2 Minute CMO Guide to Neuromarketing
What is this?
Ideally, you can consume this post in 2-5 minutes. The goal is that once you finish reading, you have a founding understanding of neuromarketing. The definitions are high level, the examples & details are simple and kept to a minimum.
The hope is that you get the basics and become interested enough to read more.
What is neuromarketing?
Neuromarketing uses neuro & cognitive science research techniques and insights to improve marketing and product design by discovering deeper & more complete reasons for a customer's behavior.
You can divide neuromarketing into two activities: NeuroResearch & NeuroTheory.
What’s NeuroResearch?
NeuroResearch involves engaging in cognitive & neuroscience research, for example, measuring brainwaves to improve a video.
What's NeuroTheory?
NeuroTheory uses general neuroscience & cognitive theories (not specific to any one target market) that describe how to motivate behavior to intentionally restructuring your marketing (usually ads or UX).
In this quick guide, I use the term: "neuromarketing" as a catch-all. In practice, you or your consultant would customize the research or theory to your application.
How is it different from traditional market research?
Traditional marketing research relies on:
Responses from customers which are often inaccurate or incomplete.
Behavioral data analysis (aka "big data"), which is good at developing associations, but bad at explaining "why" a behavior is taking place.
What can it provide my team?
Validation
For an existing product or piece of ad creative, neuromarketing can increase the accuracy of your team's go/no-go decisions.
Ideation
For campaigns, ads, or products that you have not yet developed or haven't made it passed validation, neuromarketing can provide direction on ad content, campaign elements, or product features.
Why now?
Research technology has come down in cost. (For example, an EEG cap has gone from $75,000 to <$1,000)
Data analysis technology and expertise have come down in cost while becoming increasingly available.
What organizations is this right for?
Most.
While neuromarketing has become more accessible, it still requires expertise, the purchase of new technology, and time and therefore only makes sense for high stakes marketing and product decisions.
Yes...
for a TV commercial or movie trailer. Why? The cost of failure is high, and the value of even a small improvement is substantial.
No...
for banner ads or tweets. Why? Even if a banner ad fails, the cost of switching to another version is negligible.
HOWEVER…
neuromarketing may help you discover key insights that improve your overall twitter program.
What situations is this right for?
Neuromarketing is broadly applicable. For example, it can help:
Sell your existing products to existing customers
Sell your existing product to new customers
Sell new products to your existing customers
Sell a new product to new customers
What does it give me that I can't get in other ways?
More accurate go/no-go decisions.
Deep insights into your customer's motivations
Causal explanations for your data ("Whys")
How does it increase ROI?
Increased prices.
Neuromarketing can help you highlight your existing customers' undiscovered needs that help generate value-adding services and product ideas.
How does it increase sales?
Increased conversion rates.
Via ideation, neuromarketing can help your team develop better yet unexpected creative ideas that increase conversion rates.
How does it reduce costs?
Reduced Waste.
Via validation, neuromarketing can help you release fewer dud campaigns, ads, and product features, reducing wasted budget.
How much?
$400 - +$60,000
Neuromarketing costs run from $400 for an inexpensive, low fidelity EEG headset or facial coding software to several million for a full lab and neuromarketing department (see the iMotions-GSK video below). If you hire a consulting firm, individual studies run from $5,000 on the very low end to $60,000.
How long will it take to implement
Weeks to Months.
If you build a neuromarketing lab from scratch, it will take several months to get it up and running. If you hire someone in-house, they will take less time to generate insights, but you are still looking at months. If you bring on a neuromarketing agency, depending on the clarity of your team's request, you could be bringing in results within 1-2 weeks.
Will this distraction my people?
Depends.
If you are building a lab, at least some of your people will be heavily involved. This effort will also need to include IT and Facilities people. If you are hiring an agency, only the point of contact needs to be involved.
How will it give me an unfair advantage?
Insight-to-Relationship.
Neuromarketing gives you the ability to understand your customers at a level no other marketing technique can. This understanding can help you highlight new ways to develop and enhance your customer relationships. These deeper relationships can block competition and reduce the effort required to sell.
Give me examples…
Expensive Product Launch Video.
You've created a costly product launch video. Neuromarketing can evaluate this video and highlight areas to improve click-intent. This increase in click-intent means more people will watch the video, thereby increasing launch-day sales.
Enter a new market with your existing product.
You want to enter a new market with your existing product. Neuromarketing can understand how to best position, promote, and describe your product to maximize adoption.
Give me three examples of who's using it?
Glaxo Smith Kline - [Video]
Toyota
Google
How does it work?
NeuroResearch works by measuring one or more body processes that we as humans can't easily control. For example, you can't easily change how your brainwaves respond to what you see or think. Since you can't easily change these responses, the results tend to better represent a subject's true beliefs and intent.
By itself, this data is useless. The "art" of neuromarketing is developing creative research projects that leverage that data to uncover valuable insights.
NeuroTheory works by aggregating existing academic research and generalizing it so marketers can apply it within a business context. For example, in studies, the color red is the color that most easily attracts attention. Therefore if you want to draw attention to your buy button, use red. (Obviously, what you should do is more complex, this is just an example.)
Should this replace my existing marketing research?
No.
Neuromarketing can augment your existing marketing research program. It does this in two ways:
Producing additional research that can supplement your current work with new knowledge.
Increasing the validity of your existing research with biometric data.
For example, you might monitor the brainwaves of your focus group as they watch your television spot. This additional data will let you know during which segments their attention is peaking and waning.
How can my team get started?
If you are open to exploring neuromarketing more, there are several things you can do.
Read - Subscribe to our newsletter. We will continue to put out short guides like this and more detailed posts.
Read More - Consumer Neuroscience (The MIT Press) by Moran Cerf & Manuel Garcia-Garcia
Demos - iMotions (https://imotions.com/) and NeuroLynQ (NeuroLynQ.com) can give you quick demos that will give you a better understanding of what's possible.
Consultancy - The power of neuromarketing requires significant tech but even more significant experience. Almost anyone can claim to do neuromarketing, but only neuro and cognitive scientists can do it effectively. Of course, scientists don't have marketing & product experience, so a good consultancy will have marketing strategists who understand your needs and your business's priorities.
For these reasons, before you engage an agency, it is essential to evaluate them rigorously. We will cover selecting a neuromarketing agency in another post.