Neuromarketing Lectures Notes + practice exam questions (RSM elective)
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Course
Neuromarketing
Institution
Erasmus Universiteit Rotterdam (EUR)
A comprehensive overview of all the lecture notes of RSM's elective Neuromarketing. With these lecture notes I scored a 9.8 on the exam! At the end of the document there are also some practice exam questions.
Brief intro to RSM’s research at the Erasmus Center for Neuroeconomics
Example 1 – Why are celebrity endorsements e7ective?
Brain mechanisms of persuasion:
- How “fame” and “expert power” modulate memory and attitudes (see: Klucharev, Smidts et
al. (SCAN, 2008) & Stallen, Smidts et al. (j of Econ Psych, 2010))
à more on this in the class about advertising.
Example 2 – Conforming to your peer group: why is it so di7icult to be di7erent?
See:
- Klucharev, Smidts et al., Neuron 2009 – fMRI study
- Klucharev, Smidts et al., J of Neuroscience 2011 – application of TMS
- Stallen, Smidts et al., The herding hormon, Psych Science 2012 – oxytocin administration
- Stallen, Smidts et al., Frontiers in Human Neuroscience 2013 – fMRI
*Oxytocin also known as the bonding hormone important for creating connections/bonds between
people
- For example: when women give birth to a baby à the body creates this hormone for
attachment to the baby. Or when having sex men and women release this hormone.
- Oxytocin stimulates conformity
Two kinds of social norms
Types of social norms that come up when behaving in groups:
- Injunctive norm: perception of common (dis)approval of a particular kind of behavior.
o What you should do (otherwise you get punished), e.g. drink and drive à get a fine
- Descriptive norm: particular behavior that is most common in a given situation.
o What people actually do, e.g. go to a party and the norm is to dress up à you know
the norm, but what do people actually do; conform or not conform to that norm?
What is driving social conformity?
The hypothesis: A deviation from group behavior (i.e., a conflict with group norms) evokes neural
activity similar to Error Related Activity in reinforcement learning.
- Reinforcement learning = learning mechanism to learn from our
mistakes.
For example, when performing a behavior such as throwing a
ball. If it hits the net, it creates an error, resulting in generating an
error signal and you modify current connectivity.
If the ball goes over the net, you maintain current connectivity.
- So, the brain learns how to update.
In the brain this is a fundamental system called dopamine.
Dopamine response = reward occurred – reward predicted
- Prediction error: the discrepancy between an actually received reward and its prediction.
- Learning is proportional to the size of the prediction error (strength of the dopamine
response).
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, o So, in the case of the above example: when the ball hits the net, you get a big
dopamine response because your prediction is that is goes over. From these
prediction errors you learn how to play the ball in the correct way.
- Your brain is a “prediction machine”.
- Nucleus accumbens is a very important
reward area.
- Hippocampus is for memory
- Amygdala important area for emotions
How to measure social conformity in the MRI scanner?
fMRI: BOLD-signal (blood oxygen level dependent) 1990
- It measures tiny changes in blood to see where the most activity is taken place in the brain.
- So, when performing a certain activity, more blood is going to a certain area in the brain and
that’s how you know which part of the brain is important for that activity.
*fMRI vs MRI à same scanner, but with a structural MRI you only get info about the structure
and with functional you get information about the activity.
For social conformity need other people but in a scanner you’re alone, So, to manipulate social
conformity:
- In the scanner is a screen, so a photo was shown,
and participants had to rate the attractiveness of
that person.
- Next, they got to see the group rating + face: there
was either a conflict (positive), conflict (negative) or
no conflict (group agrees with you).
- After scanner, got a break and they were told that
there was some technical issues; their brain activity
was registered but their ratings were not. So, they
had to fill in their rating again, just outside the
scanner.
Behavioral ehect:
What you see is, when there was a
- Negative conflict, i.e. person A who rated the face initially higher
than the group who was more negative, A also changed their answer
to more negative.
- No conflict, no significant changes in the ratings.
- Positive conflict, then they gave a higher rating than their first rating.
So, people changed their ratings towards the direction of their error!
Brain areas driving conformity
From the scanner could see 2 brain areas driving conformity:
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, - Error area, error signal if deviating from the group (in rostral
cingulate zone, RCZ): “Oops, I’m wrong”
o This is an automatic process done by the brain, you
cannot suppress it, so you always get an error in case
of discrepancy.
- Nucleus accumbens has a negative ehect; deviating from
group is experienced as a punishment
o You’re wrong, so you made an error and that doesn’t
make you feel good. Belonging to the group is a
strong signal of reward, so if you have conflict it feels
like the opposite.
So, you automatically change your opinion based on the overall opinion, that’s part of the
reinforcement learning
So, if there is a diherence between you and your peers and you find your peers very important then
you get an error response, so it’s dihicult to control this error signal.
How do you come to these 2 areas of the brain?
- Sometimes researchers have an idea based on previous research or from similar fields. Like
with rats and monkeys also tested that RCZ has to do with learning.
- But in this case what they did is look at the whole brain and look at where is the area with
most activity when the task was being performed and it turns out these 2 areas “lit up”.
Transcranial Magnetic Stimulation - TMS
In fMRI can test correlation but is that also really causal?
With TMS can test the causal role of (in this case) the RCZ in
social conformity. Nucleus
accumbens
With TMS can shut down a certain area for 30 minutes;
neurons in that area are disturbed and not working well.
TMS is limited to the surface of your scalp so, nucleus
accumbens cannot be reached (is too far)
Using this technique, what was found:
- Temporarily shutting down the error generating area by TMS reduces conforming behavior
(see Klucharev, Smidts et al, J of Neuroscience, 2011).
o Because the RCZ is being shut down, your brain does not produce error signals, so
no reason to change your opinion. You see the diherence in ratings, but your brains
doesn’t register the diherence, so you conform less.
Example 3: Brain responses to movie-trailers predict individual preferences for movies
and their population-wide commercial success
Study conducted on participants in the Netherlands who saw a movie trailer and they found a
correlation with the box ohice in American cinemas.
- See Maarten Boksem & Ale Smidts Journal of Marketing Research, 2015
- More on this in the class on Neuroforecasting.
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, Introduction into Neuromarketing
History of neuromarketing – the early days
Neuroeconomics (or decision neuroscience) is integrating knowledge from neuroscience,
psychology and economics into one unifying theory explaining human choice behavior.
- Neuromarketing is part of neuroeconomics
Goal: measuring brain processes to better understand and predict economic choices (decision
making by consumers, managers, investors, policy makers, …)
For long time, the fields economics and psychology were seen as two separate
things. It was behavioral economics that combines these two fields.
Later got social and ahective neuroscience etc.
Growth of interest in applying neuroscience to marketing
In 2002 the very first neuromarketing company, which was a collab between a university and a
commercial firm.
1.5 years later in 2003, the institute was shut down due to protest from consumer protection
groups.
- Neuromarketing was back then seen in a negative light; marketing as manipulating
consumers to make them buy stuh. And now they are using your brain activity to see the
true drivers of your behavior, that was a scary idea. So, lot of people were against it.
Consequence: starting to use a neutral name: consumer neuroscience rather than neuromarketing.
- Neuroscience is the academic study to understand how the brain works.
- Neuromarketing is the application of neuroscience in practice.
In 2004 a surge in # of hits on neuromarketing due to the Coke/Pepsi challenge in the scanner.
- The first neuromarketing study: The Pepsi challenge in the scanner
*Background of this study: The Pepsi Challenge is that Pepsi asked people to do a blind
taste test between Coke and Pepsi (so cups blindly filled with either Coke or Pepsi). Results
of this show that people picked Pepsi over Coke, while when people know which drink
they’re drinken they claim to prefer Coke. So how come? Researchers did a research on this
in fMRI (see McClure et al., Neuron 2004).
- Before going into the scanner: blind taste test
o Task: 15 times comparing two unmarked cups of cola containing Coke and Pepsi
o Results show that there is no link between stated preference for Coke or Pepsi and
actual preference. So, brand preference is independent of taste.
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