Dive Brief:
- Nielsen Holdings closed most of its neuroscience laboratories that study the effects of media and advertising on the human brain as the coronavirus pandemic disrupts operations. The research company's Nielsen Consumer Neuroscience division — which had been the world's biggest provider of neuromarketing services — also cut its work force 80%, Forbes magazine reported in an article confirmed by Marketing Dive.
- Nielsen closed all 17 neuroscience laboratories outside the U.S. and cut the same number of neuroscientists, leaving three labs and three scientists at its domestic sites. The company kept a signal processing center in India open, but mothballed equipment at its other research centers, Forbes reported.
- Nielsen faced difficulties in safely recruiting subjects for tests that include hooking them up to electrode caps to study brain activity, as social distancing measures limited physical contact. Its neuromarketing research includes electroencephalogram (EEG), biometrics, facial coding and eye tracking studies, per its website.
Dive Insight:
Nielsen's closure of most of its neuromarketing operations marks another casualty of the pandemic, which has had a profoundly negatively effect on the travel, restaurant, hospitality and cruise industries — including marketing activity — that urge social interaction. It's not clear yet whether the Nielsen news is a harbinger of more cutbacks in the neuromarketing space.
Neuromarketing has been hailed as an important analytic tool to gain greater objective insights into how people physically react to advertising. Neuromarketing is one way marketers can gain a more thorough understanding of how ads are received by consumers, who don't always answer accurately when they are asked what they think about an ad. Nielsen's neuroscience labs have in the past tested Super Bowl ads months after the game to compare viewers emotional reactions to ad by gauging their facial responses.
Neuromarketing has shown promise in better predicting consumer behavior when combined with survey data, as Nielsen notes on its website. Nielsen is likely to resume the research efforts when its testing methods become safe, Forbes reported, which is encouraging though the uncertainties associated with the pandemic make shorter-term planning more difficult. Nielsen said in July it would lay off approximately 8% of its employees as part of a restructuring in advance of plans to split the company in two — with one segment focused on media measurement and the other on analytics and attribution. The split is now expected to happen in early 2021 after a postponement from the original November 2020 scheduled completion. In August, the company reported an 8% drop in revenue for Q2.
Nielsen isn't alone among the companies that have been forced to cut back and make tough decisions on which operations they can afford to maintain until the pandemic subsides. Ad agencies in the U.S. will cut 52,000 jobs in the next few years as the health crisis accelerates longer-term changes for the marketing industry, Forrester Research predicted this year. The shift toward digital media consumption has accelerated in the past six months, requiring companies to adapt their skill sets to meet the changing demands of the marketplace.
