neuromarketing

What Is Neuromarketing? Neuromarketing In A Nutshell

  • Neuromarketing is the application of neuroscience and cognitive science to marketing. The strategy gathers information from the human subconscious to determine why consumers choose one product over another.
  • Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
  • Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.

Understanding neuromarketing

For consumers, decision-making used to be easy. Today, however, they are inundated with information and even the simplest products come attached with endless choices. 

The humble bottle of mineral water is one such example, with hundreds of brands now selling the product in the United States alone.

This begs the question: how does a consumer choose between brands when there can only be so much variance in a tasteless product?

In other words, what makes a consumer choose Aquafina over Evian? There may be no clear-cut answer to these questions.

Nevertheless, the purchasing decision may be influenced by the design of the bottle or a personal experience the consumer had with the brand itself.

The point here is that consumers make most of their purchasing decisions subconsciously. Despite this fact, many businesses persist with traditional market research methodologies such as focus groups and surveys.

But if we accept that consumers cannot consciously express the subconscious reasons for a purchasing decision, we can then accept that traditional strategies are somewhat ineffective. 

This is where neuromarketing is useful since it is the only way to gather information from the human subconscious.

Using this information, marketing teams can better understand how to develop, price, and advertise products and services.

How is neuromarketing information collected?

This vital information is collected in two ways:

The measurement of neurological brain activity

Which directly measures brain activity related to specific brain functions using EEG, fMRI, and steady-state topography (SST).

For example, steady-state topography measures the speed of electrical activity on the surface of the brain and links variance in certain areas to specific metrics like memory coding and engagement.

The inference of neurological responses by proxy

This approach uses eye tracking, facial coding, and biometric data such as heart rate monitoring.

It is not as robust as the first method because it is not underpinned by true neuroscience and the resultant data allows for broader interpretation.

Using these approaches, neuromarketing has been used primarily in product design testing, user experience (UX) design, cross-platform testing, audio branding testing, rebranding, and second-by-second optimization of television advertisements.

Neuromarketing examples

It’s important to note that neuromarketing is an expensive undertaking for any organization

For example, an entry-level functional magnetic resonance imaging (fMRI) machine can cost as much as $300,000, with premium machines retailing for more than $500,000.

What’s more, the price of a single electroencephalogram (EEG) study may run as high as $20,000.

This means neuromarketing is primarily used by large companies or those that are heavily subsidized. Examples include:

Google

The search giant partnered with MediaVest and biometrics researcher NeuroFocus to evaluate how users responded to the semi-transparent overlay ads in YouTube videos.

Forty individuals took part in the study, with their responses measured against criteria such as emotional engagement and attention.

The Weather Channel (TWC)

This company also partnered with NeuroFocus in preparation for the launch of a new series entitled When Weather Changed History.

A combination of EEGs, eye-tracking technology, and galvanic skin response (GSR) was used to ensure the company’s commercials and documentary content had maximum impact on the viewer.

Frito-Lay

American snack-food manufacturer Frito-Lay analyzed the female brain to determine why most women preferred fruit and vegetables over its line of salty snacks.

The company discovered that the part of the brain responsible for processing memory and emotion was larger in females and they often looked for characters they could empathize and relate with.

Decision-making areas of the brain were also larger, which meant female consumers were more prone to feelings of guilt. In response, Frito-Lay redesigned its snack packaging to prominently feature healthy ingredients.

The company then released an advertising campaign making explicit connections between women, exercising, healthy eating, and of course Frito-Lay snacks.

Types Of Marketing Connected To Neuromarketing

Email Marketing

email-marketing
Email marketing leverages a set of tactics to build a stronger brand, drive traffic to your products, and build a solid funnel for converting leads into loyal customers. While email marketing isn’t new, it’s still one of the most effective marketing strategies to build a valuable business.

Affiliate Marketing

affiliate-marketing
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Influencer Marketing

influencer-marketing
Influencer marketing involves the marketing of products or services that leverages the popularity, expertise, or reputation of an individual. Influencer marketing is often associated with those who have large social media followings, but popularity should not be confused with influence. Influence has the power to change consumer perceptions or get their audience to do something different.

Sustainable Marketing

sustainable-marketing
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.

E-commerce Marketing

e-commerce-marketing
E-commerce marketing is part of the digital marketing landscape, and beyond, where e-commerce businesses can enhance their sales, distribution, and branding through targeted campaigns toward their desired audience, convert it into loyal customers which can potentially refer the brand to others. Usually, e-commerce businesses can kick off their digital marketing strategy by mastering a single channel then expand for a more integrated digital marketing strategy.

Buzz Marketing

buzz-marketing
Buzz marketing leverages the power of word-of-mouth advertising to create products or services with enough novelty that they go viral. In many cases, buzz marketing leverages on versatile content that can easily scale and be readapted to various contexts and fear of missing out (FOMO) to amplify the effect of word-of-mouth campaigns.

Shotgun Marketing

Shotgun Marketing
Shotgun marketing is a form of above-the-line (ATL) marketing, where popular mediums such as TV and radio are used to market to a mass audience. This technique of marketing targets as many consumers as possible. Also known as mass marketing, the technique attracts a large number of leads that, on average, might be of lower quality in nature.

Multichannel Marketing

multichannel-marketing
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.

Inbound Marketing

inbound-marketing
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Partnership Marketing

partnership-marketing
With partnership marketing, two or more companies team up to create marketing campaigns that help them grow organically with a mutual agreement, thus making it possible to reach shared business goals. Partnership marketing leverages time and resources of partners that help them expand their market.

Growth Marketing

growth-marketing
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

guerrilla-marketing
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Ambush Marketing

ambush-marketing
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Relationship Marketing

relationship-marketing
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

Connected Business Concepts

First-Principles Thinking

first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Ladder Of Inference

ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.

Six Thinking Hats Model

six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Moonshot Thinking

moonshot-thinking
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Dunning-Kruger Effect

dunning-kruger-effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Mandela Effect

mandela-effect
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

crowding-out-effect
The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

bandwagon-effect
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.

Read Next: BiasesBounded RationalityMandela EffectDunning-Kruger EffectLindy EffectCrowding Out EffectBandwagon Effect.

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