Context in augmented reality marketing: Does the place of use matter?

Augmented reality (AR) integrates virtual content into a consumer's perception of the real world. While academic interest in AR is growing, most prior research has focused on consumer evaluations of AR content and neglected the physical context in which AR content is consumed. Addressing this research gap, two experimental studies showed that context (e.g., experiencing a virtual sofa at home vs. in a university classroom) impacts consumer judgments and evaluations. The results reveal two primary effects of context. First, contexts in which virtual objects meet users' personal and cultural expectations associated with a specific location (e.g., a sofa in a living room) increase plausibility. However, such functionally appropriate contexts (counterintuitively) decrease local presence (i.e., the perception that the virtual product is “here”). Study 2 extends this model by showing that plausibility (a rational and deliberate assessment of AR content) and local presence both impact utilitarian benefits, whereas local presence has a stronger effect on perceived physical tangibility. The findings extend prior theory on the psychological mechanisms impacting judgment and presence in AR, and they provide managers with important insights regarding the influence of context on downstream variables in their AR and metaverse marketing strategies.