Last year, I received an email I will never forget: One of the world’s tobacco giants wanted me to consult for them. It’s not that I’m a stranger to requests from the tobacco industry. In fact, ever since I published Buyology in 2008, my email address appears to be on every tobacco executive’s Rolodex. You see, among other things, the book addressed the issue of how the use of subliminal advertising in the industry was successfully getting smokers to smoke more. The fallout was spectacular, culminating in Philip Morris being forced to withdraw their $100 million sponsorship of Formula 1. After this, you would imagine the tobacco industry would not want anything to do with me. Surprisingly, they actually wanted to know more. That was the nature of the email in question.

The email started off quite diplomatically, requesting I consult with them. Nothing out of the ordinary. The ending, however, left me dumbstruck. Like something out of a science fiction novel, the tobacco giant wanted six months of my service. The inducements were mind-boggling. They would pay me a fee that would propel me into a very comfortable, early retirement. Not a bad thought for a hardworking man in his 30s. The scope of the offer took my breath away. I had to sit down and take stock. My mother has smoked since she was 15, and I grew up hearing her coughing and wheezing through the long winter months. My mother-in-law, also a lifelong smoker, had only just recently died from a smoking-related illness. So, after much deliberation and consideration, I felt I had little choice but to decline.

But when my friends and family came to learn of this lucrative offer, they thought I’d made a big mistake. My own family thought me to be a little ridiculous turning down an offer that would guarantee lifelong security for a mere six months’ work. I began feeling twinges of regret. Was I too quick to say no? At the time, my doubt was painful and all-consuming. For hours on end I pondered the questions: Should I? Could I? Maybe…

As you can imagine, this was not an easy time. However, one year on, I’m convinced I did the right thing. More importantly, it forced me to think about the ethics of the advertising industry in ways I’d never done before.

As a brand guy who’s worked in advertising all my life, I’ve seen my fair share of ethical issues. To be frank, ethics and advertising don’t go together all that well. They are not exactly on first name terms. Pick up the phone and call any advertising agency anywhere, and ask them about their ethical guidelines. Chances are you’ll be met with an embarrassing silence. In the same way that there are few schools you can go to to learn advertising, there are even fewer where you can learn the ethics of advertising. Training for a career in advertising commonly happens on the job, and the ethical guidelines are filed away somewhere in legal departments’ archived rules and restrictions.

As a brand futurist, an important function in my role is to predict the future for whatever industry I’m addressing. In 2003, I wrote the book BRANDchild, in which I predicted that every kid would become a personal brand. Each would have his own homepage which would act as a promotional hub promoting the child’s brand to the entire world. A bit like “I have a homepage, therefore I am.” Facebook, the social networking site, was launched in 2004. In 2005, I wrote BRANDsense. In it I predicted that every brand would harness senses other than sight and sound. Today, it’s estimated that two-thirds percent of the world’s Fortune 1000 brands include a multisensory platform in their brand strategy.

My prediction for 2012 is a rise in the importance of ethics. I foresee a kind of WikiLeaks emerging to tackle the maneuvrings of less-ethical brands. The move will come from an independent organization with the sole mission of disclosing what those companies are up to. Most companies will be vulnerable to being targeted, despite having some sort of written standards. You see, in most cases, the small print is far too complex and removed from consumers’ daily reality. The safety net as designed will hardly save a soul.

So how would one go about establishing a true safeguard? As I said, I’m a brand guy who’s worked in advertising for ages. So I’m not necessarily the right person to ask. Maybe we should ask the people most affected: the consumers. Last year, I began a study of 2,000 consumers in which I asked for their ethical perspectives. Their advice proved invaluable. We would be wise to take note of it:

• Don’t do anything to kids and consumers that you would not do to your own children, friends, and family.
• Every time you launch a campaign, a new product, or a service, secure an “ethical” sign-off from your target group. Develop your own independent consumer panel (a representative target audience) and disclose the perception of the product, as well as the reality. Let the consumers make the final call.
• Align perception with reality. Your talents might very well lie in brilliantly creating convincing perceptions, but how do they stack up against the reality? If there’s a mismatch, one or the other must be adjusted in order for them to be in sync.
• Be 100% transparent. Nothing less. The consumer needs to know what you know about them. Furthermore, they must be told exactly how you intend to use the information. If they don’t like what they see, they need a fair and easy way to opt out.
• Almost any product or service has a downside, so don’t hide it. Tell it as it is. Be open and frank, and communicate the negatives in a simple and straightforward way.
• All your endorsements and testimonials must be real–don’t fake them.
• Does your product have a built-in expiration date? If so, be open about it and communicate it in a visible, clear, and easily understood manner.
• Avoid fueling peer pressure among kids. Bear in mind you’d hate for your kids to come under such pressure.
• Be open and transparent about the environmental impact of your brand (including its carbon footprint and sustainability factors).
• Do not hide or over-complicate any legal language you must place in your ads or on your packaging. These should be treated just like any other commercial message, using a simple, easy-to-understand language.

My advice: The smart brand players out there should spend the next few years cleaning up their house. Honestly, you won’t find it that difficult. Furthermore, you won’t be forced to reject an offer that could fast track you to retirement. The worst thing that can happen is you’ll sleep better at night. Not a bad proposition, I’m sure you’d agree.

A neuroscience technology breakthrough at the University of California, Berkeley, has major implications for the future of branding and marketing.

It finally happened. Neuroscience technology can now reliably read our minds. It’s an accepted fact that is no longer in dispute. Scientists working at the University of California, Berkeley, have successfully decoded brain activities into audible sounds. In other words, our inner thoughts can be translated into sounds clearly articulated by a computer. Needless to say, there are a whole lot of caveats attached to this claim. For a start, in order to make this kind of reading possible, it requires some 256 electrodes be surgically attached to the scalps of at least 15 volunteers. Furthermore, there’s a minefield of ethical issues attached to this endeavor that needs to be sorted out.

A couple of years ago I wrote Buyology, a book on neuromarketing that was based on 2,000 fMRI scans of volunteers’ brains. Thus I have witnessed firsthand the amazing results and the future that the neuroscientific approach is leading us to. As fascinating as it is, it can also be quite scary–particularly when combined with marketing. So, wearing my skeptic’s hat for just a moment, let me consider these questions: Will this new mind-reading research be the answer to the prayers of every advertising mogul and mainstream marketer? Will it finally provide the answer to the conundrum posed by John Wanamaker, the father of modern marketing, who famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Maybe. But I’m getting ahead of myself. The scientists in Berkeley focused on the brain’s temporal lobe–the home of the body’s auditory system–rather than the place where thoughts are formed. Although our inner voice tends to be dominated by less-articulated thoughts, it appears to be what drives our decision-making processes.

Take, for example, knocking on wood. Do you catch yourself doing it whenever you wish to ward off the gremlins of fate? There’s a 70% chance you do. I cited this figure in my most recent book, Brandwashed. Assuming this is part of what you do, I then want to know if it in fact works for you? How would you feel if I told you that I’ve conducted a study proving it’s a waste of time? I’m sure you wouldn’t be surprised. But here’s the rub: would you continue doing it? Chances are you would. That’s what my study turned up.

Logic does not have much to do with it. And this fact is at the core of the endless challenge to marketers. How else could one explain why eight out of 10 new product releases fail despite countless hours of focus groups and exhaustive market research? That’s because the research fails to shed further light on advertisers’ vexed questions regarding what ad should be run on which particular media. It seems that there’s never been more doubt.

Now if you combine the Berkeley research with other recent studies, the picture becomes more fascinating. Take the study conducted by scientists at the Max Planck Institute for Human Cognitive and Brain Sciences, which reveals that our decisions are made up to 10 seconds before we become aware of them. In that study, participants could freely decide if they wanted to press a button with their right or left hand. The only condition required that they remembered that decision. While making that very decision, scientists used fMRI to scan the brains of the participants. They were looking to see whether they could in fact predict which hand the participants would use before they were consciously aware of their own decision.

By monitoring the micro patterns of activity in the frontopolar cortex, the scientists could predict which hand the participant would choose seven seconds before the participant was aware of the decision. In an interview with Wired, John-Dylan Haynes, the coauthor of the study, said, “Your decisions are strongly prepared by brain activity. By the time consciousness kicks in, most of the work has already been done.”

With the recent findings made by the neuroscientists at Berkeley and those from the Max Planck Institute, does this mean that the “buy-button” has arrived? Not exactly–and, may I add, thank goodness. Reading our consumer mind is somewhat creepy. However, on the upside, many of the more dated research techniques (questionnaires, for example) are dying a natural death. Questionnaires believe emotions can be determined by “yes” or “no” questions, with a few extra lines to scribble in a more detailed explanation.

The days of relying on one source to draw an empirical conclusion are well and truly gone.

No single questionnaire or focus group, interview panel, or ethnographic visit will provide all the answers. Just as we know that to bake a cake requires numerous ingredients combined in specific quantities, so do we require a combination of factors and studies to achieve levels of accuracy that Wanamaker did not believe possible.

This leads me back to the vexing ethical questions. As someone who sits on both sides of the fence–I’m a brand guy as well as a consumer–I’ve naturally given this much thought. Even better, I’ve asked more than 2,000 consumers to share their views. And no, I did not subject them to brain scans. But this is a topic that cannot be covered in a concluding paragraph or two. Instead I’ll discuss it fully next week–and the results will startle you. Stay tuned.

There is much the corporate world can learn from this 25-year-old diva, whose talent for building a brand might even surpass her formidable performing chops.

On July 12, 2011, Lady Gaga’s private jet touched down on Australian soil. She was in town to promote her new album. The only formal gig planned for her was a mini-concert at the Sydney Town Hall. The venue was renamed Monster Hall in honor of her fans, who she regularly refers to as “Little Monsters.” Within hours of her arrival, she put out her first tweet: ‘Thinking of going out in Sydney tonight. How I wish we had a show. NEVERMIND, don’t listen to me. Maybe I’ll just go for a walk in the pARQ.’ So, had Lady Gaga travelled 20 hours for just the one concert?

As the hours ticked by, her many Sydney fans pondered the deeper meaning of her cryptic tweet. By late afternoon, they’d cracked it. Nevermind and Arq are the names of two popular Sydney nightspots. The fans began gathering at these venues from early evening. And then, just past the stroke of midnight, she entered stage right and began singing “Born This Way.” The crowd was ecstatic. Once again the fans had found their Lady Gaga–or was Lady Gaga finding her Sydney audience?

Lady Gaga has a thoroughly sophisticated understanding of direct consumer communication. She came from seemingly nowhere in 2008. (Well, okay, from the nowhere of New York City.) In four short years, she’s become a global phenomenon. Not many others can claim 47 million Facebook fans and more than 18 million Twitter followers. Her vast reach should inspire even the most skeptical of marketers out there.

There is much the corporate world can learn from this 25-year-old diva whose talent for building a brand might even surpass her formidable performing chops. Here are three things businesses should borrow from the woman christened Stefani Joanne Angelina Germanotta:

1. Connect–and stay connected–to creativity

Have you ever wondered where the idea for Lady Gaga’s meat dress came from? The dress, made out of fresh beef, surprised people across the world. It later went on to be preserved by taxidermists, and is now on display at the Women Who Rock exhibit at the Rock and Roll Hall of Fame in Cleveland. Another question to ponder is how Gaga’s scant 1,234 tweets generated millions and millions of fans? The tweets did not in fact come from Lady Gaga herself, but from Haus of Gaga, her behind-the-scenes creative team. This is not a clever exercise in renaming. The Haus of Gaga is made up of individuals who inspire her, pick up on trends, travel with her, and help create her outfits and shows. What they all have in common is that they each have direct access to the performer. The distance from idea to action is merely one conversation away.

Lady Gaga has been quoted as saying that taking away her creative team would be her downfall. It is interesting to note that the downfall of many brands has been exactly that. Steve Jobs made good design synonymous with every Apple product.  It was one of his priorities. As such, it is a well-known fact that Jonathan Ive, the head of design at Apple, reported directly to Steve Jobs. Every creative idea went straight to the top. Sadly, few companies realize how important creativity is for the survival of their brand.

2. Create a direct pipeline to your customer’s soul

Branding powerhouse Lady Gaga’s innovative strategies touch every part of her business–from marketing to social media to pricing her products:

Lady Gaga’s ability to get so very close to her audience and understand their needs, as well as cater to their hopes and musical tastes, is far from a coincidence. One of the secrets of her success can be found in a nondescript van that follows the concert tour, going wherever her team goes.

Most top performers produce their music at recording sessions in discretely luxurious studios. Lady Gaga does things differently. She takes along a mobile recording studio wherever she goes. A recording team, on call 24 hours a day, staffs this mobile studio. As a result, most of the songs she produces are recorded within hours of leaving the stage. She does this to capture the zeitgeist of the moment, tapping into the very DNA of her audience. She steps off the stage fresh with the knowledge of what her audience most passionately responded to. Then, with the applause still ringing in her ears, she steps into the mobile studio and responds to their feedback.

Which should resonate with today’s corporate world. I cannot count the number of times I’ve advised companies to move their research and development centers closer to their customers. Take, for example, a major coffee manufacturer I’ve worked with for years. They were puzzled as to why their newest coffee brand was performing poorly. When I visited their testing facility to sample the product, I was met by a team dressed in white, in a room painted white, and was served the coffee in a white mug. They were anxiously waiting for my opinion.

Sipping on that coffee in such an austere environment was a long way away from far the convivial atmosphere of drinking coffee at home. “So, what do you think?” they asked. My answer was considered as I explained that, despite the product testing well in the lab, it was necessary to take it into the home of the consumer. In that way, I’m sure they would see that the experience would be completely different. This was the broken link. So, we moved the innovation and testing process out of the laboratory and into private homes. They’re now testing coffee in consumers’ kitchens, living rooms, and front porches. Their accuracy of predicting a new coffee product’s success has increased by 60%.

3. Be vulnerable

In contrast to almost every other accomplished performer out there, a major ingredient in Lady Gaga’s success has been her ability to show an authentic vulnerability. She often shares stories about her own life with her fans, or ‘Little Monsters’, as she calls them, and never shies away from revealing her insecurities and listing her many mistakes. The Little Monsters love it. Not only does she manage to mirror her fans’ personal problems, but she also manages to unite them in a tight-knit tribe.

Many years ago, PepsiCo established an innovation lab online. It asked Pepsi fans to sign up, develop new flavors and concepts, and share these with PepsiCo. In order to understand the idea, I was quick to sign up, and share my ideas. I got an instant response: ‘Thank you for your ideas. We will get back to you.’ Six years later, I’m still waiting.

Some companies do, in fact, understand this. They engage their fans in innovation, treat them as stars of the show and, most importantly, get back to them frequently. Take LEGO, the Danish construction toy loved by kids for decades. Now, those kids can build the creature or vehicle or weapon of their dreams, photograph it, and upload it on the LEGO website, where it will be voted and commented on by other young aficionados.

The consumers love it. They feel so much a part of a brand that they are called upon to advise as well as share in the weaknesses and vulnerabilities. It makes everything more human. And that is perhaps the essence behind Lady Gaga’s popularity. She is human. This is a strength that I’d venture to say every great brand once had, but has lost sight of over time. If yours is a company that’s become disconnected from your humanity, perhaps it’s time to channel your inner-Gaga.

When it comes to the things we buy, what other people think matters. A lot. Here’s how the desires of strangers–inflamed by branders and marketers–mysteriously become our desires, too.

Many of us spend our days–or at least part of them–quietly cursing our fellow human beings. The guy in the Hummer who cuts us off at the intersection. The old woman in the supermarket line counting out pennies one by one. The tourist consulting a map right in front of the subway entrance. They may be annoying, but when all is said and done we actually rely on these people, and others like them, to help dictate our purchasing choices–with more than a little help from companies and marketers, of course.

When it comes to the things we buy, what other people think matters. A lot. Even when those people are complete strangers. One survey, by Opinion Research, shows that “61% of respondents said they had checked online reviews, blogs and other online customer feedback before buying a new product or service,” and a similar 2008 study commissioned by PowerReviews showed that “nearly half of U.S. consumers who shopped online four or more times per year and spent at least $500 said they needed four to seven customer reviews before making a purchase decision.” So persuasive are the opinions of others that while many of us are well aware that roughly 25% of these reviews are fakes written by friends, company staffers, marketers, and so forth, we purposely overlook this. We’d rather not think about that. And, frankly, we don’t seem to care. As the Times of London points out, we are born to believe, in part, because a collective belief helps us to bond with others. In short, we want to trust in these messages, even when we may also be deeply skeptical.

To see just how powerfully complete strangers’ preferences and purchases can sway our decisions, consider the phenomenon of best-seller lists. Best-seller lists work so well in persuading us that they can be found everywhere from, famously, The New York Times‘ lists of best-selling books to Sephora’s list of best-selling cosmetics to Entertainment Weekly’s Ten Most Popular TV shows to Variety’s list of the ten highest-grossing movies of the week to the Apple iTunes music store’s list of best-selling or recommended singles, albums, movies, and music videos. And on and on–well past the break of dawn.

Let’s talk for a moment about iTunes. Not unlike a Barnes & Noble superstore, the iTunes start page is a chaotic place teeming with choices. Luckily for the overwhelmed shopper, however, these endless offerings are organized into tidy recommended categories like “What We’re Watching,” “What’s Hot,” “What We’re Listening To,” “New and Noteworthy,” and, of course, “Top Songs” and “Top Albums.”

An intriguing study published in the journal Science shows just how well this can work. The researchers invited 27 teenagers to visit a web site where they could sample and download songs for free. Some of the teens were told what songs previous visitors had downloaded, while other teens were not told. Those told what songs their peers had chosen tended to download those very songs.

And part two of the study was even more telling. This time, the teens were divided into eight groups and told only what had been downloaded by people from their own group. The researchers found that not only did the teens tend to choose the songs that had been previously downloaded by members of their groups, but the songs that became “hits” varied across all the groups. The implications were clear: whether or not a song became a “hit” was determined solely by whether it was perceived as already being popular.

But this still doesn’t explain precisely why our buying decisions are so unduly influenced by a brand’s supposed popularity. So the authors of the study decided to use an fMRI to see what was really going on in these impressionable teenagers’ brains when they succumbed to peer pressure. They had 12-17-year-olds rate 15-second clips of songs downloaded from MySpace. Then they revealed to some the songs’ overall popularity. The results showed that when the participants’ own ratings of the music matched up with what they had been told about the song (e.g., if they liked a popular song), there tended to be activity in the caudate nucleus, an area of the brain connected to rewards. When there was a mismatch, however (e.g., the teen liked the song but discovered it was unpopular), areas associated with anxiety lit up. The researchers concluded that “this mismatch anxiety motivates people to switch their choices in the direction of the consensus, suggesting that this is a major force behind conformity observed in music tastes in teenagers.”

Early popularity is so closely tied to a brand or product’s ultimate success that even Hollywood is leveraging the predictive power of the ticket-buying hordes. According to New Scientist, (subscription needed), one of the most widespread new techniques for predicting the box-office performance of a film is by using something called “artificial markets.” On The Hollywood Stock Exchange, for example, movie fans can buy and sell virtual shares in celebrities and in forthcoming or recently released films. This virtual market, which operates with a virtual currency called Hollywood Dollars, uses these predictions to create a stock rating reflecting the aggregate view of each film’s popularity or likely popularity (obviously, people only buy virtual shares in things they expect to be hits) becoming the gold standard in the industry for predicting likely box office receipts, political campaigns and share prices.

Of course, we generally aren’t consciously aware that perceived popularity is driving our preferences. So for my new book Brandwashed, I decided to team up with Murray Hill Center, one of the top focus group companies in the country, in order to find out what we think attracts us to products. “Why do you love Louis Vuitton so much?” we asked 30 women. In answering, each of them began talking about the quality of the zipper, the leather, and finally, the brand’s timelessness. But had we heard the whole truth? To be sure we decided to scan the brains of 16 of them using fMRI to uncover another layer of their answers.

In each case, when the women were shown pictures of Louis Vuitton products, the Brodmann area 10, the region of the brain that’s activated when respondents are observing something they perceive as “cool,” lit up. The women had rationalized their purchases by telling themselves that they liked the brand for its good quality, but their brains knew that they really chose it for its “coolness,” perhaps explaining why we’re all so addicted to those top 10 lists–because deep deep inside we want to be on the top of the cool list.

Being able to hold things before we buy them makes us more satisfied with our purchases.

In 2011, many shoppers opted to avoid the frenetic crowds and do their holiday shopping from the comfort of their computer. Sales at online retailers gained by more than 15%, making it the biggest season ever. But people are also returning those purchases at record rates, up 8% from last year.

What went wrong? Is the lingering shadow of the global financial crisis making it harder to accept extravagant indulgences? Or that people shop more impulsively — and therefore make bad decisions — when online? Both arguments are plausible. However there is a third factor: a question of touch. We can love the look but, in an online environment, we cannot feel the quality of a texture, the shape of the fit, the fall of a fold or, for that matter, the weight of an earring. And physically interacting with an object makes you more committed to your purchase.

When my most recent book Brandwashed was released, I teamed up with a local Barnes & Noble to conduct an experiment about the differences between the online and offline shopping experiment. I carefully instructed a group of volunteers to promote my book in two different ways. The first was a fairly hands-off approach. Whenever a customer would inquire about my book, the B&N volunteer would take them over to the shelf and point to it. Out of 20 such requests, six customers proceeded with the purchase.

The second option also involved going over to the shelf but, this time, removing the book and then subtly holding onto it for just an extra moment before placing it in the customer’s hands. Of the 20 people who were handed the book, 13 ended up buying it. Just physically passing the book showed a big difference in sales. Why? We feel something akin to a sense of ownership when we hold things in our hand. That’s why we establish or reestablish connection by greeting strangers and friends with a handshake. In this case, having to then let go of the book after holding it might generate a subtle sense of loss, and motivate us to make the purchase even more.

A recent study conducted by Bangor University together with the United Kingdom’s Royal Mail service also revealed the power of touch, in this case when it came to snail mail. A deeper and longer-lasting impression of a message was formed when delivered in a letter, as opposed to receiving the same message online. FMRIs showed that, on touching the paper, the emotional center of the brain was activated, thus forming a stronger bond. The study also indicated that once touch becomes part of the process, it could translate into a sense of possession. In other words, we simply feel more committed to possess and thus buy an item when we’ve first touched it. This sense of ownership is simply not part of the equation in the online shopping experience.

As the rituals of purchase in the lead-up to Christmas change, not only do we give less thought to the type of gifts we buy for our loved ones but, through our own digital wish lists, we increasingly control what they buy for us. The reality, however, is that no matter how convinced we all are that digital is the way to go, finding real satisfaction will probably take more than a few simple clicks.

It’s when companies under-promise and over-deliver that people experience memorable moments that will affect their habits for a lifetime.

In a small restaurant in Shinjiku, a suburb of Tokyo, I ordered sake. First, the waitress placed a small wooden box in front of me. Then she arrived with a large tray carrying 40 cups. Each one, she explained, represented a different personality. I chose a blue cup, which she removed from her tray and carefully placed in the box.

As she began to pour the traditional drink into my small blue cup, things took a decidedly unusual turn. I had, as most would guess, expected her to stop below the rim. Instead she continued pouring, the clear liquor overflowing into the wooden box. And then, when most of the cup was submerged, she stopped, smiled, bowed, and said, “Enjoy.”

As I nimbly attempted to fish for the cup, I asked her why she had poured so much. Her answer surprised me. She said, “Martin-san, I do this to show gratitude–to deliver a little bit more than what you expect.”

Do you remember the last time you got more than you expected? Perhaps you were shopping for groceries or even buying something online. Am I right in assuming that, rare as these occasions are, when they happen you don’t forget them? When I was a kid, I was a devoted LEGO builder, collecting box after box. I came to realize that LEGO always placed a few extra bricks inside the box, bricks never accounted for on the list of inventory. Over the years I began to accumulate a secret collection of LEGO’s gifted bricks. Funnily enough, I valued this collection above all others. It took on a kind of sacred quality.

Some years later, I visited the factory and the manager told me that those extra bricks were more a matter of practicality than goodwill. They were included in an attempt to circumvent thousands of requests from distraught parents who had unsuccessfully searched for that missing piece lost under the carpets or beneath the furniture.

Devalued as my collection of special bricks may have been in that childhood moment, what LEGO had inadvertently achieved was to over-deliver and under-promise. And that’s what stuck with me.

These days, we seem to be following a reverse philosophy. We over-promise and under-deliver. Or, at best, we deliver exactly what was promised–nothing more, nothing less. Just think of that pre-packed shrimp salad you bought, where you found that there was not a single shrimp amongst the lettuce, only the four at the top of the plastic container. Or the big bag of potato chips that is more air than chips. In general, we are more familiar with a leaner scenario than we are with excess.

Several years ago, I checked into the Peninsula Hotel in Chicago. I asked the concierge if it was possible to borrow some music CDs. Over the years, I’d grown accustomed to listening to music supplied by other hotels in the Peninsula group. It’s a service they offer to all their regulars. As the hotel was new, the clerk politely informed me that this particular Peninsula had no CD library. Oh, well, so it goes. Yet minutes later, the concierge called to ask me what my favorite music was. Eminem, ABBA, and the Beatles, I replied. I was curious about this, but it slipped my mind as I continued working.

About 20 minutes later, I heard a knock on my door. When I opened it, the concierge handed over a small bag containing three CDs. You guessed it: Eminem, ABBA, and the Beatles. “This is a personal present from us to you,” the concierge said. “Welcome to the Peninsula.”

Now’s let’s pause here for a second. I’ve related this anecdote to hundreds of thousands of people attending my conferences–and to millions who have watched my TV appearances. My guesstimate would be that some 15 million people have heard this story. The cost to the Peninsula? About $22.50.

Needless to say, the Peninsula experience is far from common. However, every time I hear consumers raving about a brand, almost without exception it’s been the result of the brand over-delivering. In a world where promises are routinely ambiguous or broken, when we encounter such service we find it, quite literally, remarkable. Small acts of generosity imbue us with that rare feeling of being cared for or considered by a company. Perhaps, when it comes down to it, we’re still kids falling under the spell of surprise. If it’s better than what we expected–or hoped for–we remember it above all else.

Who knows? Maybe the brand manager responsible for your favorite brand will not only read this article, but will act on it. Don’t get your hopes up–catering to you may cost a few dollars more than what has been budgeted. After all, few people are willing to step outside the plate and eat into the budget that’s already been set aside for things like consultants or social media ads.

Evidence points to information from trusted sources getting a better hold on our brains than the noise from everything else. So it’s no surprise that companies want to capitalize on those feelings.

Let’s say that not that long ago you came across a fascinating article. But when you later try to verify some of the facts, you just can’t pinpoint exactly where you first read it. What you do recall is that the source was reliable and you trusted the message. This is a situation I find myself in quite regularly. So much so, that I’ve pondered the conundrum and come up with a theory: we store information according to how trustworthy we deem the source of the message to be.

There’s more to it. Trust isn’t the only criteria we impose on information we receive every day, it’s also linked to the emotional relationship we’ve developed with the source. Take for example your average mother. No one is more familiar with her children than she; nevertheless she still manages to call one adult child by their sibling’s name–undoubtedly the cause of much family mirth. Funnily, as you get a little older, you find your name memory beginning to fade too. You call a close friend by your brother’s name, and so the common misnomer baton moves on to embrace the next generation. You may try to joke your embarrassment away, but have you ever pondered the reasons for this common form of memory stumble?

Many studies demonstrate that trust, above all else, becomes a more salient feature in our life as we grow older. Perhaps it’s because with our accumulated years, we’ve had our fingers burnt–more than once–by trusting the wrong people. Now, older and wiser, we begin categorizing our surroundings based on the level of trust we have developed. There’s our inner circle, consisting of family members and longstanding friends. Our brains deem all those who occupy the inner circle to be trustworthy. Trust first, name second. I believe this to be the reason why I often confuse my best friend’s name with my close cousin.

In a 2010 study conducted by Harvard professor Bharat Anand, and Alezander Rosinski, they examined how the power of ads are influenced by the magazine or newspaper they appear in. By placing the same ad in the respected Economist and perhaps the less respected Huffington Post, they discovered that the more respected the publication, the more people would trust and recall the ad. Above and beyond understanding how the context of the message influences the level of trust we assign it, I wanted to find out to what extent this would influence the speed in which the message is shared and if it leads us to buy more.

Which brings me back to my theory on how we store information according to our levels of trust. I put this theory to the test during the course of a research experiment I conducted for my newest book Brandwashed. A carefully selected Californian family was tasked with spreading brand messages to anyone and everyone in their social circle. The important component of this was that the only means to spread the message was by word-of-mouth. Their home was monitored using 35 hidden cameras over a period of three months.

Everyone involved in the process was asked to send a text message to a central server every time they would think of a brand. By correlating this data with sales figures from all the participating brands, we would begin to understand when and how a word-of-mouth recommendation takes hold. We’d also come to understand the dynamics involved in the message taking hold. ChatThreads, a company that quantifies the impact of consumer brand encounters, was responsible for tracking these particular messages.

We learned that when a person we trust makes a recommendation, we not only follow their advice, but we also convey the trust of the initial communication to others. One leads to the next, and the next, and the next … The message being spread follows a subtle trajectory, but it begins with the belief that the initial source is thoroughly reliable.

One of the most fascinating things that emerged from the Brandwashed experiment was the importance of how the message was transmitted–the words used, the tone of voice adopted, the inflection and enthusiasm conveyed. When these behavioral components come together in the right measure, sales are likely to soar.

But there was one observation that totally surprised me. As part of the experiment we’d asked our test family to adopt an environmentally conscious behavior. To assist them in this endeavor, we brought in experts to advise the family on changing their patterns of consumption. They taught them how to recycle and conserve. We wanted to see if it was possible to effect change amongst hundreds of families’ daily routine by introducing new behaviors at the highest levels of trust–from the experts down. In other words, could a single family’s environmentally conscious behavior set the standard for their social circle and thus create widespread change?

The answer was a clear and resounding “Yes!” Close to 31% of the thousands of people affected by the experimental family changed their recycling and conserving habits.

Combining ChatThreads’ brand tracking data with the sales and observational figures led to a simple key learning: Deep trust is communicated subconsciously. It’s rarely expressed explicitly, nor is imparted loudly or didactically. To trust deeply not only can change our minds, but it has the power to alter our most ingrained behaviors. It’s a subtle emotion that the average commercial message fails to embody. Traditional television and radio ads tend to shout their slogans and persuasive urgings. And although we’re generally conscious of what these ads are pushing, we are more likely to shy away.

I guess I’ve made my case. Now all that remains is the question of whether I’m to be trusted. Undoubtedly, your brain has already made up its mind.

Retailers know how to manipulate all our senses — and that includes our olfactory ones

Every December, you vow it’s not going to happen and yet, without fail, you return home from your Christmas shopping with far more than you intended. Do you ever wonder why? The answer might surprise you, because you’ve probably been seduced by something you can neither see nor hear.

It was a perfectly normal kind of day when I was first struck by that feeling of Christmas in the air, the one that links directly to childhood anticipation of the festive season. The odd thing was that it was early November, yet my need for tangible symbols of the festive season had bitten like a bug. I studiously hit the streets of my neighborhood in search of the perfect tree. I bought decorations and wrote Christmas cards, only to realize that Nov. 5 was a little early to be mailing them.

I was astounded by my behavior. After all, I’m a 41-year-old man who’s long since stopped believing in Santa Claus. So what was it that led me to this neat pile of cards ready to be mailed a good six weeks before Christmas? In my attempt to understand, I went over the details of the days leading up to my own personal Christmas frenzy, and I tracked the origins of it back to a brief window of time as I changed flights in the Zurich airport. I noticed the duty free shops were already full of the colors of Christmas. There was a ginormous tree topped by a gleaming star, surrounded by images of Santa’s and reindeer and sleighs. But surely it would take more than clichéd icons to turn me into a Christmas zombie?

Not having anything else to go on, I investigated further. Turns out I was on the right path, for the truth of the matter was to be found in the mechanisms behind the displays. To be more precise, carefully camouflaged tubes strategically placed amongst the tinsel and glitz were piping in the sumptuous smells of Christmas: a perfect mix of cinnamon and pine.

Although it seemed I’d gotten to the nub of the issue, I was still perplexed. I mean, can a tube dispensing cinnamon and pine really compel me to embrace the Christmas spirit way ahead of time? Surprisingly, yes. Dr. Gemma Calvert, who is an expert in modern brain imaging based in Oxford, England, discovered the remarkable ability smells have to reactivate childhood memories. She exposed a group of volunteers to cinnamon and then viewed their reactions, using an fMRI scanner. As they breathed in the sweet spicy scent, their brains fired up — including the region responsible for authentic emotional engagement. It seems cinnamon is one of the main ingredients associated, over time, with baking and cider-making rituals and can kick-start an emotional journey whenever it wafts our way.

So while it might seem as though retailers are concentrating on everything that delights your eyes and ears, they also might be surreptitiously enticing you to buy more through your nose. And they might not even be doing it in a sneaky manner. This season, Trader Joe’s, Publix, and other supermarkets are prominently displaying heavily-scented “cinnamon brooms” by the check out — large, smelly bunches of twigs to hang inside your home and anoint with cinnamon oil when their pungency starts to fade. At Bed, Bath and Beyond, Home Depot, and other big-box stores, cinnamon-scented pine cones for sale greet you as you walk in the door. Take these items home and you might even get the urge to rush out shopping again. Christmas is in the air — quite literally!

Those hours you spend driving each day will soon be interrupted with contextual advertising, pointing you to that Starbucks around the corner or the McDonald’s just down the street.

Imagine this: You’re taking the family for a ride in your new Toyota, when you experience something unnerving. As you cruise past the local McDonald’s, the car radio begins playing “Happy Birthday.” There’s more. The lyrics mention your son by name and, eerily, it happens to be his sixth birthday. At the end of the song, McDonald’s offers him a free birthday meal, an offer which will expire in 30 minutes. A notion that was once the province of science fiction has become a reality, at least in Tokyo.

While the latest preoccupation of advertisers is to secure space on smartphones or Facebook, a quieter rush for real estate has begun in the media industry. It’s a type of rush that’s never been seen before; it’s got nothing to do with your online environment, nor does it involve your cell phone. The new battleground is your car.

TV’s lost its grip, with viewers declining and more using DVRs to skip over ads. Newspapers are searching for new revenue models. And as our demand for personal content grows, the space between the doors will become the battleground of the corporate titans. This should come as no surprise given the fact that the average American spends two to three hours a day in their car, making them a captive audience. And with more than 250 million registered passenger cars in the U.S. alone–and a couple of billion cars worldwide–the internal space of our motor car is about to be colonized.

The time is ripe for the next generation of Contextual Branding–the art of sending the right message, to the right audience, at the right time. Japan is unquestionably the leader in this form of advertising. I have a crystal clear memory of my first encounter with it. I was in Tokyo and using a Do-Co-Mo phone when I received a message: “Martin, you have a friend in the area. Would you like to know more?” Naturally, curiosity got the better of me and I responded with a quick “Yes.” Within minutes it got back to me. “Starbucks would like to sponsor your meeting–please accept.” And so I did. A map appeared on my phone directing me to the nearest Starbucks, along with a coupon for a cup of coffee for two. I made my way over and there was a friend who I had not seen in six years. Thanks to Starbucks we reconnected over a cup of coffee, and then another.

Impressive as this story may appear, it’s old news in Japan. They have moved on from messages that rely on coincidences of time and place. They’re working on a future where the media can target potential customers with bull’s-eye accuracy and they’re willing to pay for personal information with hefty discounts.

Let’s revisit the talking Toyota. The story first begins at the point of contact between car dealer and driver. The dealer asked my friend if he would be interested in a substantial discount in exchange for putting some of his personal information on their database. Eager to cut a few thousand yen off the purchase price, he began by giving details of his occupation and income, family size, birthdays of every family member, brand preferences, food preferences, color preferences, and favorite vacation spots. In other words, enough information to address three main data points:

1. Personal information about the car’s likely passengers
2. Date, time
3. Car’s position

This is a powerful cocktail of information. In principle, the car would know when you’re likely to feel hungry as well as what food you’re likely to eat. It will know when you will be buying gifts and at what point you’re most likely to be receptive to commercial messages. And all this will occur during your three hours of driving a day.

The car space is theoretically a virgin space. Almost all the information you receive is passive, no matter where you are, who you are, or what rocks your particular boat. This is a space that industries will fight to gain ownership of in order to convert it into a contextual space. One can only wonder who will win the race: the media industry, the online search industry, or perhaps the telecommunication industry. Toyota, Google, News Limited, or Apple? Will the car industry have the foresight to team up with its competitors to create a propriety navigation system for the vehicles they manufacture? Will Google end up dominating the vacant car space by using its Street View and positioning systems? Will News Limited be able to convince us that news is king, particularly when it’s customized to suit your particular taste? Or are we so attached to our Apple products that we can’t imagine using anything less than its propriety Apple navigation format?

As of now, no one can lay any clear claim on this highly attractive market space. GPS navigation systems are already featuring logos for gas stations, fast food restaurants, and banks. It has only just begun. But as we continue to spend hours a day stuck in a car, there’s not a whole lot we can do about it, but receive commercial messages.