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WARC TRENDS

TOOLKIT 2015 >> Six major marketing trends for the year ahead

Research in 2015: Neuro goes mainstream How clients are using neuroscientific research to improve marketing effectiveness

This chapter is taken from Warc’s Toolkit 2015 Other chapters include Strategy, Consumers, Social, Shopper, Media In association with

1. At a glance Takeaways from this chapter 1. Neuro is becoming easier to trial Momentum is building behind neuroscience-based research, partly because costs have come down and research turnaround times have shortened. With a typical entry-level project costing $5,000, it is now relatively easy for clients to experiment with neuro techniques. 2. A blended approach is required Ad testing remains the leading application for neuro techniques. A study by the Advertising Research Foundation argues that it should not be seen as an alternative to traditional ad research, but as an important addition that can help improve the impact of an ad. 3. Neuro studies support a multichannel approach Emotion-based research initiatives by MTV and Coca-Cola have concluded that brands that reach consumers across multiple platforms generate significantly higher engagement than those that do not.

How can these tools be used to make ad creative and other marketing communications more effective? – Horst Stipp, ARF

4. Hurdles to adoption remain Although neuromarketing’s potential stretches beyond ad testing, there are still issues facing neuromarketing operators. One is a lack of understanding of neuro techniques among marketers and agency-side planners.

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2. Briefing Neuroscientific research techniques have existed on the edges of the research world for several years. But momentum in the space is picking up. Brands and, increasingly, agencies are experimenting with the techniques, and research companies are building scale in the space. 2015, then, looks set to be the year that many take their first significant step into neuromarketing. As a major Admap feature in 2014 discussed, interest in neuromarketing is being driven by a number of factors: • Traditional research techniques have failed to keep up with changes to consumer behaviour, particularly in relation to digital media consumption. •

There is a growing recognition of the power of emotional appeals in marketing, and a need to measure the power of those appeals.

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Development of neuro techniques – in particular, the emergence of techniques that can be applied at scale, and conducted outside a laboratory (for example, via PC or mobile). Examples include facial coding, implicit response testing and eye-tracking. More research companies now have some form of neuro offer – more than 100 research agencies worldwide do so, according to the report’s author Thom Noble.

• Faster turnaround times (sometimes nearly in real time) and cheaper costs (an entry-level test might now cost only $5,000/£3,200). Yet hurdles to adoption remain. “Too few neuromarketing agencies have strong credentials in insight generation, in building brands or in activating strategies in the marketplace. It is hardly surprising, therefore, that clients sometimes struggle with how to best adopt, integrate and embed these new capabilities into their business,” commented Noble. “In response, agencies have recruited specialist neuro-literate planners and researchers, a trend which is now being replicated client-side.”

Ad testing So where should a brand start, and how can it capitalise on its investment in the area? The obvious area to test neuromarketing is in creative development. Ad testing has become the leading area in which neuro techniques are being applied, and there is a growing body of best practice. Several different neuro techniques can be used to test ads, among them the very expensive, lab-based fMRI, the

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less expensive, EEG, then even more accessible techniques such as eye-tracking and facial coding (see a previous Admap piece for a description of each one). Unilever is one major marketer that has invested in neuromarketing at scale, using facial coding analysis on adverts relating to over 1900 brands in more than 40 countries. Key questions the company uses neuro techniques to answer are: •

Is advertising really engaging viewers emotionally, and in the way we intend?

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Are we telling a strong enough story?

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How are people responding to the main creative idea?

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Will the idea have legs, or does it wane quickly?

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What are the ‘key moments’ which are driving emotional responses and motivation?

Examples are emerging of neuroscience in action. When The Shelter Pet Project wanted to create an advert that changed people’s perceptions of stray animals, rendering them more willing to adopt, it produced an advert featuring a very happy dog. However, eye-tracking by Nielsen Neuro revealed his presence was too distracting – in other words, the dog was too cute. Consumers were more engaged with the dog than the message at key times. He was duly removed from the call to action frames and the campaign was a success, with website traffic doubling after launch.

De Hypotheker, the Dutch mortgage adviser, used fMRI testing to find ways to activate purchase rather than just build brand awareness. It discovered that respondents reacted better to ad concepts that didn’t denigrate rivals or highlight financial anxiety but focused on positive outcomes. This helped guide creative development, optimise copy and predict effectiveness, resulting in De Hypotheker becoming market leader for the first time.

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In 2014, the Advertising Research Foundation completed a second wave of research into neuromarketing, prompted by growing interest from its member base. The focus was ad testing, reflecting the importance of this area of research. The study found that adding neuroscience-based methods to a traditional test of commercial creative could improve the power of the test significantly. It also confirmed that so-called ‘traditional’ measures are still significant predictors of ad elasticities. In other words, the study argued, neuro techniques should not be seen as an alternative to established ad-testing methods, but an innovation that increases the likelihood of creating an ad that grows sales and improves branding. As the ARF’s Horst Stipp concluded: “The key question today, therefore, is no longer if marketers should use neuroscience-based marketing research. The question is rather: how can these tools be used to make ad creative and other marketing communications more effective?”

Brand insight across channels Although ad-testing remains the lead application of neuro techniques, there is an emerging trend toward applying them at the early stages of concept development, helping creative and media agencies assess themes and soundtracks, explore brand extensions and allocate budgets across touchpoints. Meanwhile, areas such as product placement and broadcast sponsorship are being evaluated. Again, examples are emerging. When MTV sought to understand how audiences across the globe felt about the brand, it employed online implicit association tests research. It found that MTV’s fans are the most engaged of any international media brand, with a unique emotional profile. The conclusions reached were: • Multi-platform access is key. Multi-platform viewers have far higher positivity and engagement with the brand. • Emotional alignment of consumer and brand is also very important. There is a resulting multiplier effect in creating a fan base that is emotionally engaged with the content and the experiences they have on these platforms. “The insights – both explicit and implicit – have been embedded into our marketing, communication and creative strategies, as well as helping to inform specific measures for multiplatform campaign reporting for clients of MTV,” commented Helen Rose, MTV’s Insight Director, International. Interestingly, MTV’s findings about the power of multiplatform engagement were echoed in a study by Coca-Cola at the 2014 World Cup. The brand used Facetrace analysis, a relatively simple technique compared with most neurobased tools, to generate emotional intensity scores when assessing the contribution of different media to its brand equity. More touchpoints generally meant better engagement, though the study added that brands had to consider

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the emotional impact of each individual channel. “Planning each touch point to produce the strongest emotional impact possible is the best way to optimise results for the brand.” Some brands now use neuro techniques to analyse everything from POS merchandising and shelf-layout optimisation to findability tests, packaging and pricing assessment. When retailers wanted to understand the growth in Indonesian convenience stores, they used facial coding to analyse shoppers. The research found opportunities for retailers to improve spend-per-shopper with emotional engagement. Many shoppers were found to have ‘lowlevel’ negative emotions such as disappointment and annoyance, which can be difficult to articulate. The store environment and ambience were found to be important, as are functional issues and pricing. Neurometric, biometric and psychometric research methods are constantly evolving – one emerging technique is measuring pulse rates through videos of people’s faces. And yet neuro techniques do not offer easy answers; simply information that needs to be interpreted and applied. Noble recommends that brands invest in training across multiple techniques and appoint a neuro champion to ensure business focus. Marketers should consider how to build neuromarketing into existing frameworks, exploring which techniques and providers will deliver the greatest value.

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3. Viewpoint Why a blended approach is needed Rob Bowles, Manager, Customer Advisory Practice, Deloitte Digital The promise of neuromarketing is to open a window into the unconscious mind and provide marketers with a trove of information about consumer preference, taste and opinion whilst avoiding the subjective bias and possible untruths associated with traditional marketing research, including polls or focus groups. Functional Magnetic Resonance Imaging (fMRI1) provides one such real time, non-invasive brain insight tool. One of the first recorded studies using fMRI for market research purposes was published 10 years ago, and showed how a relatively small sample of subjects (just 67) were required to supply data that appeared to provide statistical confidence that advertising actually works2. In a now classic neuromarketing experiment3, two leading soft drink brands were anonymously delivered to test subjects. Results showed that, despite the near identical chemical composition of both beverages, subjects had a modest preference for Brand A compared to Brand B. This was demonstrated via the monitoring and detection of brain activity in areas associated with taste. When the drinks brands were revealed and the same preference question was repeated an intriguing response was discovered: subjects now preferred Brand B by a ratio of 3:1 and the activated parts were in regions associated with memory. The fascinating conclusion researchers came to was that the subject’s taste preference appeared to be overwritten by years of advertising message consumption. Whilst these techniques can provide real insight, we must approach brain imaging techniques as a relatively new tool with known limitations, and recognise that fMRI remains, at present, only a relatively indirect measurement of what’s going on inside the brain. In other words it cannot read minds4. The understanding provided by fMRI has been likened to that gained by watching the outside of a house on a dark night. Lights go on and off in different rooms and we can draw conclusions, such as where the kitchen is or when someone goes upstairs, but we still don’t really know what is going on inside. Despite these limitations product designers, advertisers and marketing strategists have continued to embrace this

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technology organically developing their organisations or building capability through M&A. Neuromarketing remains a powerful insight tool in a marketer’s 2015 arsenal, and new applications for it will be found. Examples will include the application of neuromarketing techniques into other business processes such as customer journey design. This could include measuring customer emotional responses to acts of above-and-beyond service experiences in retail banking, in order to qualify the potential benefits of investing in this area. Neuromarketing is no silver bullet, however, and must be combined with other capabilities including ‘big data’ clickstream analysis, skilled researchers selecting the right questions to yield accurate and useful insights, and the intuition of the experienced marketer using his or her instincts and industry knowledge. All must be employed in 2015 in order to create and fine-tune the world’s most loved and most effective products, services and marketing campaigns.

Footnotes 1. Neuromarketing also includes other research tools, such as EEGs, galvanic skin and respiratory measurement similar to those used in lie detectors. 2. Normally, to obtain a statically significant result from a poll or focus group, one would need to survey hundreds or thousands of people. fMRI seems to require few subjects to return statistically significant results. 3. Neural Correlates of Behaviour Preference for Culturally Familiar drinks, Science Direct, 14 October 2014 4. fMRI: “The Wonder Machine”? Common questions and Misconceptions about fMRI Research, Psychology in action, 9 November 2011

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4. Case studies Case study 1: PepsiCo product launch test PepsiCo used large-scale online implicit response testing to create a roadmap for the extension of its Doritos snack brand. It’s an example of neuro techniques being used ‘upstream’. Campaign details: •

The size of PepsiCo’s market share makes innovation without cannibalisation difficult, so a range of innovations have been required which avoid this problem whilst respecting brand essence.

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Implicit response testing was used to assess the business opportunity and brand fit of 28 potential brand extension ideas, with an online sample and the users’ device of choice.

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This method revealed an unexpected leader – Doritos Loaded, a hot appetiser for 7-Eleven stores – which was launched successfully, generating ROI well over that previously expected.

Read the full case study Source: Admap, September 2014

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Case study 2: American Express copy-testing American Express used brain imaging to analyse second by second responses to adverts and optimised copy accordingly. It used a neuromarketing technique – Steady State Topography (SST) to optimise advertising creative. Campaign details: •

Steady State Topography is a brain imaging technique that allows researchers to analyse second-by-second responses to ads, allowing the impact of small adjustments to be quantified.

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In this study, Amex wanted to understand what was being stored in long-term memory and if this coincided with branding.

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Findings were used to replace an in-market ad with a version that adjusted the branding, leading to an improvement in recall.

Read the full case study Source: Admap, September 2014

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5. Find out more The following articles on Warc expand upon the arguments in this chapter: 1.

The application of neuroscience in marketing Thom Noble, Admap, September 2014

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Neuroscience in practice: The definitive guide for marketers Thom Noble, Admap, March 2013

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Applied neuroscience: From novelty to must-use Horst Stipp, Admap, September 2014

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Facing the future of ad research at Unilever Catriona Ferris and Graham Page, Warc Exclusive, Next Generation Research, January 2014

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How neuroscience helped The Shelter Pets Project improve its TV ads Stephen Whiteside, Warc Exclusive, August 2014

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Applied neuroscience: De Hypotheker – Pretest using fMRI Leslie Hogeveen and Martin de Munnik, Admap, September 2014

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Applied neuroscience: MTV – Capture viewers’ subconscious responses Helen Rose and Professor Gemma Calvert, Admap, September 2014

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Beyond brand tracking: Coca-Cola and the 2014 World Cup Gabriel Aleixo and Flavio Marcondes, ESOMAR Latin America, Buenos Aires, April 2014

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Happy shoppers: The role of shopper emotion in Indonesian convenience store shopping Alastair Gordon, Dwinarizki Setyorini, Mamik Leonardo and Farquhar Stirling, ESOMAR Asia Pacific, May 2014

10. Warc Webinar: How to make the most of neuro techniques Thom Noble, Sanna van Geldermalsen, Aaron Reid and Michael E Smith, Warc Webinar, September 2014

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About Warc’s Toolkit 2015 report Warc’s Toolkit report explores six key trends that will be integral to marketers’ thinking in 2015. Using the latest ideas, research, data and case studies, sourced from warc.com, this guide will help you: Get an overview of the latest trends in strategy, consumers, shopper, social, programmatic and neuromarketing; Find up-to-date thinking, data, research and insights in these six areas; See how major brands such as Pepsi and Kellogg have responded effectively to the challenges they face; Find practical tips to improve the effectiveness of your work within these six core areas.

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