This is a followup to the LIG Hangout - The Psychology and Economics of Advertising.
The hangout touches briefly on Neuromarketing and I'd like to expand on that a little here.
Let's look at Consumer Neuroscience a little first...
Advertising and EmotionStudies of emotion are crucial to advertising research as it has been shown that emotion plays a significant role in ad memorization. Classically in advertising research, the theory has been that emotion and ratio are represented in different regions of the brain, but neuroscience may be able to disprove this theory by showing that the ventromedial prefrontal cortex and the striatum play a role in bilateral emotion processing.
Consumer Neuroscience Explains Brand LoyaltyIn a study of fMRI scans of loyal and less loyal customers it was found that in the case of loyal customers the presence of a particular brand serves as a reward during choice tasks, but less loyal customers do not exhibit the same reward pathway. It was also found that loyal customers had greater activation in the brain areas concerned with emotion and memory retrieval suggesting that loyal customers develop an affective bond with a particular brand, which serves as the primary motivation for repeat purchases.
How Branding Affects ConsumersBrands serve to connect consumers to the products they are purchasing either by establishing an emotional connection or by creating a particular image. It has been shown that when consumers are forced to choose an item from a group in which a familiar brand is present the choice is much easier than when consumers are forced to choose from a group of entirely unfamiliar brands. One MRI study found that there was significantly increased activation in the brain reward centers including the orbitofrontal cortex, the ventral striatum and the anterior cingulate when consumers were looking at sports cars as compared to sedans (presumably because the status symbol associated with sports cars is rewarding in some way). Many corporations have conducted similar MRI studies to investigate the effect of their brand on consumers including Delta Air Lines, General Motors, Home Depot, Hallmark, and Motorola but the results have not been made public.
A study by McClure et al. investigated the difference in branding between Coca-Cola and Pepsi. The study found that when the two drinks were tasted blind there was no difference in consumer preference between the brands. Both drinks produced equal activation in the ventromedial prefrontal cortex, which is thought to be activated because the taste is rewarding. When the subjects were informed of the brand names the consumers preferred Coke, and only Coke activated the ventromedial prefrontal cortex, suggesting that drinking the Coke brand is rewarding beyond simply the taste itself. More subjects preferred Coke when they knew it was Coke than when the taste testing was anonymous, which demonstrates the power of branding to influence consumer behavior. There was also significant activation in the hippocampus and dorsolateral prefrontal cortex when subjects knew they were drinking Coke. These brain structures are known to play a role in memory and recollection, which indicates they are helping the subjects to connect their present drinking experience to previous brand associations. The study proposes that there are two separate processes contributing to consumer decision making: the ventromedial prefrontal cortex responds to sensory inputs and the hippocampus and dorsolateral prefrontal cortex recall previous associations to cultural information. According to the results of this study, the Coke brand has much more firmly established itself as a rewarding experience.
I know I'm throwing a lot of information at you, but it is worth the read. This shows how advertising influences people on a physical and emotional level - it's not just about promoting a brand - it's about creating an emotional draw for the viewer. Take the Coke experiment in the last paragraph: people didn't even know the difference between the taste of Coke and Pepsi when they didn't know beforehand which was which, but as soon as they knew there was suddenly a difference of taste. If this isn't proof enough of the true influence of advertising then I don't know what is.
A common argument is that people are smart enough to know what's true and what's not when it comes to adverts. That is valid only in so far as people are aware of the extent to which adverts are influencing their decision making. When a customer experiences a positive reward beyond the enjoyment of the product, such as a Coke, then it is safe to say that it's not just about the product, there is more going on. It's not like people walking around thinking "oh yeah, I totally enjoy Coke more than Pepsi because I have developed an emotional attachment to Coke so that when I drink it I feel joy as well as enjoyment". When you buy and use something you like, all you are aware of is the positive feeling - there are very few people who stop to question where that feeling comes from.
Neuromarketing exploits that tendency we have to not question things. It uses our assumptions and heuristics to develop ways to make advertising more effective - and by "more effective" I mean more people buy the products which these days only really benefits one party: The seller. How does neuromarketing benefit our society? It doesn't. It only benefits the advertisers, the psychologists and the companies involved.