Trusting the Virtual: How Virtual Reality Advertising Influences Customer Decisions

Abstract

This study aims to explore the impact of virtual reality, 360-degree video, static image advertisements on customer trust and their tendency to approach shared accommodations. A total of 306 questionnaires were collected through a within-subject field experiment and analysed using Smart PLS, to measure the effectiveness of each advertising method on customer decision making. The findings reveal that both VR and 360-degree video advertisements significantly enhance customer trust and approach tendency compared to static images. Furthermore, the interactivity and vividness of advertisements significantly impact trust in advertising directly while influencing brand trust indirectly. Brand trust has a stronger impact on behaviour in VR and 360-degree video advertising, while advertising trust is more influential in static image ads. For shared accommodation advertisers, enhancing the vividness and interactivity of advertisements - particularly through the development and use of virtual reality (VR) and 360-degree video ads - is key to building customer trust by creating more immersive user experiences. Managers should recognise that vividness and interactivity influence brand trust indirectly through advertising trust and thus should prioritise enhancing advertising trust as a key strategic objective.