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An Emerging Theory of Avatar Marketing

An Emerging Theory of Avatar Marketing

Fred Miao, Irina V. Kozlenkova, Haizhong Wang, Tao Xie and Robert W. Palmatier

In 2020, Samsung’s Star Labs brought digital avatars to CES 2020. However, this promotion was burned by its own fanfare. The avatars looked realistic and successfully answered some questions, but only when they were heavily controlled.

As the above example illustrates, avatar-based marketing is still in its nascent stage. Consequently, marketers need help designing strategies for successful marketing applications. A new Journal of Marketing study explores how to accomplish this important goal.

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A pressing question is “How to design effective avatars?” Given the considerable amount of ambiguity about the definition of avatar, we first identify and critically evaluate key conceptual elements of the term avatar and offer this definition: digital entities with anthropomorphic appearance, controlled by a human or software, that have an ability to interact. 
 
Based on this definition, we present a typology of avatar design to isolate elements that academics and managers can leverage to ensure avatars’ effectiveness for achieving specific goals (e.g., providing standard vs. personalized solutions). Different design elements cause avatars to vary in their visual appearances and behaviors during interactions with humans. All design elements affect avatars’ form realism and behavioral realism. Form realism refers to the extent to which the avatar’s shape appears human, while behavioral realism captures the degree to which it behaves as a human would in the physical world. Form realism includes design elements such as spatial dimension (2D/3D), movement (static vs. dynamic), and human characteristics (e.g., name, gender), whereas behavioral realism captures the avatar’s communication modality (e.g., verbal), response type (scripted vs. natural response), social content, and its controlling entity. 
 
Our review of extant literature and business practices reveals a key limitation: lack of consideration of the alignment between form and behavioral realism of avatars. If the levels of form and behavioral realism are mismatched, the consequences for avatars’ effectiveness may be profound and can help explain inconsistent avatar performance.

Integrating form and behavioral realism, we produce a 2 x 2 avatar taxonomy that identifies four distinct categories of avatars: simplistic, superficial, intelligent unrealistic, and digital human avatars. A simplistic avatar has an unrealistic human appearance (e.g., 2D, visually static, cartoonish image) and engages in low intelligence behaviors (e.g., scripted, only task-specific communication). For example, in the Netherlands, ING Bank’s 2D, cartoonish-looking avatar Inge responds to simple customer inquiries from a set of predetermined answers. In contrast, a superficial avatar has a realistic anthropomorphic appearance (e.g., 3D, visually dynamic, photorealistic image), such as Natwest Bank’s Cora, but low behavioral realism in that it is only able to offer preprogrammed answers to specific questions. An intelligent unrealistic avatar (e.g., REA) is characterized by humanlike cognitive and emotional intelligence, but exhibits an unrealistic (e.g., cartoonish) human image. These avatars can engage customers in real-time, complex transactions without being mistaken for human agents. Finally, a digital human avatar such as SK-II’s YUMI is the most advanced category of avatars, characterized by both a highly realistic anthropomorphic appearance and humanlike cognitive and emotional intelligence, and is designed to provide the highest degree of realism during interactions with human users.

Based on observations of relative effectiveness of these avatars in practice, we derive theoretical propositions that predict outcomes of avatar marketing. In particular, we suggest that:

  • As the form realism of an avatar increases, so do customers’ expectations for its behavioral realism. 
  • Differences between the avatar’s form and behavioral realism have asymmetric effects, such that customers experience positive (negative) disconfirmation when an avatar’s behavioral realism is greater (less) than its form realism. 

Recall the avatar of Samsung’s Star Labs, which is high in form realism but low in behavioral realism? Our analysis indicates that Samsung’s avatar sets audience expectations too high, which may have led to a negative disconfirmation, thereby resulting in an unfavorable customer experience. 

We also suggest that avatars’ effectiveness may be highly contingent on the level of perceived uncertainty users experience during their interactions with avatars as well as choice of media channel (e.g., smartphones vs. desktops). Finally, design efforts should take the customer relationship phase into account because the relative effects of customers’ cognitive, affective, and social responses differ across relationship stages.

Our framework generates practical implications that urge firms to consider five interrelated areas:

(1) when to deploy avatars,
(2) avatar form realism,
(3) avatar behavioral realism,
(4) form–behavioral realism alignment, and
(5) avatar contingency effects for optimal avatar-based marketing applications. 

Read the full article

From: Fred Miao, Irina Kozlenkova, Haizhong Wang, Tao Xie, and Robert Palmatier, “An Emerging Theory of Avatar Marketing,” Journal of Marketing.

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Fred Miao is Associate Professor of Marketing, University of Texas at Arlington, USA.  

Irina V. Kozlenkova is Assistant Professor of Marketing, University of Virginia, USA.

Haizhong Wang is Professor of Marketing, Sun Yat-sen University, China.  

Tao Xie is a Ph.D. Candidate, Sun Yat-sen University, China.

Robert W. Palmatier is Professor of Marketing and John C. Narver Chair in Business Administration, University of Washington.