing has had limitation in the past due to cost, the technology can potentially be of great value to marketing researchers in the future. I predict that the VR/EEG headsets will start being used regularly in marketing research within the next 5 years. Although there may be some valid concerns with privacy, safety, and more, I predict these concerns will be addressed before the technology mentioned in this article is put into mass production.
Master of Marketing student
Schulich School of Business