Vasily Klucharev about?decision-making and social influence

Vasily Klucharev: “I like to search for a solution to the mysterious phenomena of human decision-making and the role of social influence.”

In the latest edition of RSM Outlook, the article mentioned below on ‘The Brain Mechanisms of Persuasion’ honoured the magazine. It describes the latest finding of neuroimaging techniques to discover more about what goes on in the brains of consumers. Perhaps in the future, marketeers may know how to more effectively conduct advertising campaigns.

To elaborate more on this subject, Dr. Vasily Klucharev volunteered his personal opinion on the research. He holds a doctorate degree in physiology from St Petersburg State University, Russia. “Since 1995 I have studied the neuronal mechanisms of emotions in my PhD project using various neurobiological methods: from depth recording (using electrodes implanted to Parkinson patients for medical treatment), to EEG and positron-emission tomography (PET). I knew very well Antonio Damasio’s findings highlighting the role of emotions in decision-making.”

In 2006 he became one of the academic leaders of the EU-Tempus Master Programme, 'From Neuron to Cognition' in St Petersburg. Since November 2004 he has been an ERIM Postdoc Fellow, while based at the F.C. Donders Centre in Nijmegen. “ I started conducting neuroeconomics studies here in the Netherlands. The development of the new field of neuroeconomics was not surprising and even very logical to me. I found it very interesting to apply my knowledge of the neurobiology of emotions to economic decision-making. On the other hand, computational methods from economics also create the new horizons for neurobiology.”

As someone who has been working on a specific research area for such a long time, Klucharev’s passion for the subject must be great: “I like to search for a solution to the mysterious phenomena of human decision-making and the role of social influence. We quite provocatively suggest “simple” solutions for seemingly unsolved scientific problems via a reduction of very complex social and mental processes to certain types of neural activity.”

First results and developments
The subject he is working on together with Ale Smidts and Guillen Fernandez, is quite recent. “We are finalising and publishing our first results at the moment. We are now collecting data on a second persuasion study. I am most proud of the development of the paradigm to study brain mechanisms of social influence on our decisions (e.g. persuasion and conformity). We developed special tasks to study these processes using cognitive neuroscience methods. Now we are able to reliably demonstrate effects of social influence in very complicated neurobiological experiments. I think we feel more and more comfortable in modeling social aspects of decision-making using neuroscientific techniques. I hope that neuroeconomics will focus on certain aspects of human decision-making and will make a systematic attempt to model specific phenomena in detail, rather then to sporadically find correlations of neural activity to all kinds of economic and decision-making paradoxes.”

Expert Power
When someone is working on, among other things, advertisements, he or she should have an opinion about good and bad advertisements with celebrities. However, Vasily approaches his research quite differently, focusing more on expert power: “I am not in a position to make recommendations for advertising practitioners yet. Our experiments reliably demonstrate that celebrities who are perceived as experts for a product are strikingly effective. We found that a single exposure to a combination of an expert communicator and an object leads to a long-lasting change in memory for, and attitudes towards, the object. We discovered that experts affect neural activity in brain areas specialised in memory and learning, and trustful behavior. Therefore experts indeed influence the fundamental neural processes.”

The influence of expert power reaches further and into all layers, even among people who should not be influenced by such factors: “In our study we successfully demonstrated that the perceived expertise of a communicator (“expert power”) makes him or her an extremely effective persuader. I found an interesting historical anecdote illustrating the role of perceived expertise even in scientific publishing. Lord Rayleigh (winner of the Nobel Prize in Physics,1904) submitted to the British Association a paper on some paradoxes in electrodynamics. His name was accidentally omitted and the paper was rejected as a work of some ’paradoxer’ Later with his name in place it was accepted with apologies. Therefore we do know that even the success of our scientific publications is determined by ‘expert power’.”

Why celebrity sells:
The brain mechanisms of persuasion

Marketing researchers at RSM are combining the latest neuroimaging techniques to discover more about what goes on in the brains of consumers. For marketeers, this may help take the last remaining guesswork out of pricey advertising campaigns.

In 2002, Chrysler launched an advertising campaign featuring Céline Dion as its new brand ambassador. The campaign was a huge success - for Dion, not Chrysler. Dion received US$14 million dollars for her efforts (a three-year deal); Chrysler, on the other hand, saw almost no impact on sales and dropped the campaign after just one year. How could the marketeers have gone so wrong in their predictions? Perhaps they were lured by the success of previously Dion-endorsed products. Only two years earlier the singer had endorsed Japan's Aeon English College, an institute offering English tuition classes, with great results. So what decisive factors were at play in the minds of consumers that saw them buy into one campaign, but not the other? Nowadays, we may be in a position to know. RSM's Professor Ale Smidts and his colleagues are conducting research on the neural underpinnings of persuasive marketing communication. Smidts and a team that includes RSM post-doctoral fellow Vasily Klucharev, and Professor Guillén Fernández of the F.C. Donders Centre for Cognitive Neuroimaging at Radboud University Nijmegen, are combining traditional marketing research methods with a revolutionary brain-scanning technique: functional Magnetic Resonance Imaging (fMRI) that captures brain activity. Using this technique, they hope to unravel the brain mechanisms involved in persuasion and thereby the key factors that influence consumer decision-making. Their research is fundamental and pioneering, says Smidts at his RSM office. "Marketing as a science has always been very open to innovative methods and techniques from other disciplines to gain more knowledge about consumer behaviour," he says. "This research is cross-disciplinary in every sense and extremely innovative, but it is also risky because we do not know if it will lead to any useful, future applications for practitioners. But the objective is to gain new insights into why certain marketing is more effective than others."

Persuasion
In scientific literature, persuasive communication has been defined as any message intended to shape, reinforce, or change the responses of others (Miller, 1980). People are exposed daily to hundreds of messages through different communication channels like television, newspapers, magazines and social networks. So ubiquitous is the presence of persuasive communication in our lives that it plays an ever-present role in our decision-making. And yet, says Smidts, we continue to know very little about why and how something persuades. "Persuasion has been a focus of extensive psychological research but it has been nearly ignored by cognitive neuroscientists," Smidts explains, "For instance, we know that our decisions can be successfully modulated by the opinions of experts. However, the neural underpinnings of this fundamental social phenomenon have hardly been studied." In a world where billions of dollars are shelled out to celebrities on the basis of their capacity to persuade consumers - knowing when a celebrity endorsement will be effective and when it will not has widespread practical utility. Marketeers increasingly hiring celebrities to present their products and services. Twenty years ago in U.S. primetime TV commercials, only about 5% featured a celebrity presenter. Now the best recent estimate is that around 20% feature a celebrity presenter. A famous example is Tiger Woods who was paid $150 million by Nike in 2000 to endorse golf products, and going by his current form, will likely have his endorsement renewed for double that sum. Importantly, most of these celebrity ads are created with little or no explicit message - they depend entirely on the celebrity and their connection with the consumer for impact. Typical examples are Nicole Kidman's ads for Chanel perfume and Brad Pitt's for Tag Heuer watches, both of which depict only the star and the branded product. Moreover, according to recent research on the subject, only half of these advertising campaigns are effective. Counter to the recent trend in marketing campaigns, the endorsement of a celebrity per se is not effective: celebrity campaigns are as likely to fail as to succeed. But what determines when they do, and when they don't? According to the research of Smidts and his colleagues, it comes down to trust in the celebrity as an expert. In 2005, Smidts and his Australian colleague Professor John Rossiter, who holds a visiting Advertising Chair at RSM, developed the concept of an 'expertise hook'. According to the 'expertise hook' model, there is one main critical success factor involved in boosting the appeal of a new product through the inclusion of famous people: the celebrity must have an immediately perceived (by the public) 'expertise hook' for the product. Without this, the celebrity's endorsement is very likely to have no effect on sales. In the case of Céline Dion, Dion is not considered an expert for cars. Because her link with cars is tenuous, her expertise is not convincing, and she did not encourage consumers to trust her judgment of the product. However, since she sings in several languages, she invoked trust in her expertise as a language-expert, and thereby in the product she was endorsing - an English tuition college. Importantly, says Smidts, it is this link between trust in the judgement of the expert and persuasion, that is the key. More interesting still, this connection can be seen in the brain activity of consumers.

Neuromarketing
In recent years, due to technological progress and groundbreaking research in disciplines like biology, neurology and cognitive psychology, knowledge about the human brain has increased enormously. Activity in our brain can today be measured and visualised with a technique called neuroimaging. Examples of these techniques are the electroencephalography (EEG), the Magnetoencephalography (MEG), Positron Emission Tomography (PET) and the fMRI. The first two techniques reveal the electromagnetic activity of the brain. The more advanced and precise PET and fMRI measure the local blood flow and the use of oxygen in the brain, and are able to show, for example, which brain areas are activated when remembering or paying attention to something, or when making decisions. Facilitating the use of this equipment by researchers in various academic fields is the interdisciplinary Donders Centre, which provides researchers access to the latest neuroimaging equipment. In scientific literature, neuroeconomics and neuromarketing are among the names given to this area of research that combines marketing and economics with neuroimaging techniques. The discipline draws on economics, psychology, and neuroscience theory to gain a comprehensive understanding of human consumer behaviour. As a marketing academic, Smidts is curious to see how these techniques contribute to a better understanding of the brain mechanisms that deal with remembering and recognising commercials and products, and hence influence the decisions of consumers. The first concept he and his team have tested is the concept of an 'expertise hook'. To do this, Smidts, Klucharev and Fernández designed an experiment using fMRI that simulated advertising, thereby revealing the mechanisms involved in effective persuasion in terms of modulation of attitude - and memory - related neuronal activity. The experiment required 24 participating subjects - young females interested in celebrities - to be monitored for around an hour in the scanner. While being scanned, they were presented with a photograph of a celebrity (for 1 second). Several seconds later they were shown a photograph of an everyday product (also for 1 second). In total, 180 combinations of celebrity and product were shown to the subjects. Around half of these celebrities were perceived experts for the subsequent products, and the other half had no connection with the product. The expert-association between the celebrities and the products was counterbalanced - each celebrity served equally often as expert and non-expert (for example, Andre Agassi was followed with a photo of a tennis racket or by an alcoholic drink). One day later, the subjects returned to the lab and both their memory of the product and their attitude towards the product (i.e. their buying intention) were measured. As expected, experts had strong behavioural effects. The subjects revealed higher intention to buy a product when celebrities were seen as product-experts. The presence of experts also enhanced their memory of the product significantly, caused by increased activity in the hippocampus, an important brain area for memory encoding in general. Additionally, celebrities with high levels of perceived expertise evoked particularly enhanced caudate activity in addition to this higher buying intention; in other words, modulation of caudate activity could be seen to play an important role in determining the extent to which an expert induced persuasive behavioural effects. In scientific literature, the caudate nucleus is known as an old evolutionary structure involved in fundamental learning and emotional processes. Recent research has shown that caudate activity correlates with the intention to trust. The conclusion? A celebrity with high expertise induces trust of judgement, thereby convincing us of a product's inherent value.

Fundamental Research
At this point, their paper is in the scientific review process. Needless to say, however, these early results uncover some fundamental neural mechanisms underlying persuasive communication. "By and large," Smidts says, "this data suggests that persuasive experts modulate the activity in a set of brain regions involved in trusting behaviour and memory encoding that probably contribute to effective persuasion." Although scientifically enthusiastic, Smidts is down to earth about possible future applications for practitioners: "Our results suggest that marketeers should screen potential celebrities for immediately perceived expertise and strong associations of credibility and trustworthiness for the specific product," he says. "Selecting celebrities just on how well-known they are or their physical attractiveness will not suffice - it can simply waste money. However, we are in an exploratory phase. In, say, ten years, we will be in a better position to conclude if applications of these neuroim- aging techniques for marketing purposes are indeed as promising in predicting consumer behaviour as they now seem to be."

Source article: RSM Outlook, spring 2007

More Information
Website Vasily Klucharev
Website Ale Smidts
<link portal page erim research erasmus_centre_for_neuroeconomics _blank>Website Erasmus Centre for Neuroeconomics