By Charles Cooper
Researchers recently gathered in the basement lab of the Li Ka-Shing Center for Biomedical and Health Sciences at UC Berkeley to catch a glimpse into the future of marketing.
From all signs, the future points to brain scans, which promise to one day take some of the guesswork out of the field.
“We are trying to put numbers on some of the most difficult and intangible features of business: people’s thoughts and feelings,” says Ming Hsu, assistant professor in the Berkeley-Haas Marketing Group, (pictured below), who runs the Neuroeconomics Laboratory at UC Berkeley. “We’re using technology to quantify and measure what used to be thought of as qualitative or ephemeral.”
Hsu is on the bleeding edge of a relatively new research field, combining techniques borrowed from neuroscience, psychology, and economics into a single approach to learn how people make personal choices.
“Understanding how consumers think is fundamental to marketing and business,” he said. “If we can advance the current state by even a little bit, it would have a big impact.”
While Hsu’s recent research ranges from the link between honesty and the prefrontal region of the brain to how altering brain chemistry can make us more sensitive to inequality, the focus of this particular study is on how people think about brands.
Overall, Hsu’s research has a broader goal—to understand how consumers actually think and act.
“Even with the incredible changes in brain-scanning technology, neuroscientists have been restricted to offering marketing insights that are either too clumsy or too indirect,” says Leif Nelson, the Ewald T. Grether Professor in Business Administration & Marketing at Haas. “What Ming does is, for the first time I think, catch neuroscience up to the desires of marketing professionals.”
Searching for truth
Participants in Hsu’s studies have their brains scanned by a functional magnetic resonance imaging machine (fMRI). The idea is to study how dynamic changes in brain activity (thus, the the term fMRI) reflect and produce human thoughts, memories, and feelings.
Changes in neural activity results in vascular changes that have tiny effects on the magnetic properties of the brain, which are then picked up by the scanner. In this study, the goal is to address a fundamental and almost existential issue facing marketing, whether what people say matches what they actually think about well-known brands such as Apple, Disney, Ikea, BMW, and Nestle.
Once the test begins, Hsu’s team projects different brand logos on a screen and the volunteers are asked to think about what they see. All the while, the scanner is working in the background scanning their brain.
Then the real work begins as Hsu and his team pore through the data. Each brain scan involves tens of gigabytes of data and some of the bigger experiments even measure in the terabyte range. The researchers search for links between the brain activity and what the volunteers saw on screen. They watch to see whether the scans captured something about the way the brain processed responses to the different brands mentioned during the experiment and whether they triggered a particular pattern of brain activity.
“People say a lot of things, a lot of which are true but some are not,” according to Hsu. “We want to develop ways to separate these.”
The road to Haas
Hsu, who was born in Shanghai, moved to Arizona with his family when he was 10. He studied political science as an undergraduate at University of Arizona. But his academic future took a decisive turn when he attended a presentation by economics researchers explaining the use of fMRI to advance the understanding of game theory.
“There was this presentation about scanning people’s brains while they played economic games,” he says. “That’s when a light bulb went off in my head. I had never heard of anything like this and was pretty sure that not much was being done with it. The idea made so much sense. It sounded like such a neat way to ask questions and I would love to know what the answers were.”
He immersed himself in neuroscience and cognitive neuroscience. The deeper Hsu got into the subject, the more he saw the possibilities for using brain imaging techniques to gain a more coherent understanding of human economic behavior.
“By the mid-2000s, people realized that it’s not just a dream, but that we can actually do it,” he said.
After getting his PhD in Economics from the California Institute of Technology, Hsu arrived at the Haas School in 2009, where he began to put his ideas into practice.
“I didn’t have much of a marketing background but Haas was willing to take the risk,” Hsu recalled.
Peering over the horizon
Neuromarketing is a relatively new discipline that only began gaining traction in academia in the middle of the last decade. And as with any new field offering bold claims, it’s engendered skepticism and some controversy.
Some critics question whether the field can deliver on its promises. In a widely-read 2005 article, Princeton economists, Faruk Gul and Wolfgang Pesendorfer, dismissed the value of brain scans and attacked neuroeconomics as offering “no challenge to standard economic methodology.”
The other criticism centers on the ethics of peering into consumers’ brains and sharing insights with corporations.
Hsu said much of the negative reaction is based on an assumption that if you hand companies this technology, they will exploit it.
“I don’t know whether it’s because some people have a fondness for dystopian science fiction,” he said. “But with new technology, the first reaction is often, `This will result in something terrible.’ But that tends to ignore the possibilities of improving our lives as consumers.”
He said neuromarketing techniques can help companies to better understand and serve their customers with improved products and service that are more closely attuned to consumer desires. Instead of taking a participant’s response at face value, Hsu’s team can actually check whether what someone says actually corresponds with what they’re thinking.
That could prove to be a boon for marketers, who now must sift through reams of often contradictory information compiled from focus groups, surveys, social media, and dozens of other data sources, and figure out what consumers really want and need.
To be sure, marketers have been seeking neuroscience insights long before that was ever possible. While market researchers frequently describe themselves as trying to get inside the mind of consumers, that was only in the realm of metaphor. But as Hsu’s work brings researchers to a closer understanding of patterns of brain activation and how people think and feel about a brand, a new future is coming into focus.
“That’s where neuroscience—or any technology that can validate what people say, versus how they think—can help,” Hsu said. “Obviously this will be a long journey, but I’m very excited.”