Impact of 3-D advertising on product knowledge, brand attitude, and purchase intention: the mediating role of presence.

Internet advertising has evolved dramatically since its inception in 1994 when the first banner ads appeared on the Hotwired site (Adams 1995). Although banner ads are still a dominant type of Internet advertising, their share decreased from 56% of the total $4.6 billion Internet advertising revenue in 1999 to 48% of the $8.2 billion in 2000. Furthermore, 2000 marked the first year in the United States that revenue from rich media advertising was listed separately, accounting for 2% of the total ad revenue (Interactive Advertising Bureau 2001). Rich media advertising is different from conventional banner ads, in that it generally incorporates high impact sound with video and is often more interactive (Rewick 2001). More recently, three-dimensional (3-D) advertising has emerged as a new form of rich media advertising (Mirapaul 2000) that enables consumers to inspect products on the Web, much like they can in a retail store, for certain types of products. More important, 3-D advertising can simulate a new consu mption experience--virtual experience.

Although the concept of virtual experience had been used in previous research (Klein 1998), Li, Daugherty, and Biocca (2001) defined it as psychological states that consumers undergo while interacting with 3-D products in a computer-mediated environment. McLuhan and McLuhan (1988) suggest that, within any medium, there is a connection among the human mind, the technology, and the environment that serves to immerse users. On the Internet, consumers are able to experience psychological states because the medium creates a sense of presence that results in augmented learning, altered behaviors, and a perceived sense of control (Hoffman and Novak 1996).

A sense of presence is an important mediator in the formation of virtual experience from 3-D advertising (Biocca, Li, and Daugherty 2001). Presence is defined as the illusion of "being there" (Lombard and Ditton 1997; Steuer 1992) or an experience of being in an environment while physically situated in another location (Witmer and Singer 1998). Researchers (Coyle and Thorson 2001; Klein 2001) have recognized the relationship between presence and virtual experience and attempted to test it empirically. However, the role of presence in generating virtual product experiences from 3-D advertising remains unclear. Therefore, the purpose of this study is three-fold. First, we explore the properties of 3-D advertising and its impact on consumers through an elevated sense of presence. Second, we explain how presence mediates the formation of virtual experience. Third, we test a set of hypotheses derived from the conceptualization to advance the knowledge of 3-D advertising in the area of electronic commerce.