This Is Your Brain on Advertising
By taking neuromarketing out of the lab and into the mall, a small British firm is helping world-class advertisers make their pitches more effective.
By Thomas Mucha

(Business 2.0) – As an attractive Englishwoman in her early 20s wanders the mall with a set of electrodes affixed to her scalp, David Lewis sees the activity of her alpha and beta brain waves--"the stuff of human thought," he calls it--splashing across his computer screen in a zigzagging mass of red and green. "She's alert but not engaged," he explains as his subject saunters into an upscale shoe store. Which is true, until she picks up a pair of pink stilettos. Suddenly a colorful explosion of activity cascades across Lewis's screen. "You can see that beta activity on the left side of the brain--the analytical side--falls away," he explains. "Look how quickly the purchase decision takes place!" And indeed, a few minutes later, the cash register rings and the woman strides back into the mall with the pair of heels in a bag.

As chief scientist at market research company Neuroco of Weybridge, England, Lewis conducts similar experiments for global players including Bridgestone, Hewlett-Packard, and some in the food, beverage, and cosmetics industries. The United Kingdom's first agency built on the nascent science of neuromarketing, Neuroco is at the forefront of a new discipline being touted as the most important breakthrough in marketing research in a generation.

The theory is certainly intriguing: By studying activity in the brain, neuromarketing combines the techniques of neuroscience and clinical psychology to develop insights into how we respond to products, brands, and advertisements. From this, marketers hope to understand the subtle nuances that distinguish a dud pitch from a successful campaign. "There's a lot to learn about consumer behavior by opening up the black box," says Harvard University economics professor David Laibson.

Most neuromarketing researchers today use functional magnetic resonance imaging (fMRI) technology--hulking machines that generate high-resolution images of the brain as it responds to incoming stimuli. But the heft of fMRI machines (each is the size of an SUV and weighs 32 tons) means they must remain within the sterile confines of a medical lab. Neuroco, however, has figured out how to move neuromarketing into the real world by using electroencephalography, or EEG, technology that's lighter, more mobile, less intimidating, and a third less costly. That allows the company to probe gray matter at locations where consumers are actually found: at shopping malls, in auto dealership lots, or at home in front of the telly.

A self-described embryo in the sprawling $358 billion global advertising industry, privately held Neuroco hopes to parlay its neuromarketing insights into riches. Because neuromarketing is so new--and so potentially creepy--Neuroco's brand-name clients are reluctant to talk about the research they've commissioned; none agreed to speak directly with Business 2.0. But Neuroco is off to a promising start; founded in March, the company has already signed up six multinational clients and established relationships with many of Britain's largest advertising agencies.

Untethering the Mind

Lewis works in a cramped Neuroco basement laboratory just outside the English seaside resort of Brighton. Visually, the place doesn't disappoint: Lewis keeps a jar of sheep brains on the desk, alongside a bulky microscope. The mad-scientist decor befits a cutting-edge discipline fraught with unknowns, but Lewis's research is already finding a home in the mainstream.

Take insurance--an industry not known for running unnecessary risks. Hired by Royal & SunAlliance, the second-largest U.K. insurance company, Lewis evaluated one of Royal's 30-second television spots by wiring 60 volunteers with electrodes. Then, frame by frame, Lewis examined the subjects' EEG readings as they watched the commercial. He discovered that the viewers' brains were most engaged during the ad's dramatic action scene, but interest flagged significantly at the tagline, "You'd better ring the Royal."

"The results suggested that the catch-phrase was unlikely to prove memorable," Lewis concluded. Royal pulled the spot shortly after the experiment.

To help avoid such mistakes, Neuroco also works with clients during the planning stages of campaigns. Earlier this year HP hired the company to evaluate which images would give a new digital photography campaign the greatest neurological boost. Lewis presented his subjects with two nearly identical shots of the same smiling woman. During face-to-face interviews, the subjects split their choices between the two photos. Yet EEG analysis showed a strong preference for one image, in which the woman wore a slightly warmer expression. HP marketers chose the EEG-endorsed smile for the campaign. "The Neuroco data was priceless," says Alex Wood of Porter Novelli, the outside marketing agency that commissioned the research on HP's behalf. "It gave us insight that goes beyond normal market research."

To dig out such secrets, Neuroco charges an average of $90,000 per study. And its list of services is growing: The firm will evaluate the subliminal power of colors, logos, or product features. It measures the mental might of music or jingles, the heft of celebrity endorsers, and the most brain-wave-soothing designs for store layouts. The company is even testing neurological reactions to smell and touch, and has worked with U.K. auto dealers to gauge responses to the feel of automobile upholstery and the sound of a car door as it slams.

The Reptile Within

What are researchers learning? For one thing, they're more convinced than ever that feelings matter. "The big breakthrough," says Erik du Plessis, author of The Advertised Mind: Ground-Breaking Insights Into How Our Brains Respond to Advertising, "is understanding the role that emotion plays in rational decision-making."

Until recently, that role was thought to be limited. Economic decisions, and in particular the perception of economic benefits, were assumed to be the realm of the frontal cortex, the section of the brain in which rational thought occurs. Yet this was only partially correct. While scientists have determined that evaluations of long-term economic rewards are indeed processed by the rational brain, perceptions of short-term rewards--the stuff of impulse purchases--are actually governed by the limbic system, the "reptilian" sections of the lower brain where emotions are processed. And in the context of a sales pitch, emotions come first. Moreover, the tenor of those feelings exerts a powerful influence over the way we process any factual information that follows. When jolted by an attention-grabbing experience--a car backfiring, or Paris Hilton squirming for Hardee's--the reptilian mind automatically snaps to attention. For a few seconds, the regions that control rapid decision-making become energized, and the strength of this reaction influences how much attention consumers give to what they observe.

"If you're transmitting a brand message or delivering a product claim, you don't want to do it during the emotionally aroused phase," explains Stanford University communications professor Byron Reeves. Instead, you might do it right afterward, when the brain is primed to receive new information.

"If you get the emotional impact of the message right, everything else will follow," Lewis says. Even so, he knows that his powers as a consumer soothsayer are limited. "I can measure consumer attentiveness or whether they're attracted or repelled," he says. "But I can't tell you if they're going to buy the blue dress." For this very reason, after collecting neurological data Neuroco also runs test subjects through traditional focus groups. Combining the two techniques remains the most reliable way to understand likely consumer behavior.

Naturally, some are skeptical. Though enthusiastic about neuromarketing's potential, Carnegie Mellon economist George Loewenstein, an expert on the biology of economic decision-making, points out that current technology offers poor spatial and temporal resolution, "so making sense of what's going on involves an element of tea-leaf reading," he says.

Other critics find neuromarketing inherently worrisome. Commercial Alert, a nonprofit consumer advocacy group, has asked the U.S. Senate Committee on Commerce to investigate neuromarketing techniques. "The ill effects of this quest for the 'Buy' button are many, while the potential benefits are few," complains Commercial Alert executive director Gary Ruskin.

Neuroco's Lewis says he's heard it all before. "Brave new world, Orwell, all this stuff about reading minds--I wish it was true!" he chuckles. "I'd be wealthy indeed."

Besides, for the moment, corporate wariness is the more pressing challenge--no company wants to be associated with creepy science. Over time, familiarity may do much to ease such worries. More dangerous, perhaps, are unrealistic expectations about what neuromarketing can do. It will never find the "Buy" button; instead, it's merely a tool to help minimize risk and maximize possibilities. As Lewis puts it, "Neuromarketing is the study of how humans choose, and choice is inescapably a biological process."

Now, doesn't that feel better?