R.K. OHME WARTO MIEĆ MARZENIA 1

What our brains buy?

Advanced Technology in Advertising

To Whisper11.02.2010

Barcelona, Spain

LAB methodology is based on the latest findings from the areas of psychology, neuroscience and economy.

LAB has pioneered a brain-waves based (EEG)copy-testing research in Europe

Recently we won funding from the European Union (the Innovative Economy Program) to lead the most advanced biometric project in the world.

Information about LAB

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Key areas of research for LAB are: TV copy-testing (biometric and traditional)Brand Image (conscious and unconscious)Purchase motives (conscious and unconscious)

We cooperate with prestigious advertising and research associations in EU and US

LAB has worked with over 100 companies, including major internationalbrands from across every market sector such as:

cosmetics, finance, telecoms, media, electronics, pharmaceutical,energy, automotive, etc.

Information about LAB

LAB biometrically testedover 4000 respondents and 1500 ads

LAB has conducted research in the USA, Australia, Poland, Germany, Russia, Spain, Romania and Guatemala. In Q12010 LAB starts biometric in Argentina, South Africaand Japan.

Who is Rafal Ohme?Rafal Ohme (PhD) is a professor of psychology, expert in persuasion and unconscious processing. In 1995-1996 he held the Fulbright Scholarship at Kellogg School of Management where he learned advertising. From1996 on he visited Department of Psychology at Stanford University, and researched unconscious processing and emotions.

He is a member of Advertising Research Foundation, American Advertising Association, European Academy of Advertising, Association of Consumer Research, NeuroPsychoEconomics as well as Association of Scientific Study on Consciousness, Society of Personality and Social Psychology, American Psychological Society, European Association of Experimental Social Psychology.

He wrote New Mind of Consumer (in press), Unconscious Affect (2007), Subliminal Facial Information (2003), and trilogy Automaticity (2001, 2003, 2003).

R&D explorations

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European Advertising Academy

ESOMAR

American Advertising Association

AdvertisingResearch Foundation

Kellogg School of ManagementVillanova Business School

University of Pittsburg

INSAED ParisCopenhagen Business School

University of Amsterdam

EU co-funded

3600 respondents (720/country)2400 ads/16 prod. categ.

each product category:150 ads (30/country)

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from January 2004 until April 2009

LAB tested

2,465 respondents and 823 ads

in BIO studies

30,165 respondents and 1,307 ads in TRA studies

US activity (since April 2009)

„You exceeded our expectations!”April, 29, 2009

- Nick HarringtonHead of P&G’s Cognitive Council

LAB is the only biometric company in the world…

that has managed to publish

its EEG method (NeuroTrace™)

in peer-reviewed

scientific journals

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2. Theoretical framework

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Principles of the Scientific Revolution in Business

• Homo aeconomicus is IRRATIONAL

• go BEYOND verbal declarations

• explore the UNCONSCIOUS

Homo sapiens is irrationalWe have received our name Homo sapiens (thinking man) a little bit in advance

Johann Huizinga (Dutch historian)

The assumption of rationality as the exclusive and sufficient basis for making consumer choices is wrong.

Homo aeconomicus is a whishfull thinking

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A. SmithAristoteles

LangerKahnemann Loftus

2002 Noble Prize

winner in Economy, Daniel Kahneman(Princeton University)

Irrationality protects us,drives discoveries and innovations

J.S. Mill

Move beyond declarations

The end of consumers Surveys? „Advertising Age” - September, 15th, 2008

„Our consumers have been sending us messages for years that they are not interested in the traditional survey process”

Kim Dedeker, V-P external capability leadership, global consumer and market knowledge, P&G

„We continue to torture consumers with boring and antiquated search methods”

Donna Goldfarb, V-P consumer and market insights, Unilever Americas

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Unconscious can be scientifically explored

UNCONSCIOUS is not about repressed sexual desires

UNCONSCIOUS is about neurophysiology, automaticity and implicit social cognition

neurophysiological analyses

automatic associations

affective iconic priming

perceptual / semantic fluency

indirect methods, e.g. experimental design

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Academic Publications on NeuroTrace applications

Ohme, R., Reykowska, D., Wiener, Choromanska, A. (2009). Analysis of neurophysiological reactions to advertising stimuli via EEG and GSR measures. Journal of Neuroscience, Psychology and Economics.

Ohme, R., Reykowska, D., Wiener, Choromanska, A. (under revision). Application of frontal EEG assymetry to advertising research: Sony Bravia case.Journal of Economical Psychology. Special Edition: Decision in Neuroscience.

The instruments

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Facial expression indicates whether ad is entertaining. EMG has been considered a powerful instrument to test voluntary (zygomaticus) and involuntary (orbicularis) facial muscle movements which respectively reflect social and genuine smile.

EEG registers variations in brain waves produced by cortex. It reflects consumers’ emotionalengagement.

EEG has excellent temporal resolution (1/1000 of a second). This enables to track down each single frame of an ad.

GSR registers variations in galvanic skin response. They are considered to reflect whether consumer got energized by the ad.

EEG electroencephalography GSR galvanic skin response EMG electromyography

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EMOTIONAL

ENGAGEMENT index[computed from EEG measures]

when high - a brand image is likely to be enhanced

ACTION DRIVE index[computed from EEG/GSR measures]

when high - a purchase oriented behavior is likely

to be enhanced

LIKING index[computed from EMG measures]

when high – an ad is considered attractive

based on genuine and social smile

NeuroTrace™ consists of 3 sets of indices:

Emotions in the brainAlmost 30 years ago, Davidson and his coleagues(Davidson, Schwarz, Saron, Bennet, Goleman, 1979) suggested a model of emotions in which they argued that emotions are:

A- organized around approach – avoidance tendency &

B- differentially lateralized in frontal area of the brain.

The left frontal area is involved in the experience of positive emotions such joy, interest and happiness –the experience of positive affect facilitates and maintains approach behaviors.

The right frontal region is involved in the experience of negative emotions such as fear, disgust, and sadness; - the experience of negative emotions facilitates and maintains withdrawal behaviors.

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(…) Research and marketplace findings over last 10-15 years have identified that the consumer’s emotional response toward the brand and / or the ad can be powerful motivator of consumption behavior (…) (Allen, Machleit, Kleine, 1992; Erevelles, 1998; Haley and Baldinger 1992; Journal of Advertising Research, 1999)

The major problem neuro research companies face

The problem

How to relate NEURO results to

CONVENTIONAL marketing

measures?

How to deal with the problem?

• Criticise the conventional research– NO

• Pretend that conventional research do not exist

– NO

• Integrate conventional research with neuro

– YES

4. Selected cases

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SONY BRAVIA „The balls” 2005 campaign

Jose Gonzales – author of the music

What is so special about this ad? Its two secret

moments that made Sony big.

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Is the ad engaging? Does the ad drive into action?EMOTIONAL ENGAGEMENT index (EEG) & ACTION DRIVE index (GSR)Is the ad entertaining? LIKING index (EMG)

A very famous ad. It has won many awards. Was created by the same ad agancy as the Cadbury Gorilla ad. It produces high EMOTIONAL ENGAGEMENT in all key strategic scenes (i.e. opening, benefit, product and brand exposures) and ACTION DRIVE in packshot scene. See next slides for more.

Two peripheral cues in the Sony BRAVIA ad

For comments read attachedSony Bravia case pdf file

more at: www.testdifferent.com

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2 3 41

The FROG – a „magical” counterpoint!It has turned out the Frog is not only charming (artistically) but alsovery instrumental (i.e. enhances positivity toward product-benefit)

1 2 3 4

2

4

1

1

3

the trigger

Retail application

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An ad can be effective even if it doesn’t entertain people

Consumers claim the ad is not interesting and is boring.

NeuroTrace™ predicts the ad will build brand image and driveconsumers to purchase. Theshelf test and actual salesconfirm these predictions.

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N=45

Is the ad entertaining? LIKING index (EMG)

This ad is not very entertaining. Actually respondents react negatively (blue colors) or neutrally(yellow colors) throughout most of the time. But, contrary to common belief, the LIKING index isnot crucial in effective advertising for most product categories (see next slide)

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N=45

Is the ad engaging? Does the ad drive into action?EMOTIONAL ENGAGEMENT index (EEG) & ACTION DRIVE index (GSR)

Crucial aspects of successful ad are: high EMOTIONALLY ENGAGEMENT (red colors) and high ACTION DRIVE in packshot scenes (purple blocks). This is a great ad – it enhances the brand and drive sales! Actually it is one of the most successful ads – sales-wise – in the history of Procter & Gamble!

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Sometimes buying less media is more

Why pay for a 60 sec commercial during prime Super Bowl time when 30 sec’s is much better?

This finding was not detected by any of the standard research methods. OnlyNeuroTrace™ did it.

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POSITIVE/NEGATIVE neuro-reactions to the PEPSI 60 ad WOMEN vs MEN

time (s)

positive reaction

emotional response average in the ad’s sequences

dynamics of emotional index recorded during the ad exposition

negative reaction

EMOTIONS

EMO

TIO

Nin

dex

11 neg

4 pos

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POSITIVE/NEGATIVE neuro-reactions to the PEPSI 30 adWOMEN vs MEN

time (s)

positive reaction

emotional response average in the ad’s sequences

dynamics of emotional index recorded during the ad exposition

negative reaction

EMOTIONS

EMO

TIO

Nin

dex

2 neg (was 11)

9 pos (was 4)

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February 2008

How georgeous George affects women and how men feel about it?

Is the ad engaging? Does the ad drive into action?EMOTIONAL ENGAGEMENT index (EEG) & ACTION index (GSR)

See enclosed motion spectrum:NESPRESSO_CLOONEY_engage_action.exe

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N=40

LAB OBSERVATIONS: The ad induces much positive emotional engagement, mainly in response to the George Clooney scenes. We do not observe positivity when the brand is presented, however, these scenes generate strong action drive.

N=40

Does gender matter?EMOTIONAL ENGAGEMENT index & ACTION DRIVE index [gender split]

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A great ad but… for women only. Men seem to envy handsome George. Poor chances they will buy the Nespresso machine.

Ad Mastering

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Conclusion: BIOMETRICS will make marketing communication:

1. MORE PRECISE

2. LESS EXPENSIVE

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New Era in Advertising

is about to begin

Other biometricapplications

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October 2008

How would the same TV ad influence viewers when aired during various TV programs?

Bio-media planning

You know it already, but now we can see how stronga context effect is!

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The same ad (from a product category X) is good for nothing during TV shows but works perfectly whenplaced during police documentaries! Moreover, this effect is also resembled by repondents purchasebehavior (see: Shelf-test results). The number of participants who decided to buy the category X product was almost doubled by the docu-dramas to compare with the „funnies”!

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How TV programs alter reactions toward the same ad

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SHELF-Test

SERIES

TV SHOW

INTERVENTION PROGRAM

R.K. OHME DAWID POKONAŁ GOLIATA 40

BIO-POLITICS

Official poll results regarding voting preference in the 2009 Nov 22nd elections, according to CCSB (Center of Sociological Research and Branding)

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18

31

35

26

16

22

36

30,2

20,1

19,2

30,5

24

21,5

19,1

35,4

0 5 10 15 20 25 30 35 40

Others or udecided

CANDIDATE 3

CANDIDATE 2

CANDIDATE 1

Voting preference trendline

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July 2009

August 2009

November 17th 2009

growth by 9 pp

November 01st 2009

July 2009

July 2009

July 2009

August 2009

August 2009

August 2009

November 01st 2009

November 01st 2009

November 01st 2009

November 17th 2009

November 17th 2009

November 17th 2009

LAB work result

Benefits of using NeuroTrace

NEURO TRACE™ can identify which A/V elements are likely to:effectively improve product benefits and brand image perception

activate purchase-related behavior irritate or disengage consumers NEURO TRACE™ objectively:

evaluates key-strategic A/V moments (e.g. What reactions are generated by the packshot and logo?

Which elements of the presented offer are the most attractive?)

reveals „creative magnifiers” imbedded in the ad

NEURO TRACE™ indicates ad effectiveness in terms of influencing different target groups.

Moreover, NEURO TRACE™ is perfect for:soundtrack and voice-over pre-testing ad mastering (e.g. how to shoe the product) it gives inspirations for visuals in print, outdoor, internet and POS communication Finally, NEURO TRACE™ gives reliable arguments for media planning: how to shorten the ad successfully? how to position the ad in the programming context?

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When we manage to fully INTEGRATE neuro pre-tests with conventional research

our ability to develop relationships with consumers

will be limited only by our imagination

Contact details:LABoratory & Co

Headquarters:1825 NE 45th Street, Suite AFort Lauderdale 33308, FL, USA

Spain & Portugal:Daniel RazniewskiCountry Development Director+34.646.018.500d.razniewski@labtd.com

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Thank you