Editor’s Note: One of the more surprising industry trends over the past few years has been the failure of the bucket of “unconscious measurement” tools that have emerged in the marketplace to gain widespread usage, despite consistent and perhaps even pervasive media coverage. Arguably as many high profile publications from bestselling books to major articles in some of the most prominent publications in the world have been written on the topic as the two other major buzz terms: Big Data and Social Media. Just this week the Economist published a piece extolling the virtues of these approaches. Yet despite the attention, they remain niche approaches.
When I posted a sneak peek at GRIT results last week on the Neuromarketing Group on LinkedIn (a great discussion group that you should check out) it prompted Neuromarketing Guru Steve Genco to start thinking about why this lack of traction has been the case and how unconscious measurement might finally be able to achieve some level of critical mass in the wider insights world. Today’s post, and the second installment that will be published next week, is his analysis and prescription for how to fix what’s ailing the industry.
This is an important post, and falls into the “must read” category for everyone involved with the insights industry. If you are involved in the unconscious measurement supplier community, this should be your Manifesto.
By Steve Genco
Let’s face it, neuromarketing is in a bit of a funk. When I started in this field in 2006, many of us believed that within 10 years, at least 30% of all market research spending would be devoted to neuromarketing approaches (defined loosely as approaches measuring brain and body signals instead of, or along with, self-reports).
Yet, despite a clear and ongoing need for new approaches in market research, neuromarketing has so far failed to live up to those expectations. Seven years into that 10 year time window, neuromarketing remains stuck at a very low level of penetration. Using the GRIT Research Industry Trends Report as a guide, since 2010 the number of buyers who report using neuromarketing has remained steady at around 10% in almost every poll. The latest results were just released and neuromarketing’s usage is right where it’s been since 2010, 11% “in use.” More ominously, each year an additional percentage of respondents say they are considering using neuromarketing at some point in the future, but when the next survey comes in, actual usage fails to budge. In the latest poll, the “considerers” stand at 25%. Perhaps they’re just being polite.
What went wrong? I believe the key causes of neuromarketing’s failure to capture a significant share of global market research spend can be traced to a series of strategic and tactical mistakes made by neuromarketers themselves. Neuromarketing firms (not all of them, but enough to paint the whole field) have overpromised, underdelivered, and failed to provide a compelling value proposition to their customers. On the buyer side, ironically, the need for innovative approaches – especially those that go beyond self-reporting – remains as strong as ever. But neuromarketing and its kindred measurement techniques (such as facial analysis and biometric responses) continue to be the Rodney Dangerfields of emerging methods – they just don’t get any respect.
Why market research was (and still is) ripe for disruption
Taking a strategic look at the market research industry reveals a basic weakness: traditional market research products are highly interchangeable. Even the Big Four multi-billion dollar leaders (Nielsen, Kantar, Ipsos, and GfK) have little real differentiation among them, which is why big buyers swap them out for each other on a regular basis. Lack of sustainable differentiation means low switching costs for buyers and constant pricing pressure for providers, which drives down profits and provides few opportunities for breakout growth. In addition, undifferentiated, commoditized products create low barriers to new entrants, so supply tends to outpace demand. All these forces work together to produce dissatisfied customers who constantly lament the industry’s failure to innovate and satisfy their legitimate market research needs. We are all used to hearing such complaints, often in posts in this blog.
Neuromarketing and its associated fields (social psychology, behavioral economics, social neuroscience, consumer neuroscience, neuroeconomics, etc.) have brought a fundamental new insight to the market research industry by identifying a possible solution for all these problems:
The industry’s commodity products are grounded in a theory of “why consumers buy” that is out of date and unrealistic in light of new findings from the brain sciences. Its methods, products, and services need to be upgraded to incorporate these new learnings and insights.
Back in 2006, it looked like all we had to do was turn those scientific findings into a new model of consumer behavior that would yield better predictions and insights than the old models. That, in turn, would inject much needed innovation into the industry, reintroduce sustainable differentiation based on proprietary IP, shift the dynamics of competition away from commoditization, increase profit margins, improve customer satisfaction, and cause those previously dissatisfied buyers to beat a path to our doors.
Or so we thought at the time.
Four requirements of mainstream buyers that neuromarketing has failed to meet
In his classic 1991 study Crossing the Chasm (and several follow-on works), Geoffrey Moore popularized the notion of the technology adoption lifecycle, a model that helps explain, among other things, why selling new technologies to “early adopters” is different from selling to “mainstream buyers.” In a nutshell, early adopters are risk takers, willing to buy new, unproven technologies in the hope that they might provide competitive advantage, even if only temporarily. But mainstream buyers are risk-averse and require much more: complete, easy to implement solutions; credible evidence of effectiveness; integration with existing approaches; and confidence that the solutions they buy are also acceptable to their mainstream brethren.
I believe neuromarketing has stalled in the chasm between early adopters and mainstream buyers because it has failed to meet four requirements demanded by the mainstream research community.
1. The requirement of scalability
The most obvious requirement neuromarketing has failed to meet is the requirement of scalability. Large mainstream buyers point out over and over again that classic neuromarketing studies using lab-based EEG and fMRI methodologies are too labor-intensive, too slow, and too expensive to scale to meet their global research needs. So they have relegated these techniques, if they adopt them at all, to the sidelines of small-scale, “experimental,” and one-off studies. Only the largest early-adopter companies with the deepest pockets have been willing to foot the bill for intensive neuromarketing as it is sold today, and their results have not convinced their more mainstream competitors that matching investments are required to remain competitive. Until neuromarketing can meet the challenge of scalability along all three dimensions – greater standardization, faster turnaround times, and lower cost – it will remain a niche specialty nibbling at the edges of market research budgets.
2. The requirement of trustworthiness
Even if neuromarketing were faster, better, and cheaper, it would still face a major obstacle to wide-scale adoption: many potential buyers do not trust it. Here are the top two reasons why.
First, in the early days of neuromarketing, some proponents tarnished the field’s reputation by making exaggerated, unverified, and scientifically irresponsible claims. Promising to push “buy buttons” in the brain, claiming to provide irresistible appeals to the nonconscious, and hinting at an ability to read consumers’ minds, these proponents went overboard in their efforts to attract attention to the newly emerging field. Overly enthusiastic or appropriately skeptical business journalists created an echo chamber for the more outrageous claims. Mainstream buyers didn’t believe it, scientists were appalled, and consumers were frightened.
Second, instead of educating the market about the long-established scientific foundations of their new field, neuromarketers hid behind proprietary methodologies in the name of protecting confidential intellectual property. Despite their lack of traction in the marketplace, these “black box” firms failed to realize that mainstream research buyers would not make multimillion-dollar marketing or product decisions based on findings from research methodologies they did not understand intimately.
To the average mainstream research buyer, this combination of exaggeration and secrecy was a toxic brew to be avoided, not embraced.
3. The requirement of connecting to behavior and real business outcomes
Many neuromarketing firms offer promising new ways to measure consumer responses using signals from the body and brain that are grounded in solid and verifiable science. But their methods too often stop at measuring mental reactions, without connecting those reactions to subsequent choices and outcomes. Neuromarketing studies might pinpoint with great precision that attention is happening here, or emotional engagement is peaking there, but buyers are often left to figure out for themselves what it all means. What is a “good” level of each of these variables? How do these measures help us explain and predict consumers’ later choices and actions? These questions have not been answered satisfactorily for most mainstream research buyers.
Unlike many traditional research providers, neuromarketers have failed to invest in collecting and publicizing normative data that connects their measures to business-relevant outcomes. Or at least they have failed to publicize any large-sample, statistically-significant results that back up their claims to predict business outcomes better than traditional self-report measures. This is a huge negative for traditional research buyers, who buy research solutions because they can be shown to reliably improve business results, not because they are new and different.
4. The requirement of contributing to consumer insights
Finally, neuromarketing measures and metrics have failed to make a strong connection to consumer insights. Neuromarketers have not articulated how the nonconscious processes and mechanisms they measure impact consumers in ways that insights professionals can translate into actionable business recommendations. Without an understanding of how mechanisms like novelty detection, familiarity, processing fluency, and judgment heuristics can impact business outcomes, consumer insights teams are unable to connect neuromarketing findings to new and better consumer insights. As a result, they often fail to see how neuromarketing is relevant to their work, or to marketing more generally.
In Part 2 of this post, I’ll describe four strategies for meeting these requirements that can help neuromarketing get back on track as a growing and accepted segment of the market research industry.