The SME is often thought of as a direct test of associative episodic memory, in that successful recall of an item must derive from successful item-to-context binding. To some extent, this is true -- part of the underlying neural activity related to successful encoding definitionally comes from the formation of episodic associations. However, successful encoding also relies on other neural processes responsible for (1) perception, because an item must be seen or heard to be encoded, (2) attention, because the brain must be oriented towards processing experimental stimuli, and (3) task engagement or intentionality, because the study subject must be trying to maximize task performance. The lines between these cognitive processes are undoubtedly blurry, and this list is by no means exhaustive. The broader message is that by comparing successful to unsuccessful encoding, the SME captures neural activity responsible for forming episodic associations and neural activity responsible for many other processes, and then averages the effects.
