Our subconscious minds are responsible for 90% of our decision making, while our conscious minds are rooted in logic and reasoning. The subconscious mind is based on instinct and emotion. It reacts faster and stronger. This difference between what we think and what we think we think means that market research could be missing out on consumers' true desires. When you ask people why they make decisions the way they do, oftentimes they end up telling you what they think is the reason, rather than the true reason behind the decision. And marketers are losing out. Only 24% of the time that self-reported data actually correlates to in-market effectiveness. But could neuroscience help create marketing that is significantly more relevant? With our technology, there's an 86% correlation to actually predicting sales. So the delta is pretty much double. And can this technology level the playing field on whose voices are being heard? The people who do need neuromarketing to be able to tell better stories are things like climate change, looking at world hunger. Those are harder stories to tell. And to that extent, that's the work we want to do.
I am Raja Rajamannar, Chief Marketing and Communications Officer of Mastercard and a bestselling author writing about our industry's future. Marketing, as we practice today, was founded on theories and principles from more than six decades ago, long before the advent of the internet, social media or artificial intelligence. I have had a front row seat as new technologies, cultural shifts, and an explosion of data have disrupted the ways of traditional marketing. To connect with the savvy consumers of tomorrow, marketing as we know it must take a quantum leap forward. This is Quantum Marketing. Neuromarketing refers to the practice of using physiological and neural data to gain insight into consumers' decision making. Ultimately, using that data to inform a company's strategy around things like advertising creative and product development. This data can be gathered through tools like fMRI, EEG, eye tracking, and facial coding. The broader marketing industry has been slow to adopt neuromarketing techniques, whether due to cost or skepticism, but studies over the past 20 years have shown the effectiveness of certain types of neuromarketing strategies. I sat down with Pranav Yadav, the global CEO and US founder of neuromarketing company Neuro-Insight. Today, Neuro-Insight says it has tested over 25,000 ads, including Super Bowl commercials for prominent companies like Anheuser-Busch and T-Mobile. And so I was looking forward to learning more about the power of this disruptive technology. Hello, Pranav. It's an absolute pleasure and delighted to welcome you to this show. And I'm particularly excited to have you here, because you are one of those folks who is at the cutting edge of neuromarketing. And you have been doing an amazing job in our industry. So if I can just start off, explain in very simple terms, what exactly is neuromarketing?
First of all, it's a pleasure to be here. Thank you for having me. Evolutionarily, the way our brains are structured, 90% of all of the decisions that we make on a daily basis take place in the subconscious. And think of the subconscious as this invisible ghost that travels with you wherever you go. It's informed by all the experiences that you've had in your life that you may or may not remember, and yet drive you to action while you consciously pretend to live life thinking that it's only filled with conscious decisions. Given 90% of decisions are in the subconscious, they are sub meaning below your conscious awareness. By definition. So when you ask people why they make decisions the way they do, oftentimes they end up telling you what they think is the reason, rather than the true reason behind the decision. Now, there's a trillion dollars that are spent every year on new product innovation, strategy, marketing or advertising, all relying on that self-reported data, asking people questions. Only 24% of the time that self-reported data actually correlates to in-market effectiveness. Let that sink in for a second. So if you're spending $1 trillion on marketing and advertising, 750 billion of them are being wasted. Goes down the drain. Because you're actually not getting the right information to act upon. So what people see is not what they do. So how do we figure out what they will do? Neuromarketing is a world where we study the true decision making organ in the body, which is the brain, to figure out how it functions, how people are likely to make decisions based on what we see in the brain.
So what we are saying is we take marketing decisions as marketers and as businesses based on the insights that we glean.
The way we are getting these insights today is mostly by asking consumers to give a conscious response to a decision process, which is subconscious.
So in other words, we are expecting consumers to be psychologists and be able to give us very credible answers, which doesn't happen.
And whereas what you are doing is essentially getting to the subconscious level by looking at the brain and the brain's responses. And that's what neuromarketing's first big breakthrough is.
Now I'd like to get everyone's first impressions. How about you, Ramon?
Okay. You've probably seen traditional focus groups in movies and TV shows. Maybe you have even been a part of one. Basically, a company will show a product or an advertisement to a select group of people and ask them questions about what they have just seen. But Neuro-Insight's focus groups are very different. Hey guys. Hello and welcome to Neuro-Insight. Research suggests that only 24% of the time, what you say actually correlates with what you actually do. So what we're going to do today is bypass the rational conscious filters that we have and actually stick electrodes on your heads and map your brains to figure out how you truly react, subconsciously, to the content we're about to show you. They utilize a proprietary electroencephalograph, or EEG technology developed by neuroscience professor Richard Silberstein, the founder of the company. The goal is to take the guesswork out of marketing by tapping into consumers' subconscious ad preferences in different contexts. With this technology, Pranav and his team can gather huge amounts of data without asking participants a single question. Now you have this device out here. Firstly, if we can just share a little bit of how this device exactly works, is something piercing my skull or is it just touching on the top? If you can just go into a little bit of detail on this.
This is our proprietary neuromarketing device.
So first, a little bit about how the brain works. We all know it's a complicated network of neurons that fire.
Right. So over time, evolutionarily, your brain decided to specialize where it was going to have certain functions. So anytime you have a thought, a slight amount of electrical activity is actually kind of showcased and can be read from your scalp. So, there's nothing piercing your skull or anything like that. And actually works even with people with the thickest hair. And so there are these electrodes that are just touching the scalp. And what we can then do is look at the electrical activity on the surface of the scalp. People will be going through an experience. It could be a story. It could be an idea, a concept. Essentially, it's measuring the speed of the electrical activity from 20 different places within the brain and knowing which part of the brain does what, we can correlate it back to different physiological measures. So the frontal cortex, this is where personal relevance is showcased. The lateral prefrontal cortex, you see activity in this part of the brain when memories are being created. The back of the brain is where you see emotion. If you had that on a second by a second basis, what you can tell about any piece of strategy, communication or even product is whether or not subconsciously this is something that you're likely to do in the future or not.
So let me just dive in a little bit more into this. So are we saying that there is a topography of the brain and different parts of the brain do different things?
And depending on which part of the brain lights up, this device that you have created tracks that.
And therefore as a marketer, if I'm doing research using this device, I'm having a more credible response saying that, hey, this is what exactly is happening. Now you mentioned about the kind of emotions etc. Does it also check feelings? And I'll tell you what exactly I mean. Marketers used to say that purchase decisions are all based on logic and rational thinking. Right. But that myth got burst. Now we know it's a universal fact that purchase decisions are based on emotions and feelings. Now, you mentioned about emotions, is it true for feelings also?
Well, first I will even challenge that paradigm. I will challenge the paradigm that emotions are the drivers of decisions. The reason why that became a paradigm is because we actually did not have a way to measure emotions. Right. And because we didn't have a way to measure emotions, this overall concoction of this blind thing that we couldn't measure, which I am calling the subconscious, was clumped under the emotional umbrella, but now we can distinguish whether it's emotion or something else driving the decision. Emotion is a huge driver of decision making. About 65% of the time you actually have emotion correlated with decision making. But there's one factor that even trumps emotion in terms of decision making as a driver, and that is personal relevance. Personal relevance is a higher driver of decision making than emotional intensity. And marketers have known this, inherently, implicitly, for the longest time. But somehow we clumped everything under that emotional bucket. But there's another magical thing that happens in the brain that has an 86% correlation to behavior. And that's neither relevance nor emotion. And it is memory.
The traditional view of memory, even in neuroscience, is that of one like a library that you have a library of memories. And if I were to go to you and say, Raja, what were you doing on your 21st birthday? You pick up that book of that memory and you tell me exactly what happened. That is neither the role of memory. And that's not how that works. In my past 14 years of doing this, here's what I've learned in this one line. Memories are neither an active nor an accurate repository of the past. Memories are guideposts to future behavior.
Evolutionarily, you save memories to become who you want to become in the future. You selectively keep information that will inform you to make those choices, to become who you want to become. If you saw someone wear a beautiful jacket like this 20 years ago, subconsciously it was stored in you in a way that in the future, when you make that choice, you make that choice. So all of marketing and advertising is giving you information today for you to make a choice tomorrow.
If there's an ad for a brand of car, nobody expects anybody to go buy that car today.
What you hope is that you create a subconscious memory for it. And a year from now, when you have the need and the resources to buy a car, this memory pops up and you make this choice. That's memory creation. The subconscious, long term memory creation is the biggest driver of behavior. And in our work, we've seen about an 86% correlation to predicting sales.
