What I would like you to do is imagine for a moment that you're in a bottle shop.
You're actually in a bottle shop perusing the red wines on the shelf.
You've cooked yourself, well you're about to cook a delicious meal for the evening,
perhaps it's a red meat and you need just the right red wine to top off the meal.
And on the shelf you see two quite similar bottles of red, perhaps the same vintage,
the same style, similar price, but they're different brands.
How do you choose between products when they're quite similar?
And while you're pondering this choice just imagine that in the background some music
started wafting away, let's see if we have the music, here we are, some music started
wafting away in the background that perhaps was more strongly linked with one of the
brands than the other.
Would you notice the music, would it actually affect your decision?
And if it affected your decision would you actually be aware that it did have that effect?
Well the reason I'm sort of priming you with this thought is a group of researchers explore
this very issue just over ten years ago.
And so they set up a shelf in a real bottle shop, bottles of red wine on the shelf, two
almost identical bottles of red wine, but one was branded in a very German way.
It had a German label and a German manufacturer, whereas the other was French.
So they have a French and a German wine, otherwise identical.
And what they did was over two weeks each alternate night they played music in the background
of this bottle shop that was either prototypically French or on the other day prototypically
German.
And they alternated day by day.
And then if a shopper bought one of those bottles of wine at the checkout they were asked
if they would complete an interview about why they bought the wine.
And the results are quite striking, here's what they found.
When French music was played, French wine outsold German three to one and vice versa,
when the German music was played three to one, so a staggering effect of this music
on the decisions.
Now that's perhaps interesting, but what's more interesting is about the people's reactions
to those decisions.
And what was found was that of 44 people that were interviewed, only one of them said a
little bit spontaneously, yeah I think maybe the music had an impact on my decision.
And even more staggering, 86% of people specifically said no, the music did not influence my decision.
So that's staggering, we've got a three to one effect of the music and we've got 86%
of people saying no it didn't affect my decision, where's the gap, how can that possibly be?
Well this is one of many insights that we're just starting to realise how poorly we are
connected with the reasons that we make decisions in our decision making processes.
So if we ask how well can we report the influences on our decisions, probably the best answer
is we're not actually very well at all.
Let me give you another example.
Another study explored whether we could be influenced in our decisions by things that
we had no knowledge of seeing whatsoever.
And what this study did was have people taste some orange juice and they rated how much
they liked the orange juice and then they rated how much they would be prepared to pay
for this particular orange juice.
What these individuals didn't know was before they made their decision they were actually
flashed a facial expression.
They saw these neutral faces on screen but what they were actually presented with was
a momentary change in facial expression.
Now it was actually a lot faster than that.
Now you could see that but the facial expressions changed so quickly that they were subliminal
you could not possibly know that you'd been presented with them.
So they're the faces that people actually saw and here's how they affected their ratings
of the orange juice.
This graph shows their willingness to pay and the end of the story is that flashed a
smiling face before you make your decision people that were thirsty were prepared to
pay three times as much for the orange juice.
They didn't know they'd seen it.
They had no awareness whatsoever of this influence but it drastically affected their decision.
So once again we're seeing here that even when we're not aware of any influences on
our decisions we can be biased in some way or another.
My colleagues and I at the University of Melbourne have explored another angle on this.
What we've done is explored the extent that brand, brand logos actually influence our
decisions and what we did was a similar thing.
We flashed brand logos at people before they made a choice.
The choice we gave them was whether they would like a reward right now.
Would you like $20 right now or would you be prepared to wait 10 days and receive more
money later on?
And what we found is that when flashed a logo subliminally so they didn't know they'd seen
it for a very powerful brand they became more impulsive.
They wanted money now more than if we'd flashed them something that wasn't a brand logo.
And we can see these underlying subconscious decision making influences at work here.
We also recorded brain imaging responses while people made these choices and we saw areas
in the brain linked with processing the reward value of a stimulus firing when presented
with this Apple logo.
So this all points to a couple of implications of this lab research.
Our decisions are influenced by a range of processes besides our conscious rational thought.
And the extent that we can talk about these influences is extremely limited.
It is very difficult for us to annunciate why we made decisions and actually be accurate
about it.
These kinds of thoughts are echoed by recent research in the neurosciences.
And almost 20 years ago now a very influential book by a clinical neuroscientist called Antonio
de Marzio, his book Descartes' Era, showed that certain areas of brain damage limits
people's ability to add an emotional tone to their decisions.
And when you don't add emotions to your decisions, people make bad, bad decisions.
We once thought that cold rational thinking is the best way to make a decision.
Well it actually appears to be the other way around.
We actually need emotions to make good decisions.
And when we lose that ability, we tend to make bad decisions.
So where does this influence on our decisions come from?
Well about 10 years' worth of neuroscience research has been showing that we can track
to a certain extent these decision-making influences in certain areas of the brain.
One example is here, this is a study from 2007, and Brian Knutson at Stanford presented
people with products that they could buy.
He gave them a bankroll of money and then he showed them, while their brains were being
scanned, products that they could buy, and then he showed them how much it would cost
them.
And then people made a decision about whether they would like to buy or not.
And what he found, long story short, is that when people chose one of these products, areas
deep in the brain linked with our processing of rewards fired.
And these areas appear to be prevalent in much of our decision-making, if not all of
that about decision-making, but they're very difficult areas for us to be aware of that
influence occurring.
So what do we do with this?
Well of course, market researchers are fascinated by this.
They've for 100 years been asking people questions about why would you buy something?
Do you like this product?
Do you like this advertisement?
And of course, if verbal responses don't provide accurate information, well there's
something missing.
So this has been the background to why techniques that draw on physiological measures and neuroscience
based techniques have become of interest to marketing research organisations.
And there's two broad streams of research happening now.
Is market research companies are using these body signal measures to get a better group
on the way people respond to stimuli?
And academics as well, such as myself, are very interested in using these tools to better
understand how we make decisions.
So that brings us to the world of neuro-marketing.
Here's a basic definition.
This is something that I teach my students.
There is no one correct definition of what neuro-marketing is.
It's a very young field and it's still in a somewhat of state of flux.
So the definition I teach my students is neuro-marketing is the use of theory and tools from the cognitive
neurosciences to inform marketing activities and marketing theory.
Here's a basic model of how we might do it.
We need to understand thinking processes that people use to make decisions.
We then use tools from the neurosciences or psychophysiology, as it's called, using measurements
of the body that reflect thinking, and then we apply it to marketing practice or theory.
I'll just dig into that very briefly.
Thinking processes.
We need to understand how people take information in from the world, how they learn from it,
what they do with it, and then how they use that information to make decisions.
And there are existing theories from cognitive psychology, for example, that we can draw on
and use to explore these issues.
Tools.
What kinds of tools do neuro-marketers use?
Well, there was a recent paper in 2010 published in Harvard Review of Psychiatry.
And they found 16 companies on the internet using neuro-marketing techniques.
Five of those companies used fMRI, Functional Magnetic Resonance Imaging.
And I'll show you about that in a moment.
Most of the companies were using a technique called EEG.
As you'll see, Shane is using and collecting EEG signals off his scalp, as we speak.
So very briefly, fMRI, Functional Magnetic Resonance Imaging.
It's a medical technique, and essentially it explores blood flow in the brain or through
the body.
And the logic of using this is that when you think, your brain acts something like a muscle.
It uses energy.
It needs more blood flow.
And this device actually tracks where that blood flow goes to.
It has a high degree of accuracy.
It can look deep down into the brain with a couple of millimetre precision.
Another technique, EEG, and this is probably the most common used.
This is picking up electrical signals in the brain as groups of neurons fire.
The difference with this particular technique is it's picking up activity on the scalp
rather than deep inside the brain, but it's very good at picking up very fast changes
in activity.
So neuromarketers have been using this, for example, for advertising, copy-testing, looking
at moment-by-moment changes in an advertisement.
And finally, some of the other tools that are being used pick up other kinds of signals
from the body.
The top image is facial electromyography, which is picking up whether people are smiling
or frowning.
And the reason that's useful is sometimes we have micro expressions in response to an
ad or a product, and this technology can actually pick that up.
Eye tracking in the middle picks up where people are actually looking, where they're
focusing their attention.
And you can use eye tracking in conjunction with, let's say, EEG, so you know where someone's
looking and what's going on with EEG at the same time.
And the bottom image there shows skin conductance response, picking up a measure from the hand
or the skin that reflects how aroused somebody is.
So various neuromarketing companies are combining various permutations of these tests to pick
up signals that are aimed to reflect how people think in response to a product or an idea
or a movie on an advertisement.
And that's the applied part of the equation.
So what's being done with it?
Product testing is one application.
Believe it or not, marketers aren't so much interested in manipulating people as they
are in understanding what people value, what people want.
That's really what the core of market research is about, trying to understand what people
want.
And these tools are very good for picking up signals that reflect whether you are actually
driven towards something.
And then that can be built into product design.
There was a lot of advertising copy testing going on using these tools to get a bit of
grip on second by second changes in people's responses to an advertisement and whether
it's actually connecting with people.
And academics, such as myself, are using these tools to better understand how people
make decisions.
So I know I was only to give you a very brief introduction.
So I think I'll leave it there, a quick acknowledgement to my peers at Melbourne University, and that's
it for me.
Fantastic.
Thank you, Bill.
