Brain biz eyes ads

Now, Brain Fingerprinting believes it's found the ideal first business application: advertising.

The company just completed a study with global marketing firm Millward Brown indicating that its brain imaging machine tracks the same reaction in ad viewers as survey questions asking viewers for their feedback. Armed with this data that helps validate its technology, Brain Fingerprinting now says it plans to spin out an advertising company within six months. The company projects a spin-off staff of 50 to 100 people within a year and a half, and it believes revenue from ad firms ultimately can exceed $250 million.

"Advertisers want to know if someone has paid attention to an ad and can recall it," said Larry Farwell, Brain Fingerprinting chairman and chief scientist. "They want to know: Do our ads make an impact?"

Brain Fingerprinting's grand plan doesn't end with advertising. The company believes its technology has direct application to tasks as wide ranging as early detection of Alzheimer's disease, interrogation of terrorists and investigation of crimes.

Whether the tiny company can perform remains to be seen. As of today, Brain Fingerprinting has just six staff members in research quarters housed in the Seattle Post-Intelligencer building. Millward Brown's Graham Page, global director of research and development, said it may take time for brain-wave science to gain momentum in the market.

"I think everyone in the advertising industry is talking about brain-wave research, but they want to get to the point where someone else has done it first," Page said.

Bruce Lisanti, chief operating officer for Brain Fingerprinting, said the company is still in startup mode. Since moving to Seattle, Brain Fingerprinting has been conducting research aimed at buttressing its technology launch in the marketplace. New science isn't adopted immediately, Lisanti said.

"We're not trying to make money yet," Lisanti said. "We're still in the incubation stage."

But the incubation stage may end soon. In addition to the advertising company, Brain Fingerprinting plans to spin out a medical division in the next six months that will use brain-wave science to test for early Alzheimer's disease.

As with the advertising division, the vision is ambitious: Lisanti predicts the medical company will grow to more than 100 staff members and eventually generate revenue exceeding $500 million. Several pharmaceutical companies have expressed interest in using brain-wave testing to determine if their Alzheimer's drugs are effective, he said.

Two or three years down the road, Brain Fingerprinting plans to form national security and criminal justice spinoffs. The company says it has several contracts on the national security side to investigate use of brain-wave science for interrogating terrorist suspects, but Lisanti said the agreements are confidential.

In the criminal justice area, brain fingerprinting tests are used to determine whether a suspect has knowledge of a crime. Farwell said the company currently has a backlog of 400 criminal cases requesting brain-wave readings.

Brain Fingerprinting officials say the company has generated $1.25 million in revenue and raised $1.5 million from individual investors. Several venture capital groups offered larger amounts of money, Lisanti said, but the company declined the financing because it didn't want to give up control so early on.

Brain Fingerprinting began working on its advertising offering a little over a year ago because advertising executives expressed interest in alternatives to focus groups, Lisanti said. In focus groups, a moderator asks a small sample of people to evaluate an advertisement. Focus group results can be skewed if the personalities of the moderator and participants influence feedback. Also, whereas people typically see an advertisement for just a few seconds, focus groups tend to stare at an image for 10 minutes or more.

Paul Bolls, assistant professor at the Missouri School of Journalism and co-director of the psychological research on information and media effects lab, said he won't do focus groups because he doesn't believe they work. Bolls is measuring physiological responses, such as heart rate and sweat gland activity, to advertisements, and is eager to see how brain fingerprinting develops.

"I am absolutely intrigued by brain-wave measurements," Bolls said.

Though focus groups cause dissatisfaction, few in the advertising industry think they should or will go away altogether. David Bauer, president of Seattle-based marketing research group Hemispheres, said focus groups are valuable because advertisers can have an in-depth conversation with the people they want to reach. He sees brain fingerprinting as a tool to be paired with focus groups.

Brain Fingerprinting and Millward Brown conducted their study at the Tacoma Mall. After showing an entire ad to test subjects, researchers replayed spliced scenes in a random order, along with pictures the subjects had not seen, and measured brain waves. The scenes eliciting the highest brain wave response -- indicating subjects remember the segment most strongly -- were the most emotional parts of the original ad, depicting a teary interaction between a mother and child. Survey results mimicked the brain science findings.

Page said his company showed a lot of initial skepticism that brain fingerprinting would work. After seeing the test results, he believes brain wave measurements could prove attractive to Millward Brown clients, though he can't say how soon someone might adopt the practice.

"People are cautious because it's really new," Page said.

Advertising companies will likely want to see how brain wave science can enhance, and not just replicate, data from traditional surveys and focus groups. The companies would likely pay Brain Fingerprinting to run tests for a particular advertisement much in the way companies pay for a focus group to study an ad.