Wednesday, November 30, 2011

Advertising as a Singles Bar



   Clemens' article is long and complicated. So, his summary of the main points at the end is useful.


  • People don’t trust ads There is a vast literature to support this. Is it all wrong?
  • People don’t want ads.  Again, there is a vast literature to support this.  Think about your own behavior, you own channel surfing and fast forwarding and the timing of when you leave the TV to get a snack. Is it during the content or the commercials?
  •  People don’t need ads.  There is a vast amount of trusted content on the net.  Again, there is literature on this.  But think about how you form your opinion of a product, from online ads or online reviews?
  •  There is no shortage of places to put ads.  Competition among them will be brutal.  Prices will be driven lower and lower, for everyone but Google.

OK.  Is this true?


Yes


If you ask people about advertising, they will think about it and give you the obvious logical answers.


But….


Clemens is also being reductive and simplistic.
  

Let me pitch some analogies based on singles bars.   With the Consumer like a girl out for a night.


People don’t trust ads.   Obviously, ads are almost always “spun” – each has a “line” – like a guy in a singles bar.  OK, sometimes the guy is a “catch” – and sometimes he is a pickup artist with an STD.  In the beginning (if you are a girl) you just don’t know.    Why do guys use “lines” and go to singles bars.  Because they work!   Sometimes.   “Trust” is rarely determined logically – it’s an emotional thing.  So that “vast literature” about people not trusting ads is really about the “morning after” experience “commonsense” warns about.  We know we shouldn’t trust ads – but we do to some degree because  ads are designed to influence our hearts, not our heads.


People don’t want ads. Again, this is about logic, not feelings.  A girl goes to a bar. Ask her if she wants to be hit on by horny guys.  Fuck you, she replies, you think I’m slut?  But, in reality, if she goes to a bar and is totally ignored by the guys, she feels left out.   People see ads as a necessary evil.  And they also want to know what’s going on – the trends.    If you don’t know “what’s in”, then you can’t keep up with current consumer fashions – and – guess what – you feel “left out”.  There’s another thing -- good pickup lines are not “Hi, I want to fuck you” – they are funny and smart.  Good advertising works the same way – it’s entertaining. 


People don’t need ads  Again, the singles bar analogy works.  No, the girl didn’t have to go a bar at all. She could have stayed home and read a book. But then she wouldn’t meet anyone, would she?  If she goes to a crowded bar, she may be hit on by 10 or 20 guys – which she will no doubt complain about. But of these 10 or 20 guys, she may intuitively sense that one has something more. If she is interested, she can investigate.  Maybe some of her friends know the guy – she can ask them. She can check his facebook page. She can chat up the bar tender.  There are all sorts of ways.  And, if she is lucky, he turns out to be a “find’ and she buys into him.   But that wouldn’t happen without him making the initial move.  Smart girls are emotionally intelligent. Smart consumers, too.  Ads are a medium – and they are not really designed to offer real content.  Imagine if shops had no signs.  Where would you go for an aspirin when you had the need? 


 There is no shortage of places to put ads.   Quite right.  Competition means that companies need more and more places to bruit their names and products.  In subways and the outside of the cars. Ditto buses. Taxis.  Blimps…. And the Internet.  And the Internet has one huge advantage if you want to target a certain group.   You always know where to go -- the best places, of course, being where people go for actual content!  A lot of TV advertising is wasted because it simply doesn't reach its target audience or is inappropriate to it. Here, in Japan, Animal Planet is interrupted by ads for Turtle Soup, which, as an animal lover and environmentalist, I find insensitive, if not downright stupid.


More ….later….!

Tuesday, November 29, 2011

The Failure of Internet Advertising


The Internet, they say, changes everything -- including PR and advertising.  But how?   Eric Clemens argues: 

“The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed.

I'll comment in my next post.   But first read the article, taken from Techcrunch, which you should visit.

http://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/

Why Advertising Is Failing On The Internet
Eric Clemons
Sunday, March 22nd, 2009


Editor’s note: The following is a guest post by Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania. In it, he argues that the Internet shatters all forms of advertising.  “The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed,” he writes. The views he expresses are his own, and we present them here to foster debate.  (Obviously, we hope there is a place for advertising on the Internet since it pays our bills). Update This post has obviously touched a nerve. Clemons responds to his critics below at the bottom of the post.

1. There Must Be Something Other Than Advertising:

The expected drop in internet advertising revenues this year was neither unpredictable nor unpredicted, nor was it caused solely by the general recession and the decline in retail sales.  Internet advertising will rapidly lose its value and its impact, for reasons that can easily be understood.  Traditional advertising simply cannot be carried over to the internet, replacing full-page ads on the back of The New York Times or 30-second spots on the Super Bowl broadcast with pop-ups, banners, click-throughs on side bars.  This might be a subject where considerable disagreement is possible, if indeed, pushed ads were still working in traditional media. Mostly they have failed. One newspaper after another is going out of business across the United States, and the ad revenues of traditional print media, even of highly respected magazines, is declining. The ultimate failure of broadcast media advertising is likewise becoming clear.

Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites.  This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him.  The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them.  Indeed, there has to be some way to create websites that do other than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising.
The idea that content has a price and net applications should find ways to earn a profit without providing free access to other people’s content gets explosive reactions; when virtual reality pioneer and tech guru Jaron Lanier suggested in a New York Times Op Ed that authors deserved to be paid for their content he actually received death threats.  But other models are possible and several suggestions for alternative forms of monetization are offered below.

2. Advertising will fail:

The internet is the most liberating of all mass media developed to date.  It is participatory, like swapping stories around a campfire or attending a renaissance fair.  It is not meant solely to push content, in one direction, to a captive audience, the way movies or traditional network television did.  It provides the greatest array of entertainment and information, on any subject, with any degree of formality, on demand.  And it is the best and the most trusted source of commercial product information on cost, selection, availability, and suitability, using community content, professional reviews and peer reviews.

My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again. To analyze this statement we need a working definition of advertising, and I proposed the following, which is as general as I could make it:

Advertising is using sponsored commercial messages to build a brand and paying to locate these messages where they will be observed by potential customers performing other activities; these messages describe a product or service, its price or fundamental attributes, where it can be found, its explicit advantages, or the implicit benefits from its use.

It is frequently argued that the advertising industry will provide sufficient innovation to replace the loss of traditional ads on traditional mass media.  Again, my basic premise rejects this, suggesting that simple commercial messages, pushed through whatever medium, in order to reach a potential customer who is in the middle of doing something else, will fail.  It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information.  We will see the information we want, when we want it, from sources that we trust more than paid advertising.  We will find out what we need to know, when we want to make a commercial transaction of any kind.  The conventional wisdom is that this is exactly what paid search helps us to do, but all too often they are nothing more than a form of misdirection, as I explain further below.  Instead, we will use information that we trust, obtained at the time that we want to see it.

Better targeting of ads using individual interests and individual behaviors will ensure that we do not bore or annoy as many people with each ad, but cannot address the trust issue. As for paid search, it is closer to other mechanisms that allow a website to sell access to potential customers. It works effectively as a revenue source for Google, of course. But it surely is not replicable for the average content website.


3. Advertising will fail for three reasons:

There are three problems with advertising in any form, whether broadcast or online:
  • Consumers do not trust advertising. Dan Ariely has demonstrated that messages attributed to a commercial source have much lower credibility and much lower impact on the perception of product quality than the same message attributed to a rating service. Forrester Research has completed studies that show that advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest.
  • Consumers do not want to view advertising. Think of watching network TV news and remember that the commercials on all the major networks are as closely synchronized as possible.  Why?  If network executives believed we all wanted to see the ads they would be staggered, so that users could channel surf to view the ads; ads are synchronized so that users cannot channel surf to avoid the ads.
  • And mostly consumers do not need advertising. My own research suggests that consumers behave as if they get much of their information about product offerings from the internet, through independent professional rating sites like dpreview.com or community content rating services like Ratebeer.com or TripAdvisor
Yes, both network executives and their ad agencies have noted that we are not watching traditional ads, and they attribute this to the fact that we have moved beyond newspapers, televised network news, and broadcast movies, to video games, iPods, and the internet.  Porting ads to a new medium will not solve the three problems noted above.  The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed.

4. Alternative models for monetization are available:

Again, my research suggests that there are three general categories for creating value that can be monetized, including selling real things, selling virtual things, and selling access. Some websites exist solely to sell real things.  Many of the best-known perform aggregation of demand, so that there will be enough customers to justify stocking and selling items for which there is only limited demand.  Amazon is merely the best-known example.  Sites like Amazon and Zappos are especially good for long tail items … where else do you go for a copy of the Green Sea of Heaven, Elizabeth T. Gray’s magnificent translation of the Ghazals of Hafiz, or for a pair of size 20 basketball shoes?  Selling real things online has been studied since the advent of interest in eCommerce and will not be discussed further here. Other websites sell virtual things.  These activities fall into three categories:
  • Selling content and information, from digital music to news and information.  Some of these sites are funded by subscriptions, like Gartner Research; some are by direct micropayments for purchases, like iTunes; and some currently attempt to fund themselves through advertising, like Business Week or The New York Times, while still searching for a more effective business model.
  •  
  • Selling experience and participation in a virtual community, including Second Life and World of Warcraft, Facebook and MySpace, Flickr and YouTube, or LinkedIn.  Not all of these have found a way to charge for participation.
  •  
  • Selling accessories for virtual communities, like completed homes and stores, furnishings, clothing, and pets in Second Life or characters and accessories that would be difficult to earn in World of Warcraft, although this behavior is generally despised by serious World of Warcraft players.
Finally, some websites create and sell access to customers.  Again, this can be divided into multiple categories.
  • Misdirection, or sending customers to web locations other than the ones for which they are searching.  This is Google’s business model. Monetization of misdirection frequently takes the form of charging companies for keywords and threatening to divert their customers to a competitor if they fail to pay adequately for keywords that the customer is likely to use in searches for the companies’ products; that is, misdirection works best when it is threatened rather than actually imposed, and when companies actually do pay the fees demanded for their keywords.  Misdirection most frequently takes the form of diverting customers to companies that they do not wish to find, simply because the customer’s preferred company underbid.  Misdirection also includes misinformation, such as telling a customer that a hotel is sold out when, indeed it is still available, if the hotel has chosen not to pay a promotional fee, and then allowing the guest to choose an alternative property.  Misdirection is, regrettably, still a popular business model on the net, although for reasons I explored in an earlier TechCrunch post on Google it seems ultimately to be unsustainable. More significantly from the perspective of this post, it is not scalable; it is not possible for every website to earn its revenue from sponsored search and ultimately at least some of them will need to find an alternative revenue model.
  • Evaluation, assessment, and validation. The opposite of sending a customer someplace other than where he wants is providing the customer enough information for him to make an informed choice on his own. Recommendations on TripAdvisor.com allow potential guests to evaluate and validate recommendations provided by Hotels.com; not surprisingly, Hotels.com originally owned TripAdvisor, and benefited greatly from it.  Since Hotels.com did not attempt to influence or censor TripAdvisor content the website was (and is) trusted and helped put recommendations from Hotels.com at a level of trust comparable to those from an experienced travel agent.  There are at present only a few other examples of website symbiosis like this, where community content on one site adds considerable value for another; consider also the relationship between the Beeryard’s list of new beers and Ratebeer.com, where clicking on the name of a newly arrived beer at the Beeryard will allow you to examine reviews on Ratebeer.com.
  •  
  • Social search. Social search is a way of tailoring search based on the user’s network of friends.  Rather than searching for any hotel in Chicago, or for any hotel that paid for the keywords “hotel” and “Chicago” I would like to be able to ask for the hotel where my friends stay when they are in Chicago.  This invades no one’s privacy, avoids the annoyance of pushing ads at me when I am not searching for something to buy, and provides more relevant results than paid search usually can deliver. There are many problems with this, including the fact that my friends may not be on Facebook or other networks yet and those that are may not post their hotel or automobile or restaurant preferences. Most seriously, while it is clear how Microsoft might benefit from this, using its Facebook connection to undercut Google sponsored search, it is not clear how Microsoft or any other firm could monetize this directly.
  •  
  • Contextual mobile ads.  At present contextual mobile ads delivered by SMS appear to offer much promise.  Imagine a hypothetical all-knowing information-based firm that (i) knows your location because you have registered to have the information from your in-phone GPS shared with your friends and (ii) knows that you like Thai restaurants because it monitors the content of your email and your online restaurant searches and (iii) knows that you are hungry because you just said so in a text message or Twitter post you sent from your phone.  What a great time for them to text you an advertisement for a nearby Thai restaurant, sent directly to your phone.  But why would you trust this?  I remember when Hotels.com used to refer me to the same hotel, albeit at different prices, when I asked for a two-star or three-star hotel close to my office; I was never sure which was more amusing, the 80% price increase for the same hotel when I was willing to splurge on a three-star for my visitor, or the fact that there were comparable hotels 20 blocks closer to my office.  I suspect that my hypothetical all-knowing firm will similarly be providing sponsored content; perhaps I will take a couple of additional seconds in order to find the restaurant I really want. This probably does not work as a form of advertising.
Of course no one knows yet, but if I had to guess, based on my meatspace experience, I would offer the following guesses for successfully monetizing the net in the future:
  • Selling Virtual Things: People will pay for superior, timely, original content and for superior online experiences.  Presently I willingly pay for the Financial Times, The Economist, and Foreign Affairs, I value the content, and, indeed, I feel I need it; I will continue to pay for them online.  Perhaps I would not be willing to pay for archive material, which I expect that I would be able to find elsewhere, but I will cheerfully pay for the newest content online.  Similarly, I willingly pay the cover change for my favorite jazz clubs in New York, and expect that I would cheerfully pay to participate in Second Life or World of Warcraft if, indeed, I had any interest in those virtual experiences.  I guess, ultimately, if we compete for status through our purchases of accessories, clothes and homes in meatspace we will probably continue to purchase virtual accessories in Second Life, though I can’t say I fully understand this yet.
  •  
  • Selling Access. Misdirection will fail totally and completely.  I use a Mac, but I have abandoned Safari for Firefox.  I have an iPhone and an iPod but I have never used the little white earbuds, preferring instead to purchase a pair of Shure E500 phones that I think sound vastly superior. Similarly, I would be equally happy to purchase a search service that worked for me, rather than accept a free one that works both against me and against the firms I patronize.  In contrast, while people will continue to value community content and social search, these will be difficult to monetize.  Finally, contextual mobile ads will, likewise be difficult to monetize.  With information easily available, I will make my own restaurant choices, irrespective of those pushed at me via SMS, especially when I know that those pushed at me have been pushed for a fee, rather than based on an impartial assessment of my preferences.  Yes, I can imagine SMS ads initially succeeding if they provide discounts, but ultimately this leads to little more than a bidding war for traffic and benefits no one other than the firm that provides the text messaging services.  I can think of a few commercial SMS services that will benefit everyone, such as letting the most loyal guests of a restaurant know when it is still possible to get a reservation if they act immediately, eliminating the inefficiency of empty tables, but the restaurant will do this itself, using its email or cell phone contact lists.  I don’t see this as advertising, or as being monetized by any intermediary. Of course, in an age before texting and email restaurants would have welcomed the all-knowing intermediary as the only mechanism available for communicating quickly with its most loyal customers. Now, restaurants have lists of their most loyal customers and can send out real time messages of interest. If the Blue Note were to text me on some night that I am in New York that it is still possible to get a table for two for Clark Terry, or Tria were to text me on a day when I was in Philadelphia that, surprisingly, there was no wait for an outdoor table right now, I’m sure I would respond to both. Of course there is no intermediary for this interaction, and this is more like direct communication than paid advertising.
The internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads.  We always knew that freedom comes at a price; perhaps the price of internet freedom and the failure of ads will be paying a fair price for the content and the experience and the recommendations that we value.

If you disagree with me, it would be helpful to think about the basic premises of the article and to refute them:
  • People don’t trust ads.  There is a vast literature to support this. Is it all wrong?
  •  
  • People don’t want ads.  Again, there is a vast literature to support this.  Think about your own behavior, you own channel surfing and fast forwarding and the timing of when you leave the TV to get a snack. Is it during the content or the commercials?
  •  
  • People don’t need ads.  There is a vast amount of trusted content on the net.  Again, there is literature on this.  But think about how you form your opinion of a product, from online ads or online reviews?
  •  
  • There is no shortage of places to put ads.  Competition among them will be brutal.  Prices will be driven lower and lower, for everyone but Google.
Or you can continue to laugh, or to attack.  That does not constitute a response, and it does not help you plan for the future.  But a few parting thoughts may help you construct stronger attacks.
  • People whose experience is different from yours may still have experience.  People whose industry contacts are different from yours may still have industry contacts.
  •  
  • I’ve been attacked and ridiculed before.  I warned the floor traders in New York about the coming of online trading back in 1989 and was fired for it. I warned traditional people-based travel agents about dropping commissions and their eventual bypass through online booking systems and was ridiculed. I warned early investors in online grocery that it would not truly succeed as a mass-market offering for at least a decade and was ridiculed again. I warned investors in specific early online business-to-business exchanges, like Covisint, that sellers would not participate.  All of these ridiculed me more politely.  But most of them still cannot afford to buy me dinner now.
  •  
  • And even if you continue ridicule my piece, there are too many other professionals noticing the same thing.  Consider the recent article in the Economist on essentially the same thing: advertising cannot fully support the net.  You cannot ridicule everything you do not like off the net.
So … those of you with commercial interests in online advertising … you can laugh at me.  You can attack me.  Or you can think about how you can protect yourselves and your companies against the changes that are going to come.

I look forward to continued informed debate.

Monday, November 28, 2011

Neuromarketing

    Brain scans tell us how individuals react to advertising.  But we must keep in mind that this a complex, expensive technology -- and, again, it is optimized for individuals, not group surveys.
    And the results involve a great deal of interpretation and extrapolation.

“In the experiments we measured the test subjects’ craving area – while they were shown packs with warnings on. Some of the subjects were indifferent to the warnings. That was one thing. But the most surprising thing was that those who actually noticed the warnings – those with most activity in the craving area – they got the most desire to smoke,” explains Gemma Calvert.
In the last three years, the number of smokers has increased by 3% worldwide – we simply smoke more. Despite the warnings and studies showing how health-damaging it is. Martin Lindstrom believes that the tobacco industry is aware that the effect of the warnings is minimal – now he wants to take up the battle with the companies.

    The brain scan tells how the brain reacts to certain stimuli on an immediate basis -- but it says nothing about longer term results -- which is important, given the irrationality of human behavior.  

    Consider:  a smoker wants to smoke but the cigarette package has a frightening graphic warning.  Logically, you would expect the smoker not to grab a cancer stick at the moment.  But human beings are not logical -- they are emotional.  Emotionally and physically, the  smoker really needs to smoke.   The urge to smoke is expressed in a vague anxiety, nervousness.  Fear makes the smoker more anxious - more nervous!  Then he or she is really going to need to smoke a lot more.  

     As a (former) smoker, I know the routine.  I would say to myself, "God smoking is bad".  And;  "Why can't I quit?"  And "It's unhealthy".  All of which made me nervous -- so I would say, "I am definitely going to quit -- this is my last cigarette".  Then I smoked two or three to calm my nerves.  

 Martin Lindstrom believes that the tobacco industry is aware that the effect of the warnings is minimal – now he wants to take up the battle with the companies.

   If the tobacco industry thought the effect of warnings were minimal, it would not be fighting them tooth and nail as they are.  The fact is that the warnings are part of public education.  "Good" propaganda if you like that makes smoking "uncool".  Cigarette packages with photos of diseased lungs create an environment, in which smoking is seen as unhealthy, unattractive, and weak.  

    Sure, smoking has increased worldwide  -- but in many the OECD countries it has fallen off hugely.  The increase is largely (I wager) among the poor and the uneducated.

Yes, a warning may cause you to reach for a cigarette.  But it may also encourage to quit -- which is a major challenge -- and not just a matter of one cigarette.  Warnings are not a magic bullet -- but they do work to some extent!

   "Neuromarketing' has its weaknesses. And its results -- like those of any kind of market research -- are too often open to the wrong interpretations.




       

Sunday, November 13, 2011

Idvertising

What does advertising really do?  Advertising and public relations have always looked to psychology for ways to influence consumers.  Now, "neuromarketing" is in the news. It relies on the notion the the brain is just a large and complex organic computer that can be programmed.

But programming has its problems.  Why is Windows 7 afflicted by basic problems that have been around since Windows 98?  Hmmmmmmmmmm....


Advertising to the brain

BY INGE KJÆRGAARD
Photo: Martin Lindstrom
Martin Lindstrom, Danish marketing guru and author behind the Buy-ology book.
Marketing is no longer “just” based on interview surveys and clever messages that engage consumers’ emotions. The brain has come into play – and the name of the game is neuromarketing.
Can warnings about death make people smoke more? Apparently. Experiments have shown that warnings on cigarette packs do not make people smoke less – they actually stimulate smokers to smoke more. This surprising discovery was published in October in a new book about a new concept in the branding world: neuromarketing, which is where science meets marketing. You measure in the brain the advertisements that work – and those that don’t. And one of the things the book deals with is smoking.
The writer of the book, which is entitled Buyology, is the international marketing guru Martin Lindstrom. The Dane, who lives in Australia and travels the world, is dealing with the interesting cocktail of science and marketing. It throws new light on how we decide what we want to buy, from food and cigarettes to mobile phones, or how we vote for political candidates, and why we do it.
Martin Lindstrom got the idea for the book and the experiments when he was working on his previous book BRANDsense.
“I realized that it is almost impossible to interview people about their relationship with their senses – we simply don’t have the vocabulary it takes to express things. Shortly thereafter I happened to read an article in Forbes where neuromarketing was written up as a cover story. That’s when I realized – this is it – I have to create Project Buyology,” says Martin Lindstrom.
Professor Gemma Calvert of Bath University in the UK has conducted some of the experiments on which the book is based. And she also sees great potential in using neurology in that way.
“I saw problems with focus groups – people affect each other – and they affect each other’s answers. Perhaps you get the answer you would like to hear – but it is not necessarily the truth. Perhaps people just say what they believe they think, or perhaps they find it unpleasant to say what they really think. If we don’t see through these things and look into the brain, we won’t find out what people really think,” she says.
SURPRISING RESULTS
For such a small area which has been examined, scanned and discussed for so many years, scientists still do not know much about the brain. But new discoveries are constantly being made – and the Buyology book is a further leap in research.
Up to now, the vast majority of marketing, advertising and branding strategies have been based on quantitative and qualitative studies. But the fact is that about 80% of our purchases are unconscious – and we actually cannot quite explain why we buy a product, even when we are specifically asked in a study. It can mean that a company pours millions into an advertising campaign that perhaps only partly works.
Over the last three years, Martin Lindstrom has made a comprehensive study using sophisticated techniques, but even a marketing guru like himself who has worked professionally with the subject for many years, was surprised by the results.
“I was surprised by the fact that subliminal advertising works even better when we’re not aware of it. I had a feeling that it worked, but that it is so powerful as I learned throughout the experiments was a shocker, I mean we’ve in fact discovered that subliminal advertising is more powerful than ordinary ads, logos, TV commercials, you name it,” he says.
When Martin Lindstrom hatched the idea for the book, he contacted Professor Gemma Calvert, who thought the experiments he had in mind were interesting.
“I have worked with marketing before – and we had some experiments that we could use for Martin Lindstrom’s book. So it was not unfamiliar to me at all. The results on the other hand were quite surprising,” says Gemma Calvert.
THE RESEARCH
Martin Lindstrom used two different techniques in the experiment – one technique using EEG, another using fMRI – two fundamentally different techniques, since one measuring brain waves while the other measures blood oxygenation.
“We combined the neuromarketing research programme with quantitative questions before and after the scanning to compare the neuro-results with the verbal results,” Gemma Calvert explains.
fMRI involves volunteers lying in a gigantic scanner wearing headsets and in one case tubes in the nose for exposure to smells. At the same time, the volunteer is looking at illustrations or watching movies on a large screen and has a finger placed on a panel to give responses. The responses are used to detect where important reactions are taking place during the test and track them in the brain maps. The other experiment involves volunteers wearing helmets – again while watching TV shows or other stimuli – all signals in both instances are recorded in giant computers and thereafter scientifically evaluated.
It might seem a bit strange that a marketing man suddenly starts thinking about high tech scanning.
“It’s kind of natural, I’ve done this for many years. My first book was about the internet. I didn’t have a clue about the internet in 1995, but I learned about it and combined this with branding and created a new discipline. The second book was about retail, same story. The third about kids – again I had little knowledge about kids, but a lot of knowledge about brands,” says Martin Lindstrom. “And now neuroscience. I tend to stay 50% within my field and stretch myself 50% into a totally new one in order to expand the field overall.”
PROBLEMATICS
But bringing neurology into the world of marketing raises another, ethical issue.
Will consumers’ minds be taken over if the advertising industry suddenly starts scanning their brains and targeting their advertisements accordingly? Is it not a slippery slope?
Martin Lindstrom believes it is an area that will develop rapidly – and that companies will make extensive use of it. And that is exactly why he has raised the issue and brought it into the public domain.
“This helps the ordinary consumer to understand what really goes on. And it helps the governments to set the regulations and laws,” says Martin Lindstrom.
But naturally it is a giant bonus to companies. It can help them to understand what really works – and what is a complete waste of money.
“Advertising as we know it needs to change. We’ve reached a level where probably 80 percent of all communication today is a waste of money, the problem is that we don’t know which 80 percent. We’ve now learned that the future of the logo is kind of fading away, we’ve learned that most of the methods now used for almost 100 years are out of the window, kind of neat to know considering that around 100 billion dollars are spent on this every year,” says Martin Lindstrom.
But he also thinks we should be careful. “There should most definitely be rules around neuromarketing and guidelines for who you can scan, how and what you can expose people to. There should also be rules for the type of products you can test, tobacco for example. It should not be allowed to be included in neuromarketing tests, in my opinion,” he says.
Gemma Calvert also thinks that the experiments Buyology is based on are important to consumer protection.
“We make people aware of the techniques companies are using. Naturally everything is open to corruption, but when companies can use scanning to affect our purchases, it is important that we find out how to counteract it,” she says.
Photo: The Buy-ology book among new releases in a New York bookstore
The Buy-ology book among new releases in a New York bookstore.
THE WARNINGS CHEAT THE EYE – AND THE BRAIN
One of the main experiments in Buyology is about smoking. Many cigarette packs carry a health warning on the bottom half of the front of the pack. ’Smoking kills’ it shouts as an appeal to the smoker to stop. Whether smoking kills or not is a completely different discussion, but the fact is – according to Martin Lindstrom’s experiments – that the warnings don’t work. They even make people smoke more.
“In the experiments we measured the test subjects’ craving area – while they were shown packs with warnings on. Some of the subjects were indifferent to the warnings. That was one thing. But the most surprising thing was that those who actually noticed the warnings – those with most activity in the craving area – they got the most desire to smoke,” explains Gemma Calvert.
In the last three years, the number of smokers has increased by 3% worldwide – we simply smoke more. Despite the warnings and studies showing how health-damaging it is. Martin Lindstrom believes that the tobacco industry is aware that the effect of the warnings is minimal – now he wants to take up the battle with the companies.
The problem with on-pack warnings is that the eye gets used to them and sees only a graphic. And to smokers, the graphic just means that in a moment when they have lit a cigarette, they will get a good feeling. The discovery has shocked the anti-tobacco industry, and Lindstrom has been hired by 11 anti-tobacco companies in the USA.
Gemma Calvert does not think that horror and fear are the way to get people to change their behaviour:
“We have to look at how we get people to change their behaviour. In the UK, there has for example been a campaign called ’Drink responsibly’. If you have a more positive approach, people listen. They don’t listen to negative things. It is a difficult balance communicating with consumers, but the scanning helps to understand it.”
It might be puzzling that the discovery is first being made now, but according to Martin Lindstrom, it is not so strange.
“Neuromarketing was invented in 2004 and science and marketing first met then. That’s four years go and we began Buyology three years ago. So I guess considering those facts it probably couldn’t have happened quicker,” he says.
Gemma Calvert has applied for funding to continue her experiments.
“The experiments for the book are some really good first attempts, but there is a lot more in this area. Now we can start to take an even more precise look at it, and at how on-pack warnings should be designed. Because we can see that it is not enough just to ask people, we must also ask the brain,” she says.
A LITTLE ABOUT LINDSTROM:
  • 38 years old.
  • Born and bred in Denmark.
  • 1982: 12 years old, he started his own advertising agency, Martinique, in Skive, Denmark.
  • Today lives in Australia but travels the world. Works as a consultant and makes presentations.
  • He runs various branding firms, which over time has had clients such as Disney, McDonald’s, Mercedes-Benz and Microsoft.