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Did You Notice the Ads? Examining the Influence of Telepresence and User Control on the Effectiveness of Embedded Billboard Ads in a VR Racing Game

Abstract Virtual reality (VR) can enhance game players’ experience by creating a hyperrealistic environment through telepresence. While marketers have found opportunities for advertising in this new medium, little is known about how consumers process displayed ads in VR. This study examines the impact of telepresence and active control on the effectiveness of embedded in-game ads in a custom-built car racing game. A total of 88 undergraduate students participated in a 2 (telepresence: VR versus flat screen) × 2 (active control: playing versus viewing) between-subject experiment. Brand recall, brand recognition, product purchase intention, and advertised product price estimates were measured. The results showed that billboard ads were the least likely to be remembered by players and the most likely to be remembered by viewers. We did not find a difference in brand recall and recognition between the VR and flat-screen conditions. However, regardless of game control, VR led to higher price estimates. We also found an interaction effect of telepresence and control on purchase intention.