How Virtual Reality Leads to Positive Responses to Persuasion Attempts: The Implications of VR Brand Placement

Abstract

Facebook has started to test advertising in virtual reality, yet consumers’ responses toward this phenomenon have been neglected in the virtual reality and consumer behaviour literature. Most of the previous research has focused on VR as the primary tool for representing the service or product and not a medium for advertising purposes. Therefore, brand placement in virtual environments, as one of the most common persuasive advertising efforts by brands, is the focus of this study. More specifically, this research analyzes the effect of brand placement context (VR, 360 or 2D) and placement congruity on consumers’ persuasion knowledge and their responses towards brands, using the cognitive load theory and persuasion knowledge model to predict and explain the effect. The research model was tested using PLS-SEM and the PROCESS macro with a sample of 209 participants. The results confirmed that participants who experienced a higher sense of telepresence and interactivity (VR condition) were more likely to report lower persuasion knowledge and better brand evaluations and behavioural intentions. It was also found that compared to the 360 condition, in VR and 2D environments, participants were more likely to recall the brand embedded into the environment. Placement congruity was found to moderate the underlying mechanism through which interactivity and telepresence affect persuasion knowledge. These findings provide helpful insights to marketers and brand managers, who think of VR as an advertising tool, on how the technology factor impacts consumers’ responses to their persuasion attempts, such as brand placements.