AD200910715625959AR
AD200910715625959AR
AD200910715625959AR
AD200910715625959AR

Tapping into what you want


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What if marketers could read shoppers' minds? Not psychically, intuitively or even figuratively, but physically, on a computer screen or printed report? The possibility has enticed advertising executives for generations, but only in the past few years have companies emerged claiming to offer such a view by using the latest brain scanning technology for a new field of research called neuromarketing.

Though still a fledgling industry, it seems to be getting a boost from the economic downturn. This week, NeuroFocus, a Berkeley, California, neuromarketing firm in which the Nielsen Company bought a stake in last year, announced the purchase of the British neuromarketing company Neuroco. In the months just before that, Buyology, a book by Martin Lindstrom, explaining neuromarketing to general audiences, hit the best-seller lists of The New York Times and The Wall Street Journal. Lindstrom, a marketing consultant who works with the top executives of companies such as McDonald's, Procter & Gamble and GlaxoSmithKline, said neuromarketing becomes more attractive when economic conditions place greater pressure on brands to get their marketing messages right.

"I work with some of the largest brands in the world, and nine out of 10 of the largest brands in the world are using neuromarketing," he said. "And this is just the beginning we are seeing right now. The financial downturn is fuelling this even further. Over the next 10 years, this is going to be one of the top fields for research." In 2004, Lindstrom teamed up with a group of neuroscientists to conduct a three-year, US$7 million (Dh25.7m) study funded by eight multinational corporations that scanned the brains of some 2,000 volunteers as they responded to branding images, safety warnings and other media messages.

The study employed two types of brain-scanning devices normally used for diagnosing illnesses; the functional magnetic resonance imaging (fMRI), which measures the amount of oxygenated blood going to a certain area of the brain; and a type of electroencephalograph known as the SST, or steady state typography, which tracks rapid brain waves in real time. The scans revealed brain activity that often directly contradicted what subjects said they felt about certain messages, such as whether they preferred Coke over Pepsi. In the process, they turned many long-held beliefs about advertising - from mantras such as "sex sells" to the notion that product placement in films works - on their heads.

In one example, study subjects were placed in an fMRI and shown pictures of the warnings on cigarette packs, ranging from simple text warning signs to photographs of black lungs. The part of their brains that was stimulated was the nucleus accumbens, or so-called "craving spot", since these images were often associated with the moments before the subjects lit up a cigarette. In written surveys, the subjects claimed the signs curbed their desire to smoke, but in actuality their brains betrayed them.

"In short, the fMRI results showed the cigarette warning labels not only failed to deter smoking, but by activating the nucleus accumbens, it appeared they actually encouraged smokers to light up," Lindstrom wrote. Although the term neuromarketing was coined in 2002 by Professor Ale Smidts, now a professor of market research at the Rotterdam School of Management and scientific director of the Erasmus Research Institute of Management, it was not until two years later, when the Baylor College of Medicine in Houston, Texas, hosted the first conference on the topic, that it made waves in the scientific community. The most famous finding was by one of the college's professors, Read Montague, who conducted blind taste tests of Coca-Cola and Pepsi while its subjects were hooked up to brain fMRI machines. When the subjects did not know what they were drinking, their brains showed they preferred Pepsi, since the section of the brain associated with reward would show activity. When the subjects did know what they were drinking, however, areas associated with memory and emotion showed activity - and they tended to say they preferred Coke. The conclusion was that consumers chose Coke based on its brand, not its flavour.

Not long afterward, however, a backlash began. In 2005, Nature Neuroscience, a prominent scientific magazine, published an editorial calling neuromarketing "little more than a new fad, exploited by scientists and marketing consultants to blind corporate clients with science". Today, there is increasing enthusiasm for and investment in neuromarketing, as well as a healthy dose of scepticism. Roger Dooley, the author of the Neuromarketing blog, points out that "no true neuromarketing studies have been published in peer-reviewed journals or otherwise validated".

However, he noted there was a great deal of ongoing academic research in "neuroeconomics", as he called it, including work in predicting purchasing behaviour and evaluating the impact of price on buying decisions. Companies are willing to shell out for neuromarketing consultants and studies even without broad consensus in the scientific community because neuromarketing offers marketers something they have not been able to get before, he says.

"Traditional market research tools like questionnaires and focus groups are not very good at uncovering customer motivations and answering questions such as, "Why do you prefer Coca Cola?'" he said. "Neuromarketing techniques can illuminate brain activity outside our consciousness and help answer some of those elusive 'why' questions." Dr David Lewis, a neuropsychologist and the director of research at Mindlab International at the University of Sussex, has studied neuromarketing techniques for years, but is wary of the sudden rush of media attention.

Playing on the old scientific quip that there is "speculation, speculation squared - and cosmology", in reference to the impossibility of knowing the origins and fate of the universe, Dr Lewis said of his own profession, "There is "speculation, speculation squared - and neuroscience". "An awful lot of it is, I think, commercial hype," he said. "People have jumped on to a bandwagon, and they have seen it as a way to spend an awful large amount of money from companies desperate to know how to market their projects."

But that is not to say that he does not consider neuromarketing a rich field for research. In his mind, however, all neuromarketing studies are not created equal. He is critical of the fMRI technology, which is good at showing activity in one area of the brain versus another, but not good at tracking precisely when this happened. "FMRI is like taking a snapshot and having it developed," he said "In terms of time, it is not accurate."

He also believes it has limited commercial application since the machines are so expensive and so uncomfortable to operate. Instead, he is more interested in QEEG technology, a digital version of the old electroencephalography (EEG) technology that records electrical activity along the scalp produced by the firing of neurons within the brain. Others must be interested, too, since his QEEG market research company, Neuroco, was recently purchased by NeuroFocus.

"EEG has got quite a long history behind it, but the commercial interest in EEG is very, very new," he said. "When I started working in the late 70s, there was absolutely no commercial interest at all. Just recently in the last five or six years, it's suddenly become a bandwagon on which everyone wants to jump." Dr Lewis believes this trend is likely to continue, downturn or not. "We are very much seduced by the idea of being able to read minds," he said.

khagey@thenational.ae Martin Lindstrom will be presenting his Buy-ology Symposium, Live & In Person in Dubai on April 19 at the Westin Hotel; tel: 04 509 6774, or visit www.globalleadersevents.com/lindstrom for details.

Where to buy art books in the UAE

There are a number of speciality art bookshops in the UAE.

In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show. 

In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.

In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.

The specs

Engine: 3.8-litre twin-turbo flat-six

Power: 650hp at 6,750rpm

Torque: 800Nm from 2,500-4,000rpm

Transmission: 8-speed dual-clutch auto

Fuel consumption: 11.12L/100km

Price: From Dh796,600

On sale: now

Sanju

Produced: Vidhu Vinod Chopra, Rajkumar Hirani

Director: Rajkumar Hirani

Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani

Rating: 3.5 stars

BMW M5 specs

Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor

Power: 727hp

Torque: 1,000Nm

Transmission: 8-speed auto

Fuel consumption: 10.6L/100km

On sale: Now

Price: From Dh650,000

If you go

The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at. 
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.   

England Test squad

Joe Root (captain), Moeen Ali, James Anderson, Jonny Bairstow (wicketkeeper), Stuart Broad, Jos Buttler, Alastair Cook, Sam Curran, Keaton Jennings, Dawid Malan, Jamie Porter, Adil Rashid, Ben Stokes.

Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

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Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term). 

• On the protection component, there is a cap  of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated. 

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.

How to help

Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law