Gamification: Conceptualizing and Testing a New Consumer-Firm Interaction Paradigm

DISSERTATION of the University of St. Gallen,

School of Management, Economics, Law, Social Sciences

and International Affairs to obtain the title of

Doctor of Philosophy in Management

submitted by

Jessica Müller-Stewens

from

Germany

Approved on the application of

Prof. Dr. Andreas Herrmann

and

Prof. Dr. Torsten Tomczak

Dissertation no. 4617

Rosch-Buch, Scheßlitz, 2017

The University of St. Gallen, School of Management, Economics, Law, Social Sciences and International Affairs hereby consents to the printing of the present dissertation, without hereby expressing any opinion on the views herein expressed. St. Gallen, October 24, 2016 The President: Prof. Dr. Thomas Bieger

To my family.

Vorwort Die Promotion an der Universität St. Gallen war für mich eine lehrreiche, spannende und herausfordernde Zeit zugleich. Gerne möchte ich an dieser Stelle die Gelegenheit nutzen, um mich bei meinen Unterstützern und Weggefährten zu bedanken.

Mein grosser Dank gebührt in erster Line meinem Doktorvater Prof. Dr. Andreas Herrmann für seine grosse Unterstützung. Dein Vertrauen in meine Fähigkeiten und Dein Anstacheln meines Ehrgeizes hat es mir ermöglicht mich in meiner Zeit an der Universität St. Gallen wesentlich weiterzuentwickeln. Ebenso möchte ich meinem Korreferenten Prof. Dr. Torsten Tomczak für den wertvollen Input danken. Euch beiden möchte ich darüber hinaus für die interessanten Einblicke in die Praxis meinen Dank aussprechen. Zusätzlich möchte ich mich bei meinem Co-Autor Prof. Gerald Häubl, Ph.D. für die intensiven und konstruktiven Diskussionen, die das Entstehen dieser Arbeit massgeblich beeinflusst haben, bedanken. Besonderer Dank gilt Dr. Tobias Schlager, meinem Post-Doc und Co-Autor. Vielen Dank für diese interessanten gemeinsamen Jahre und Deine grenzen- sowie uhrzeitlose Unterstützung. Mögen noch viele weitere Jahre der gemeinsamen Zusammenarbeit folgen.

Auch möchte ich mich bei meinen Kollegen am Institut für Customer Insight für das häufige Korrekturlesen zahlreicher Manuskripte und die wundervolle Zeit bedanken. Ihr seid mir echte Freunde geworden: Dr. Christian Hauner, Dennis Esch, Dr. Johanna Gollnhofer, und Dr. Silke Blumer. Besonders hervorheben möchte ich meine Zimmer-Kollegen Dr. Emanuel de Bellis und Dr. Lucas Beck, die mich am Institut für Customer Insight so herzlich willkommen geheissen haben, sowie Alexander Schulte-Mattler, Daniel Boller und Maik Walter, die die letzten Jahre meine täglichen Wegbegleiter waren. Danke Euch für die zahlreichen Diskussionen und geselligen Mittagessen. Gerne möchte ich mich an dieser Stelle auch bei Arlette Niedermann, Dr. Klaus Edel, Manuela Spirig und Veronika Hauser für die technische, administrative und organisatorische Unterstützung bedanken.

Ganz herzlich danken möchte ich meinen Freunden, die stets Verständnis dafür hatten, dass ich mal wieder keine Zeit für Sie hatte. Ebenso danken möchte ich dem DocNet Vorstand 2014/2015 für die ausgezeichnete Zusammenarbeit. Unsere gemeinsamen Aktivitäten haben mir immer wieder einen guten Ausgleich zum Schreiben geboten.

Mein ausserordentlicher Dank gilt meiner Familieinsbesondere meinen Eltern Eugen und Barbara Turi, Geschwistern Eugen und Nanette, und Grosseltern, sowie meinen

Schwiegereltern Prof. Dr. Günter und Isabelle Müller-Stewens, meiner Schwägerin Bernadette und meinem Schwager Ferdinandfür ihre allgegenwärtige Unterstützung in jeder Phase der Dissertation. Ohne Euch wäre diese Erfahrung nicht möglich gewesen. Zu guter Letzt und von ganzem Herzen danke ich meinem Ehemann Benedikt Müller-Stewens, der von der ersten Idee bis hin zum Druck dieser Dissertation immer für mich da war, mich auch in schwierigen Zeiten motiviert hat und sich mit mir über jeden noch so kleinen Meilenstein gefreut hat. Ich bin unendlich glücklich Dich an meiner Seite zu haben.

Von Herzen widme ich meiner Familie diese Arbeit. St. Gallen, Dezember 2016 Jessica Müller-Stewens

Table of Contents

Abstract .......................................................................................................................... 1

Zusammenfassung......................................................................................................... 2

Introduction ................................................................................................................... 3

Gamification in Marketing Jessica Müller-Stewens

Article I ........................................................................................................................ 17

The Gamification Paradigm Tobias Schlager, Jessica Müller-Stewens, Gerald Häubl, Andreas Herrmann

Article II ....................................................................................................................... 57

Gamified Information Presentation: Conveying Product Information Through Games Promotes Consumer Adoption of Product Innovations Jessica Müller-Stewens, Tobias Schlager, Gerald Häubl, Andreas Herrmann

Article III ..................................................................................................................... 95

Wenn der Flow überspringt – Produktnahe Spiele als Umsatzlieferant Jessica Müller-Stewens

Curriculum Vitae ...................................................................................................... 109

1

Abstract Over the last decade, the integration of games and game elements into consumer-firm interactions, which is termed gamification, has increased substantially. Despite its frequent use in consumer-firm interactions, scientific research on gamification in a marketing context is still in its infancy. However, a profound understanding of gamification is necessary in order to implement it successfully.

This dissertation consists of three (one conceptual and two empirical) articles that provide in-depth insights into the use of games and game elements in a marketing context and thus advance our understanding of this phenomenon. The insights of this dissertation lay the foundation of further research on gamification in marketing and provide marketing practitioners with implications about when and how to most effectively implement gamification solutions.

Article 1: Based on goal-systems theory (Kruglanski et al. 2002) and reversal theory (Smith and Apter 1975), this article derives a conceptualization of gamification in the marketing context and develops a set of testable propositions. Moreover, this article proposes a new consumer-firm interaction paradigm that has consequences for both marketing theory and practice.

Article 2: This article examines the effect of presenting information about a product innovation, which is integrated into a game (i.e., gamified information presentation), on innovation adoption. Evidence from seven experiments (including two field experiments) shows that such a gamified information presentation increases innovation adoption, since consumers realize the innovation’s advantages over established products (as information can be presented more vividly) and become more curious about it (as consumers become more playful).

Article 3: The last article characterizes product-related games and examines their economic consequences. Evidence from three experiments (including one field experiment) shows that product-related games increase revenue by providing flow experiences. This effect is attenuated by consumers’ opportunity costs of time.

2

Zusammenfassung In den vergangenen zehn Jahren hat die Integration von Spielen und Spielelementen in die Konsumenten-Unternehmen Interaktion, das sogenannte Gamification, erheblich an Bedeutung gewonnen. Obwohl Gamification bereits häufig in der Konsumenten-Unternehmen Interaktion eingesetzt wird, befindet sich die wissenschaftliche Forschung hierzu noch in ihren Anfängen. Für die erfolgreiche Verwendung von Gamification ist jedoch ein profundes Verständnis des Phänomens erforderlich.

Die vorliegende Dissertation fördert anhand eines tiefen Einblicks in die Verwendung von Spielen und Spielelementen im Marketingkontext das Verständnis dieses Phänomens. Die Erkenntnisse aus dem konzeptionellen sowie aus den zwei empirischen Artikeln dieser Dissertation bilden eine Grundlage für zukünftige Forschung über Gamification im Marketing. Zudem beinhalten sie Implikationen hinsichtlich der Fragen, wann und wie Gamification in der Praxis am effektivsten eingesetzt werden kann.

Artikel 1: Basierend auf der Zielsystem-Theorie (Kruglanski et al. 2002) und der Reversal-Theorie (Smith and Apter 1975) konzeptualisiert dieser Artikel Gamification im Marketingkontext und entwickelt eine Reihe von testbaren Propositionen. Zudem schlägt dieser Artikel ein neues Paradigma der Konsumenten-Unternehmen Interaktion, das Konsequenzen für die Marketingtheorie und -praxis mit sich bringt, vor.

Artikel 2: Dieser Artikel untersucht den Effekt einer gamifizierten Informations-präsentation—das heisst einer Präsentation von Informationen über eine Produkt-innovation, die in ein Spiel integriert ist—auf die Innovationsadoption. Mithilfe von sieben Experimenten (inklusive zweier Feldexperimente) wird gezeigt, dass eine solche gamifizierte Informationspräsentation die Innovationsadoption steigert, weil die Konsumenten die Vorteile der Innovation gegenüber etablierten Produkten eher erkennen (da die Information besser veranschaulicht werden kann) und sie neugieriger auf die Innovation werden (da die Konsumenten verspielter werden).

Artikel 3: Der letzte Artikel charakterisiert produktnahe Spiele und untersucht ihre ökonomischen Konsequenzen. Mithilfe von drei Experimenten (inklusive eines Feldexperimentes) wird gezeigt, dass produktnahe Spiele den Umsatz steigern, indem sie Flow-Erlebnisse hervorrufen. Dieser Effekt wird allerdings durch die zeitlichen Opportunitätskosten der Konsumenten gehemmt.

Introduction

3

Introduction

Gamification in Marketing

In recent years, video games have become a highly popular leisure time activity. About 1.98 billion people worldwide play video games (Newzoo 2016a) and the global game market revenue is expected to reach $118.6 billion (USD) by the end of 2019 (Newzoo 2016b). Playing games is a fun and engaging experience; games catch the players’ attention and absorb them in game play (Csikszentmihalyi 1975, 1990). Thus, people spend a lot of time playing games: on average, they play for four hours per week (PwC 2012).

As the cost of grabbing consumers’ attention with advertising campaigns rises continuously (Teixeira 2014), marketing practitioners have started to exploit the mechanisms that make games fun to play in order to capture consumers’ attention and to reach their corporate objectives. The integration of games and/or game elements (e.g., points, rankings, challenges) into consumer-firm interactions is often termed gamification. On an abstract level, scholars have defined this phenomenon as “the use of game design elements in non-game contexts” (Deterding et al. 2011, p. 10).

A broad variety of examples of how games and game elements are used in practice—along all phases of the purchase process—exist (see Figure 1). For example, Autodesk Inc. gamified the trial version of their software 3dsMax by intertwining the use of the software with several missions to be solved. Trial usages increased by 54 percent, and revenue increased by 29 percent (Social Media Explorer 2012). The car manufacturer MINI gamified the introduction of its new SUV model (MINI Countryman) by creating a competition among consumers—the MINI Getaway. Participants had to track down a virtual MINI car in Stockholm in order to get a chance to win a real car. In the subsequent six months of this competition, sales of all MINI car models increased by 92 percent year-on-year (D&AD 2011).

However, there is evidence that gamification implementations fail (e.g., Hamari 2013). For example, SAP had to redesign its gamified community network several times, because the game elements that were used were not able to raise user engagement. After redesigning, consumer activity rose by 400 percent and community feedback increased by 96 percent (Cetin 2013). Thus, to implement gamification successfully, a profound

Introduction

4

understanding of the game elements, the psychological processes that govern this phenomenon, and the factors influencing these psychological processes is necessary.

Post-Purchase Purchase Pre-Purchase

Source: Bunchball (2016), D&AD (2011), icollectstarwars.com (2015), Monterosa (2011), Salesforce (2013), USA Network (2016)

Club Psych • goal: deepen fan

engagement • result: 30%

increase in site traffic

Are you a human? • goal: decrease

dropout rates • result: 60%

increase in conversion rate

Feed the baby.

MINI Getaway • goal: generate

desire for product • result: 92%

increase in overall sales

More Examples: • Jay-Z Decoded • VW BlueMotion

Roulette • CatchAChoo • The North Face

Never Stop Exploring

More Examples: • Ovomaltine SUP

Game • Aldo’s Mood

Board • Buffalo Wild

Wings • Lagos Quiz

More Examples: • Savannah

Morning Star • Tabasco Nation • Nike+ and

Fuelbands • Microsoft

Ribbon Hero

MINI Getaway: MINI introduced its new SUV model—the MINI Countryman—by creating a competition among consumers. Participants had to track down a virtual MINI in Stockholm (Sweden) and defend it against competitors, in order to get a chance to win a real car.

Are you a human?: Websites usually use Captchas to ensure that a website visitor is human. Are you a human? replaces the entering of letters with playing a short and simple game, as for example, finding the right meal to feed a baby.

Club Psych: Members can win prizes by completing several challenges. Points are earned for taking quizzes, playing games, sharing content on social networks, and watching videos.

Description of Examples:

Figure 1: Gamification Examples Throughout the Purchase Process

YOU MINI

Find the Pineapple

Introduction

5

Three Articles on Gamification in Marketing Although gamification is already heavily used in practice, little scholarly work on gamification in a marketing context exists (e.g., Müller-Stewens et al. 2015; Schlager et al. 2014). Most of these articles deal with defining the phenomenon. For example, in the context of consumer behavior, gamification is defined as “the Process of game-thinking and game-mechanics to engage the consumer in the non-gaming context of shopping in order to drive engagement and enhance the process of behavioral shift” (Lounis, Neratzouli, and Pramatari 2013, p. 201). In a service marketing context, gamification is defined as a “process of enhancing a service with affordances for gameful experiences in order to support user’s overall value creation” (Huotari and Hamari 2012, p. 19). Other articles focus either on comparing gamification to related concepts (Bui, Veit, and Webster 2015) or on deeply examining single aspects of gamification, for example, social factors that motivate the use of gamification, as studied by Hamari and Koivisto (2015). However, an article that rigorously conceptualizes gamification in a marketing context is still missing. Article 1 of this dissertation addresses this concern. Based on goal-systems theory (Kruglanski et al. 2002) and reversal theory (Smith and Apter 1975), a conceptualization of gamification in the marketing context is derived. Mainly building on the constructs of immersion and goal congruence, a set of testable propositions on the effects of gamification in consumer-firm interactions—along all phases of the purchase process—is developed. Moreover, Article 1 outlines a new consumer-firm interaction paradigm and explains its consequences for both marketing theory (i.e., interactions as source of utility, metaphoric interactions, performance-contingent scarcity, and ephemeral encounters) and practice (i.e., differentiation by extraordinary experiences, indirect engagement, consumer competition, and momentary advantage).

The following two articles complement the conceptual article by testing the use of games and game elements in a marketing context (see Figure 2).

Article 2 uses games to address a prevailing concern in marketing theory and practice, that is, the high failure rates of innovations (Asplund and Sandin 1999; Gourville 2006). In order to improve the communication of innovations, which is a central determinant of innovation adoption (Reinders, Frambach, and Schoormans 2010), information about the innovation is integrated into a game. Hence, consumers can actively experience the innovation in the game. Thus, Article 2 introduces a new format of presenting information about a product innovation, which can help firms to overcome key barriers

Introduction

6

to innovation adoption. Evidence from seven experiments (including two field experiments) demonstrates that such a gamified information presentation increases innovation adoption, since consumers realize the innovation’s advantages compared to established products (as information can be presented more vividly) and become more curious about it (as consumers become more playful).

Figure 2: Solving the Puzzle of Gamification in Marketing

Finally, Article 3 characterizes and contrasts product-related games—which are games that are tightly connected to the consumer-firm interaction—to other implementations of games and game elements in marketing practice (i.e., points and badges such as loyalty programs and in-game product placement such as advertising banners in video games). Article 3 examines the effectiveness of such product-related games in increasing revenue and the underlying psychological process (i.e., flow, Csikszentmihalyi 1975, 1990). The findings of three studies (including one field experiment) show that product-related games increase revenue by eliciting flow experiences. This effect is attenuated by consumers’ opportunity costs of time, since they reduce the flow eliciting effect of games.

Gamified Information Presentation: Conveying Product Information

Through Games Promotes Consumer Adoption of Product Innovations

Testing gamified information presentation as measure to

increase innovation adoption.

Wenn der Flow überspringt – Produktnahe Spiele als

Umsatzlieferant Testing product-related games as measure to increase revenue and

consumers’ opportunity costs of time as moderator.

The Gamification Paradigm Conceptualizing gamification and

deriving a new consumer-firm interaction paradigm.

Article 1 Conceptual Article

Article 2 Empirical Article

Article 3 Empirical Article

Gamification in

Marketing

Introduction

7

For a more detailed overview (i.e., title, authors, abstract, keywords, status) of the three articles of this dissertation, please refer to the tables (Table 1 to 3) listed in the Appendix of this introduction.

Conclusion and Implications The three articles of this dissertation advance our understanding of gamification in a marketing context and provide evidence that the integration of games and game elements significantly influences consumer-firm interaction outcomes. The findings of this dissertation address a broad audience. Researchers as well as firms (across industries) and consumers also benefit from the insights. Practical Implications

Overall, the three articles of this dissertation propose that firms can use games or game elements along all phases of the purchase process to facilitate the attainment of their corporate objectives.

Article 1 proposes that firms can use gamified interactions to acquire new customers, to increase conversion rates, to facilitate cross- or upselling of products, to create favorable as well as engaging interaction experiences, and to stimulate repeated interactions with their customers.

Moreover, the results of Article 2 show that gamified information presentation can be used to overcome barriers to innovation adoption and thus promote the adoption of new products. Improved innovation adoption provides benefits for firms and their customers alike: For firms, the continuous improvements and market launches of products play a key role for their ongoing business performance (Banbury and Mitchell 1995; Henard and Dacin 2010). For their customers, these innovations may provide benefits over established products as they, for example, provide enhanced functionality.

However, the findings of Article 3 demonstrate that not every gamified interaction is going to be successful in reaching the intended objectives. Firms have to be aware of key design principles that make games fun to play, and they need to consider product characteristics as well as individual factors that affect the success of gamification. Thus, marketing practitioners should collaborate with experienced game designers and pre-test the intended gamification implementation before releasing it on their website.

Introduction

8

Since gamification provides far more opportunities and challenges for firms, as mentioned here, this discussion of practical implications is not conclusive. For a more detailed discussion of practical implications, please refer to each respective article. Theoretical Implications and Future Research

The three articles of this dissertation primarily contribute to research on games and game elements in a marketing context (e.g., Hamari 2013; Schlager et al. 2014). By conceptualizing gamification in a marketing context, deriving a set of testable propositions, and outlining the implications for consumer-firm interactions, Article 1 lays the conceptual foundation of research on gamification in a marketing context. Building on this foundation, the following two empirical articles test particular applications of gamification in the field (and in a more controlled setting). Article 2 shows that games can be used—besides creating enjoyable product or brand experiences—to more effectively communicate information about product innovations to consumers. The findings of Article 3 provide deeper insights into the economic consequences and into factors that influence the effectiveness of product-related games in a marketing context. Overall, the three articles create a basis for future research on games and game elements in a marketing context.

Still, there are plenty of open questions that future research should address, and two key issues are outlined below. First, research has only started to examine the unique effects of game elements in a marketing context (e.g., Schlager et al. 2014; Kuo and Rice 2015). However, the possibilities of combining game elements are manifold. For example, combining rewards and social elements by making the rewards visible to other players could be highly motivating, because then consumers’ achievements can be acknowledged by other consumers (Kapp 2012). This can motivate consumers, for example, to re-engage with a firm’s website. In contrast, if consumers score low on these rewards, they do not get the social recognition for which they strive. This might deter consumers from continuously visiting a website. In order to gain a better understanding of the effects of integrating games and game elements into consumer-firm interactions, future research should not only examine the effects of single game elements but also address the interaction effects of multiple game elements.

Second, not every context is equally suitable for implementing gamified interactions, since product characteristics and/or individual factors may dampen or heighten the effectiveness of gamification. For example, consumers might differ in their game playing experience and thus may react differently to games and game elements that are

Introduction

9

integrated into the consumer-firm interactions. Prior research demonstrated that experienced players are less distracted by games (Schneider and Cornwell 2005). Hence, if games are integrated into the consumer-firm interaction to facilitate consumers’ learning about a product or a brand, experienced consumers should learn more than inexperienced consumers, as the former get less distracted by the game. Future research should examine the role of the game playing experience as well as further moderators and boundary conditions of the effect of gamification on consumer-firm interaction outcomes.

As the three articles of this dissertation build on various psychological theories (e.g., goal-system theory, Kruglanski et al. 2002; reversal theory, Smith and Apter 1975; flow theory, Csikszentmihalyi 1975, 1990) and focus on various outcomes (e.g., innovation adoption, revenue) in different situations (e.g., degree of information-game integration, opportunity costs of time), the contributions of this dissertation are multifaceted and are not restricted to game research in marketing. For a detailed discussion of the theoretical contributions of each article and future research directions, please refer to each respective article.

Introduction

10

References Asplund, M. and R. Sandin (1999), “The survival of new products,” Review of Industrial

Organization, 15 (3), 219–37.

Banbury, C. M. and W. Mitchell (1995), “The effect of introducing important incremental innovations on market share and business survival,” Strategic Management Journal, 16 (S1), 161–82.

Bui, A., D. Veit, and J. Webster (2015), “Gamification – A novel phenomenon or a new wrapping for existing concepts?,” Thirty Sixth International Conference on Information Systems, Fort Worth, (accessed May 25, 2016), [available at: http://aisel.aisnet.org/ecis2014/proceedings/track01/4/].

Bunchball (2016), “How USA Network boosted viewer loyalty and revenues for Psych,” (accessed April 22, 2016), [available at: http://www.bunchball.com/ customers/club-psych].

Cetin, L. (2013), “The SAP Community Network: How to Use Gamification to Increase Engagement,” (accessed June 6, 2014), [available at: http://enterprise-gamification.com/index.php/en/social-media/160-the-sap-community-network-how-to-use-gamification-to-increase-engagement].

Csikszentmihalyi, M. (1975), Beyond Boredom and Anxiety: The Experience of Play in Work and Games. San Francisco: Jossey-Bass.

——— (1990), Flow: the Psychology of Optimal Experience. New York: Harper Perennial.

D&AD (2011), “Mini Getaway,” (accessed April 22, 2016), [available at: http:// www.dandad.org/en/mini-getaway/].

Deterding, S., D. Dixon, R. Khaled, and L. Nacke (2011), “From game design elements to gamefulness: defining gamification,” in MindTrek ’11 Proceedings of the 15th International Academic MindTrek Conference, New York: ACM, 9–15.

Gourville, J. T. (2006), “Eager Sellers & Stony Buyers,” Harvard Business Review, 84 (6), 98–106.

Hamari, J. (2013), “Transforming homo economicus into homo ludens: A field experiment on gamification in a utilitarian peer-to-peer trading service,” Electronic Commerce Research and Applications, 12 (4), 236–45.

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——— and J. Koivisto (2015), “Why do people use gamification services?,” International Journal of Information Management, 35 (4), 419–31.

Henard, D. H. and P. A. Dacin (2010), “Reputation for Product Innovation: Its Impact on Consumers,” Journal of Product Innovation Management, 27 (3), 321–35.

Huotari, K. and J. Hamari (2012), “Defining Gamification – A Service Marketing Perspective,” in MindTrek ’12 Proceedings of the 16th International Academic MindTrek Conference, New York: ACM, 17–22.

icollectstarwars.com (2015), “Affordable Captcha service,” (accessed April 22, 2016), [available at: http://www.icollectstarwars.com/category/internet/].

Kapp, K. M. (2012), The gamification of learning and instruction: game-based methods and strategies for training and education. San Francisco: Pfeiffer.

Kruglanski, A. W., J. Y. Shah, A. Fishbach, R. Friedman, W. Y. Chun, and D. Sleeth-Keppler (2002), “A theory of goal systems,” Advances in Experimental Social Psychology, 34, 331–78.

Kuo, A. and D. H. Rice (2015), “Catch and shoot: The influence of advergame mechanics on preference formation,” Psychology & Marketing, 32 (2), 162–72.

Lounis, Stavros, Xanthippi Neratzouli, and Katerina Pramatari (2013), “Can Gamification Increase Consumer Engagement? A Qualitative Approach on a Green Case,” in Collaborative, Trusted and Privacy-Aware e/m-Services: IFIP Advances in Information and Communication Technology, Christos Douligeris, Nineta Polemi, Athanasios Karantjias, and Winfried Lamersdorf, eds. Berlin Heidelberg: Springer, 200–12.

Monterosa (2011), “MINI Getaway Stockholm,” (accessed April 22, 2016), [available at: http://wpdev.monterosa.se/cases/mini-getaway].

Müller-Stewens, J., A. Herrmann, T. Schlager, and M. Riedi (2015), “Gamification,” WiSt – Wirtschaftwissenschaftliches Studium, 44 (7), 12–6.

Newzoo (2016a), “Newzoo launches online dashboard with games market & company revenues,” (accessed April 29, 2016), [available at: https://newzoo.com/ news/newzoo-launches-online-dashboard-with-games-market-company-revenues/].

——— (2016b), “The global games market reaches $99.6 billion in 2016, mobile generating 37%,” (accessed April 29, 2016), [available at: https://newzoo.com/

Introduction

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insights/articles/global-games-market-reaches-99-6-billion-2016-mobile-generating-37/].

PwC (2012), “The evolution of video gaming and content consumption,” (accessed April 29, 2016), [available at: https://www.pwc.com/us/en/industry/ entertainment-media/publications/assets/pwc-video-gaming-and-content-consumption.pdf].

Reinders, M. J., R. T. Frambach, and J. P. L. Schoormans (2010), “Using Product Bundling to Facilitate the Adoption Process of Radical Innovations,” Journal of Product Innovation Management, 27 (7), 1127–40.

Salesforce (2013), “PlayThru: A Captcha alternative from Are You a Human,” (accessed April 22, 2016), [available at: https://developer.salesforce.com/page/ PlayThru:_A_CAPTCHA_Alternative_from_Are_You_a_Human].

Schlager, T., C. Hildebrand, G. Häubl, and A. Herrmann (2014), “Product Gamification,” in Advances in Consumer Research Volume 42, June Cotte and Stacy Wood, eds. Duluth, MN: Association for Consumer Research, 664–5.

Schneider, L. P. and T. B. Cornwell (2005), “Cashing in on crashes via brand placement in computer games: The effects of experience and flow on memory,” International Journal of Advertising, 24 (3), 321–43.

Smith, K. C. P. and M. J. Apter (1975), A Theory of Psychological Reversals. Chippenham: Picton Press.

Social Media Explorer (2012), “Autodesk scores a home run with gamification,” (accessed June 6, 2014), [available at: http://www.socialmediaexplorer.com/ social-media-measurement/autodesk-scores-a-home-run-with-gamification/].

Teixeira, T. S. (2014), “The rising cost of consumer attention: Why you should care, and what you can do about it,” Harvard Business School Working Paper 14-055.

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Appendix Table 1: Overview Article 1

Article 1

Title The Gamification Paradigm

Authors Tobias Schlager, Jessica Müller-Stewens, Gerald Häubl, Andreas Herrmann

Abstract This article presents a framework for examining the consequences of incorporating game elements into consumer-firm interactions. We conceptualize the gamification of consumer-firm interactions and develop a set of testable propositions about its effects on various important marketing outcomes. Consumers’ reactions to gamified interactions—positive (such as process completion) and negative (such as distraction from the process)—depend primarily on the extent to which they become immersed in the gamified interactions and on the degree to which the incorporated game elements (i.e., the game layer) correspond with their goals (i.e., goal congruence). While goal congruence is the main determinant for whether consumers initiate a gamified interaction and whether they complete the core interaction process, immersion is the main determinant for consumer engagement and extraordinary experiences that result in repeated interactions with the firm. These implications converge to what we call the “gamification paradigm.” In this section, we pinpoint ideas that entail substantial consequences for marketing theory and marketing practice because key principles of gamification challenge the current view of consumer-firm interactions.

Key-words

gamification, consumer-firm interactions, immersion, congruence, gamification paradigm

Status • Institute for Customer Insight (ICI-HSG) Working Paper Series • Preparing for submission to the Journal of Marketing

Introduction

14

Table 2: Overview Article 2

Article 2

Title Gamified Information Presentation: Conveying Product Information Through Games Promotes Consumer Adoption of Product Innovations

Authors Jessica Müller-Stewens, Tobias Schlager, Gerald Häubl, Andreas Herrmann

Abstract This research examines the effect of conveying information about a product innovation in the form of a game on consumer adoption of that innovation. The authors conceptualize such gamified information presentation as being characterized by two essential properties—(1) interactivity and (2) integration of product information into a game. The key hypothesis is that gamified information presentation promotes consumer innovation adoption, and that it does so via two parallel psychological processes—by stimulating consumer curiosity about the innovation and by increasing the perceived advantage of the innovation relative to (less innovative) competing products. Evidence from seven studies, including two field experiments, supports this theorizing by showing that gamified information presentation boosts innovation adoption via the two proposed processes. Moreover, the results demonstrate that both interactivity and information-game integration must be present for gamified information presentation to increase innovation adoption. The current findings advance our understanding of the psychological forces that govern gamified information presentation, and have important practical implications for how firms might use gamified information presentation to promote sales of new products.

Key-words

consumer adoption of product innovations, information presentation, games, curiosity, relative advantage

Status • Institute for Customer Insight (ICI-HSG) Working Paper Series • Conference Contribution at

o Theory + Practice in Marketing (TPM) 2015 o Association for Consumer Research (ACR) Asia-Pacific Conference

2015 o Association for Consumer Research (ACR) North American

Conference 2015

• Submitted to the Journal of Marketing, 2nd round—awaiting review

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Table 3: Overview Article 3

Article 3

Title Wenn der Flow überspringt – Produktnahe Spiele als Umsatzlieferant

Authors Jessica Müller-Stewens

Abstract Obwohl produktnahe Spiele in der Marketing-Praxis zunehmend an Bedeutung gewinnen, besteht über ihre ökonomischen Konsequenzen noch weitgehend Unklarheit. Dieser Beitrag charakterisiert produktnahe Spiele und untersucht ihre ökonomischen Konsequenzen. Anhand von Felddaten wird gezeigt, dass produktnahe Spiele umsatzsteigernd wirken. Zudem wird der psychologische Prozess dahinter erklärt und es werden zentrale Stellschrauben für die Wirksamkeit produktnaher Spiele aufgezeigt.

Key-words

Flow Erlebnis, Umsatzsteigerung, zeitliche Opportunitätskosten, Spiele

Status • Institute for Customer Insight (ICI-HSG) Working Paper Series • Submitted to the Marketing Review St. Gallen—awaiting review

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The Gamification Paradigm

TOBIAS SCHLAGER

JESSICA MÜLLER-STEWENS GERALD HÄUBL

ANDREAS HERRMANN Tobias Schlager is a Postdoctoral Researcher in Marketing at the Center for Customer Insight, University of St. Gallen, Bahnhofstrasse 8, CH-9000, St. Gallen, Switzerland (tobias.schlager@unisg.ch). Jessica Müller-Stewens is a Doctoral Student in Marketing at the Center for Customer Insight, University of St. Gallen, Bahnhofstrasse 8, CH-9000, St. Gallen, Switzerland (jessica.mueller-stewens@unisg.ch). Gerald Häubl is Canada Research Chair in Behavioral Science and Professor of Marketing at the University of Alberta and Research Professor in Consumer Behavior at the University of St. Gallen (gerald.haeubl@ualberta.ca). Andreas Herrmann is Professor of Marketing at the Center for Customer Insight, University of St. Gallen, Bahnhofstrasse 8, CH-9000, St. Gallen, Switzerland (andreas.herrmann@unisg.ch).

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Abstract This article presents a framework for examining the consequences of incorporating game elements into consumer-firm interactions. We conceptualize the gamification of consumer-firm interactions and develop a set of testable propositions about its effects on various important marketing outcomes. Consumers’ reactions to gamified interactions—positive (such as process completion) and negative (such as distraction from the process)—depend primarily on the extent to which they become immersed in the gamified interactions and on the degree to which the incorporated game elements (i.e., the game layer) correspond with their goals (i.e., goal congruence). While goal congruence is the main determinant for whether consumers initiate a gamified interaction and whether they complete the core interaction process, immersion is the main determinant for consumer engagement and extraordinary experiences that result in repeated interactions with the firm. These implications converge to what we call the “gamification paradigm.” In this section, we pinpoint ideas that entail substantial consequences for marketing theory and marketing practice because key principles of gamification challenge the current view of consumer-firm interactions.

Keywords: gamification, consumer-firm interactions, immersion, congruence, gamification paradigm

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In the past decade, there has been a revolution in how consumers and firms interact. Firms widely apply the phenomenon of gamification when designing interactions with consumers such that these interactions increasingly reflect the trend toward fun, ludic, experiential, and hedonic aspects (Arnold et al. 2005; Hirschman and Holbrook 1982; Holbrook 2006; Holbrook and Hirschman 1982; Mathwick and Ridgon 2004; Pine and Gilmore 1998; Schmitt, Brakus, and Zarantonello 2015; Schmitt 1999; Schmitt and Zarantonello 2009).

Prior work defined gamification as “the use of game design elements in non-game contexts” (Deterding et al. 2011, p. 10), which—in our case—are the interactions between consumers and firms. Gamification uses games and game elements such as leaderboards, level structures, avatars, and competition among consumers to motivate behavioral consequences in non-game contexts. This phenomenon has become a hot topic for firms: gamification is expected to grow by 48 percent until 2019 (Technavio 2015), and a vast number of firms, such as Adobe, eBay, Walgreens, and Ford, have started using it (Zichermann 2013). According to Brian Burke, vice president of research at Gartner, the possibilities of gamification are promising, and it “could become as important as Facebook, eBay or Amazon” (Gartner 2011). Despite its popularity among practitioners, little scholarly work has been concerned with gamification; there are two main reasons for this in addition to gamification’s novelty. First, there is a vast variety of gamification applications, ranging from barely noticeable game elements to applications that resemble full games (for an overview see Hamari, Koivisto, and Sarsa 2014). Second, gamification appears in multiple contexts, with goals ranging from engaging employees (Mollick and Rothbard 2013), to motivating individuals to learn (Muntean 2011), to prompting consumer purchases (Schlager et al. 2014; Müller-Stewens et al. 2015). In the marketing domain, gamification is most commonly applied to structuring consumer-firm interactions to create business-relevant outcomes, such as higher consumer engagement (Berger, Herrmann, and Schlager 2015), greater brand awareness, more positive brand perceptions (Van Reijmersdal, Rozendaal, and Buijzen 2012), higher loyalty (Zichermann and Cunningham 2011), higher product valuation (Lounis, Neratzouli, and Pramatari 2013), and higher purchase rates (Schlager et al. 2014; Müller-Stewens et al. 2015).

This article focuses on the role of gamification in consumer-firm interactions (e.g., Ramani and Kumar 2008). The three main objectives of this paper are (1) to rigorously conceptualize gamified interactions, (2) to characterize their effects on consumer-firm interactions, and (3) to address their implications for key concepts in marketing theory

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and practice. The central idea of this article is that key principles of gamified interactions challenge the current view of consumer-firm interactions and that these principles require further reflection on marketing theory and practice. In particular, the unique characteristics of gamified interactions have substantial consequences for consumer-firm interactions.

The paper makes several contributions. First, it clarifies the nature and conceptual boundaries of gamified interactions by providing a rigorous conceptualization. The paper develops a set of propositions about important marketing outcomes and it culminates by proposing a new paradigm for consumer-firm interactions. This paradigm consists of four ideas each for marketing theory (i.e., metaphoric interactions, interactions as a source of utility, performance-contingent scarcity, and ephemeral encounters) and practice (i.e., extraordinary experiences as primary driver of differentiation, indirect engagement, consumer competition, and momentary advantage), all of which are based on the coexistence of games or game elements with core consumer-firm interactions.

Gamified Consumer-Firm Interactions: The Coexistence of Two Realms A key objective of marketing scholars and practitioners has long been to understand the interactions between consumers and firms and to design these interactions to be mutually beneficial. Traditional consumer-firm interactions are characterized by a relational exchange of resources that supports both parties, the consumer and the firm, in reaching their objectives (Ramani and Kumar 2008). These core interactions between firms and consumers are commonly direct and their purpose is apparent to each party (see Figure 1A).

Gamified consumer-firm interactions involve a game layer that consists of games or game elements in addition to the core interaction process. This game layer coexists with the primary layer of the core interaction process (see Figure 1B). Notably, the actions of consumers and firms in the game layer may have consequences for the core interaction process (just as any activity in meaningful play has a significant function, Caillois 1958; Huizinga 1949). Gamified interactions are less direct than standard consumer-firm interactions because consumers and firms interact via this game layer.

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Figure 1: (A) Traditional and (B) Gamified Consumer-Firm Interactions

The Consequences of Gamified Consumer-Firm Interactions

Based on reversal theory (Apter 1981, 1984; Smith and Apter 1975), we propose that the extent to which consumers become immersed in gamified interactions is important to understanding consumer responses to gamified interactions. The central game elements, which influence immersion, are rewards (e.g., points, levels, or leaderboards), challenges (e.g., obstacles, competition with a computer or other consumers), interactivity (e.g., feedback, personalized avatar), and multisensory elements (e.g., sounds, vibrations, McGonigal 2011). We call these the structural characteristics of the game layer and propose that they essentially affect the outcomes of gamified consumer-firm interactions.

Moreover, we draw on goal systems theory (Kruglanski et al. 2002) to propose that the consequences of gamified interactions depend on the relationship between the game layer and consumers’ goals (i.e., low vs. high congruence of both realms). This dimension, congruence, best captures the coexistence between the game layer and the the primary layer of the core interaction process. We call this relationship the configural

Consumer Firm

Consumer Firm

Core Interaction Process

Interaction with

A

B Game Layer

Primary Layer

Game (Elements)

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characteristics and propose that they essentially affect the outcomes of gamified consumer-firm interactions.

Immersion and its Antecedents Various constructs have been used to describe individuals’ experiences during game play. Consistent with reversal theory (Apter 1981, 1984; Smith and Apter 1975), we propose that immersion, defined as the “experience of becoming engaged in the game-playing experience” (Brockmyer et al. 2009, p. 624) captures consumers’ responses to gamified interactions. Immersion describes the captivation of individuals who physically or virtually experience an activity (Biocca and Delaney 1995). Literature distinguishes between three types of immersion—sensory, imaginative, and challenge-based immersion—which directly relate to the structural characteristics of gamified interactions. For instance, sensory immersion describes the extent to which individuals become absorbed by “audiovisually impressive, three-dimensional and stereophonic worlds that surround their players in a very comprehensive manner” (Ermi and Mäyrä 2005, p. 7). Moreover, immersion can evolve to different levels, ranging from engagement to engrossment to total immersion (i.e., complete focus on the game layer, Brown and Cairns 2004; Ermi and Mäyrä 2005). These levels reflect the various manifestations of gamified interactions that range from subtle to nearly game-like applications. While immersion tends to be positive (e.g., it provides pleasure), it may also capture negative consequences, for instance, if consumers are highly immersed in the game realm, they might get distracted from the core interaction process. In sum, immersion seems to be well-suited to capturing consumers’ responses to gamified interactions. We propose that four structural characteristics, namely interactivity, multisensory elements, reward structure, and the presence of challenges determine the level of immersion. Notably, not all gamified interactions consist of all four characteristics, suggesting that gamified interactions differ in the extent to which they create immersion.

Degree of interactivity. Interactivity is defined as “the degree to which users of a medium can influence the form and content of the media environment” (Steuer 1995, p. 11) and increases an individual’s immersion in a task (Bown and Cairns 2004; Jin 2009). Steuer (1995) suggests three factors that enhance the interactivity of the game layer: the speed by which an action leads to a reaction, the range of possible actions, and the ability of the game layer to adapt to changes in the environment. An example of highly interactive gamified interactions is the Magnum Pleasure Hunt, which asks consumers

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to collect candies with an avatar. They have to move the avatar using the arrow keys of their keyboard and receive feedback when they successfully collect candy. In contrast, McDonald’s Monopoly (a game that gives consumers stickers when they buy McDonald’s products and rewards consumers with prizes) is less interactive. Consumers simply have to peel off and collect the stickers. As the game layer’s interactivity intensifies consumers’ immersion in the gamified interactions, gamified interactions like Magnum Pleasure Hunt should immerse consumers more than those like McDonald’s Monopoly.

Multisensory elements. Key structural elements of the game layer are the degree of animation and sensory complexity. Accordingly, so-called “multisensory elements” are central to consumers’ experiences (Ermi and Mäyrä 2014; Holbrook and Hirschman 1982; Song and Zinkhan 2008) and support the creation of sensory immersion (Ermi and Mäyrä 2005). If the game layer lacks these elements, consumers will be less immersed in the gamified interactions (Narayan et al. 2005). In the gamified interactions of VeloPlus, consumers need to complete several levels (i.e., distinct bicycle tracks) while receiving information about bike equipment that they can purchase in the firm’s online store. Each level features multiple audio (e.g., sounds of the bike), visual (e.g., multicolor tracks and animated backdrop), and tactile elements (e.g., feedback from the vibrations of the user’s mobile phone). In sum, the multisensory elements of this example of gamified interaction should immerse consumers.

Reward structure. Rewards are commonly classified as (1) given in any case (i.e., task-non-contingent); (2) dependent on the process (i.e., task-contingent); or (3) dependent on the outcome of the process (i.e., performance-contingent, Deci, Koester, and Ryan 2001). Prior work suggests that rewards differentially influence individuals’ intrinsic motivation (Deci and Ryan 1985; Reeve and Deci 1996) and thus their degree of immersion: task-contingent rewards are perceived as controlling consumers’ task behavior, and thus they tend to decrease intrinsic motivation. Performance-contingent rewards convey competence information that can offset or even outweigh the decrease in intrinsic motivation caused by the behavior controlling aspect. Thus, by highlighting competence, rewards that depend on individuals’ performance are likely to promote immersion (Ermi and Mäyrä 2005). In contrast, task-non-contingent rewards do not contain informational or controlling aspects and thus do not influence intrinsic motivation and immersion. Two structural characteristics of the game layer that exemplify the presence of performance-contingent rewards are rankings of the participating consumers and levels that can be achieved by the consumers’ performance.

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For example, Level Up uses a level structure to support the consumer in learning the software Photoshop. After reaching the highest level, consumers can earn a one-year-membership to the Adobe Creative Cloud, a service that gives access to a collection of software. The performance-contingent reward offered by Level Up should increase the extent to which consumers become immersed because it highlights competence aspects.

Challenges. Prior literature proposed that challenges make a task intrinsically more motivating (Inoue 2007; Locke and Latham 1990) and affect individuals’ immersion in it (Ermi and Mäyrä 2005). In everyday activities such as online information searching, challenges can create positive experiences (Mathwick and Rigdon 2004). Some game layers create challenges that consumers have to resolve before they are able to continue with the core consumer-firm interaction process. For instance, in order to immerse consumers in the presentation of the new Cayman GT4, Porsche challenged consumers’ knowledge in their gamified interaction Rebels, race on. Consumers had to correctly answer several quiz questions before they could play a video game with the Cayman GT4. The challenging elements of this example of a gamified interaction should immerse consumers.

P1a: Immersion is a function of the game layer’s (a) interactivity, (b) multisensory elements, (c) reward structure, and (d) challenges.

Congruence and its Antecedent(s) A key concept of games—meaningful play—highlights that any playful activity has a significant function (Caillois 1958; Huizinga 1949). In gamified interactions, meaningful play implies that any action in the game layer affects the core consumer-firm interaction process and supports consumers in reaching their goals in the interaction process. Prior work described such situational relevance, or what we propose, the congruence of the consumer-firm interaction goals as a key aspect of gamification (Nicholson 2012). We formally define congruence as the extent to which goals in the game layer correspond to the consumers’ goals in the core interaction process. If gamified interactions are congruent, consumers can—by means of their actions in the game layer—pursue their core interaction goals. In contrast, if gamified interactions are incongruent, the goals in the game layer do not correspond to the consumers’ goals in the core interactions.

While the factors that cause consumers to become immersed are straightforward, those determining congruence are less so because consumers’ goals are heterogeneous. We

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argue that one objective determinant of congruence is the integration of the game layer into the core interaction process (i.e., connecting the actions in both layers) because such a linkage is a prerequisite for consumers to proceed through the game layer and simultaneously reach their consumer-firm interaction goal. Specifically, even though consumers’ goals may be heterogeneous, gamified interactions tend to correspond to consumers’ goals when the game layer is seamlessly integrated into the core interaction process and thus any action in the game layer affects the core interaction process. An example of a highly integrated gamified interaction is Are You A Human?, which replaces Captchas (used to ensure a website visitor is human) with games. As consumers progress in their shopping process by advancing through the game layer, this instance of gamified interaction is highly integrated with the core interaction process and should thus correspond with consumers’ goals (e.g., advancing in the purchase process).

P1b: Congruence is a function of the extent to which the game layer is integrated into the core interaction process.

Determinants of Engaging in Gamified Interactions As “one only plays if and when one wishes to” (Caillois 1958, p. 7), consumers can choose between engaging in gamified interactions or declining such engagement. We propose that two consumer characteristics—the congruence of goals and consumers’ telicity—are central to this decision because consumers have not experienced the game prior to engaging in it.

Congruence of goals. Consumers’ decisions about engaging in game play should depend on whether they have interaction goals that are congruent with the goals in the game layer. Consumers with non-congruent interaction goals should be less likely to engage in game play (Köpetz et al. 2012; Kruglanski et al. 2002). In general, if consumers have a goal and are confronted with new goals, they may shield their primary goal. Thus, the presence of non-congruent interaction goals may increase the tendency of declining to play the game. In contrast, goals that are a means to attaining a primary goal result in individuals appraising them as more favorable (Kruglanski et al. 2002). Hence, high congruence should increase consumers’ inclination to engage with the game layer. For instance, the video game Holmenkollen Ski Jump is integrated into the presentation of information about Norway. Website visitors can assume the role of an athlete who participates in a ski jump tournament and compete against fellow website visitors. At the end of each round visitors receive additional information about Norway. If consumers want to learn about certain Norwegian sights directly (non-congruent goal:

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seek information), they should be less likely to start the game in contrast to website visitors who have congruent interaction goals (congruent goal: pastime experience). This suggests that whether or not consumers engage with the game depends on whether they perceive the game layer as congruent with their interaction goals.

P2a: Congruence increases consumers’ inclination to initiate gamified interactions.

Consumers’ telicity. The central tenet of reversal theory is that individuals seek experiences that correspond to their frame of mind and that they avoid experiences that do not match their current frame of mind (Apter 1981, 1984; Smith and Apter 1975). In a telic state, individuals are arousal avoidant, serious minded and they judge activities based on whether they support their goals. In contrast, in a paratelic state, individuals are playful, activity oriented, and arousal seeking (Sit and Lindner 2005). We propose that consumers’ telicity determines whether they decline gamified interactions or whether they become immersed in them. Gamified interactions are attractive for consumers in a paratelic state as these consumers are less goal focused and more open for such experiences. Telic consumers tend to react against engaging with the game layer. As consumers in this state are focused on their goals, much more effort is required to engage them (Apter 1984).

P2b: Telicity decreases consumers’ inclination to initiate gamified interactions. The Consequences of Gamified Consumer-Firm Interactions In line with prior work on consumer-firm interactions (e.g., Mathwick and Rigdon 2004; Yadav and Pavlou 2014), we examine the consequences of gamified consumer-firm interactions for the following areas: (1) search, (2) comparison and selection, (3) process completion, (4) interaction experience, (5) re-engagement.

Search. During the search phase consumers typically explore multiple products with the goal of forming a consideration set that corresponds to their preferences. In this phase, gamified interactions are distinct from non-gamified interactions as they increase the time consumers spend with a particular firm (and its offers) as well as consumers’ awareness of the latter. A high level of immersion engages consumers more deeply (both cognitively and emotionally) in the activity (Berger, Herrmann, and Schlager 2015) and focuses their attention on the activity while they forget other things (Csiksentmihalyi 1990). If consumers are highly engaged, they fully focus their attention on their actions in the game layer and do not realize the amount of time that has elapsed. Thus, immersion affects consumers’ time perception and makes them less time sensitive

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(Brown and Cairns 2004). As a result, the time that consumers spend with a particular firm and its offers increases. In addition, immersion ignites a second, distinct process that is similarly relevant during search. Immersion renders consumers open to novel things (Kashdan, Rose, and Fincham 2004). This openness may spill over to the consumer-firm interaction, if the game layer is integrated into this interaction. In this case, consumers search for new information and “play” with new products to fully capture their functionalities. Thus, congruence between the core interaction process and the game layer should further intensify this relationship. Overall, consumers are more exploratory when they are immersed, and they actively search for additional information about the product or brand to satisfy these exploratory tendencies. Thus, they are more aware of a firm’s offers. For example, the book Jay-Z Decoded was introduced using gamified interactions asking consumers to find the pages of the book that would soon be released. The gamified information search increased the time spent with the product (e.g., average player engagement time was over eleven minutes) and consumers’ exploratory behavior, which led to greater awareness of the book and brought it to third place on the New York Times bestseller list (MTV 2010). In sum, immersion generates engagement and should therefore increase the time consumers spend with a firm; immersion also creates exploratory attitudes that increase consumers’ awareness of the firm and its offers. Congruence intensifies the effect of immersion on both outcome variables.

P3a: Immersion increases the time consumers spend with a firm (as they become engaged).

P3b: Immersion increases consumers’ awareness of a firm and its offers (as they become more exploratory).

P3c: Congruence intensifies the effect of immersion on the time consumers spend with a firm and on consumers’ awareness of a firm and its offers.

Comparison and selection. In the comparison and selection phase, consumers form a consideration set, evaluate the offers in this set, and select the offer that best matches their needs. Typically, consumers first evaluate whether the basic characteristics of any offer match their preferences and then examine these offers in more detail (e.g., by comparing product features; Park and Smith 1989). We propose that gamified interactions affect which offers consumers consider purchasing and how many offers they compare.

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We propose that gamified interactions—and especially when they immerse consumers—should motivate consumers to consider innovative products over standard ones. Immersed consumers are more interested in trying out new things and are open to new offers (Hoffmann and Novak 1996). Moreover, immersion renders individuals more spontaneous and draws their focus to the “here and now” instead of on the consequences of a choice or action (Csikszentmihalyi 1990). Thus, we propose that consumers who are immersed become more interested in novel products, the performance of which might be relatively unknown or unfamiliar. Specifically, immersed consumers should be more inclined to adopt product innovations (Müller-Stewens et al. 2015) or newly introduced products, which tend to be more risky than products whose characteristics (e.g., performance) are already well known. Not surprisingly, many firms use gamified interactions to present their innovations with the objective of increasing consumer innovation adoption. For instance, to promote sustainability innovations, Volkswagen created its BlueMotion Roulette asking consumers to estimate the distance that the new Volkswagen BlueMotion can drive on one tank of fuel; more than 50,000 consumers participated (Ryan 2014). Moreover, consumers who are highly immersed are also more explorative and may discover products and brands that they would not have otherwise considered. For example, the online shop Bonobos created an online scavenger hunt, Bonobos’ Easter Egg, in collaboration with two other websites (www.notcot.org and www.not-couture.com). The task for consumers was to find a “little guy in paisley pants” on the websites to win the scavenger hunt. While engaging in this challenge and searching for the little guy in paisley pants, consumers become more explorative. Accordingly, immersion should render consumers more open to novel products and increase their inclination to form a consideration set that consists of innovative and unfamiliar products.

P4a: Immersion increases consumers’ inclination to form a consideration set that consists of innovative and unfamiliar rather than established and known products (as they are more explorative and open).

Reversal theory holds that individuals prefer actions and objects that fit their frame of mind (Apter 1981). Specifically, individuals who are playful should prefer a task that is playful over a task that is serious. Consistent with this notion, we propose that gamified interactions increase consumers’ preferences for some products over others. In particular, consumers who engage in gamified interactions and who become immersed in the game layer should be more likely to consider hedonic rather than utilitarian products. The consumption of utilitarian products is primarily driven by cognition and

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instrumentality. Thus, consumption of utilitarian products is aimed at accomplishing a functional task (Strahilevitz and Myers 1998; Voss, Spangenberg, and Grohmann 2003). In contrast, consuming hedonic products is primarily characterized by an affective experience of feelings, fantasy and fun (Hirschman and Holbrook 1982). This product classification is closely related to consumers’ experiences during gamified interactions. Specifically, gamified interactions are inherently compatible with hedonic consumption experiences. As consumers prefer products that align with their frame of mind (Apter 1981), which tends to be hedonic in gamified interactions, they should prefer hedonic to utilitarian products. Moreover, Böhm and Pfister (1996) showed that consumers tend to use utilitarian rather than hedonic product characteristics to justify their product choices. However, immersed consumers are less concerned about the consequences of their actions, and thus they should feel less need to justify their product choices with utilitarian product characteristics. Accordingly, we propose that gamified interactions, and especially those that immerse consumers, should render consumers more inclined to prefer hedonic over utilitarian products. As a result, consumers should tend to form a consideration set that mostly consists of hedonic (rather than utilitarian) products.

P4b: Immersion increases consumers’ inclination to form a consideration set that consists of hedonic rather than utilitarian products (as these match consumers’ frame of mind).

An important reason for firms to use gamified interactions is to promote their offers. When promoting offers by means of gamified interactions, firms have two basic options: they can either arrange the game layer such that it is congruent with consumers’ interaction goals (to highlight offers that the consumer has already tentatively considered), or such that it is incongruent (to highlight offers that the consumer has not considered at all). In the first case, the game layer further draws consumers’ focus to the tentatively considered offers and reduces their tendency to even consider other offers. This practice should ultimately lead to consumers forming rather smaller consideration sets. For example, in its gamified interactions, the Savannah Morning Star, an online newspaper, rewarded its readers for completing specific tasks (e.g., reading articles). If readers were interested in these articles either way (i.e., congruent game layer), they would score double by reading them, as they reached both the game’s goal and their interaction goal. At the same time, readers would not have considered other articles that the game layer did not reward. In contrast to a congruent game layer, an incongruent one would highlight offers that consumers had not even tentatively considered. If the game layer is incongruent, consumers may spontaneously desire these offers (Stroebe et

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al. 2008). Thus, by structuring the game layer such that it promotes offers that have not yet been considered, gamified interactions may broaden consumers’ consideration sets.

While our predictions for congruence are intuitive, those for immersion are less so. As argued, immersion increases the time consumers spend with a firm and its offers and facilitates exploratory attitudes and behavior. Nevertheless, we propose that immersion may prevent consumers from searching multiple offers and thus result in smaller consideration sets, just as congruent game layers do. Highly immersed individuals dedicate their attention to the activities in which they are immersed (Hoffmann and Novak 1996; Webster, Trevino, and Ryan 1993) and only remain somewhat aware of their surroundings (Brockmyer et al. 2009). As a result these individuals tend to disregard any activities other than those in which they are immersed. In the comparison and selection phase, such a focus would restrict the number of offers consumers consider, even though consumers are exploratory. Moreover, immersion is akin to high levels of involvement, which tend to dilute individuals’ capacity to explore further options (Csikszentmihalyi 1975; Hoffmann and Novak 1996). Thus, gamified interactions that are particularly immersive require resources that consumers then lack for considering further offers. In sum, we propose that immersion in the game layer makes consumers’ consideration sets smaller, as they focus on those offers associated with the game, and this practice is particularly resource intensive. For instance, at Never Stop Exploring by The North Face, the floor on which consumers stood disappeared while they were looking for a new jacket, and they had to climb up a wall to prevent themselves from falling on a soft floor mat, which appeared instead of the floor. Then, a jacket from the firm’s new collection appeared at the ceiling, and to obtain this jacket the consumers had to jump and grab it. This challenging experience immersed consumers, and they tended to focus only on that particular jacket (without considering other jackets). Thus, gamified interactions may result in smaller rather than broader consideration sets, as consumers may search for multiple different offers less persistently.

P4c: Congruence promotes the formation of smaller consideration sets (as consumers are more focused).

P4d: Immersion promotes the formation of smaller consideration sets (as consumers search less persistently).

Process completion. A main concern of firms, especially in an online context, where most gamified interactions take place, is whether consumers complete a process (vs.

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drop out, e.g., leave without making a purchase). We argue that if the game layer is congruent to consumers’ core interaction process, consumers should be more inclined to complete the process. Prior research has noted that situations that provide immediate feedback (and thus clear goals) help consumers to focus on their actions (Csikszentmihalyi 1990). Congruent (vs. incongruent) game layers, which are in line with consumers’ core interaction goals and provide immediate feedback, should therefore support consumers in focusing on their interaction goals. Moreover, when several goals are congruent and can be attained by the same task, individuals consider this task to be more important (Köpetz et al. 2011), allocate more resources to its completion (Sansone and Harackiewicz 1996) and are more persistent in completing it (Shah and Kruglanski 2003). Accordingly, we propose that the congruence of the game layer with the core interaction process is central to determining that consumers complete the process. In contrast, when the game layer is incongruent, completion should be less likely, as consumers have to trade-off the allocation of their resources with their respective goals. In this situation, the game layer and the core interaction process are competing and, intuitively, competing goals undermine the individual’s “commitment to a focal goal” (Köpetz et al. 2012, p. 215). We propose that immersion should moderate the effect of congruence on process completion. Immersed individuals tend to lose track of the real world (Jennet et al. 2008) and allocate most of their resources to a given task. For congruent gamified interactions, immersion should lead consumers to allocate an even larger part of their resources to the completion of the core interaction process, as it corresponds to the game layer. In contrast, if the game layer is incongruent with the core interaction process, then immersion should intensify the distraction of consumers from completing their core interaction process. An example, which is highly congruent with the core interaction process, is Are You A Human?. As consumers progress in their shopping process by playing the game, they additionally become more immersed, and dropouts decreased substantially compared to processes that require consumers to enter Captchas (Salesforce 2013).

P5a: Congruence increases completion of the core interaction process (as consumers are more focused).

P5b: Immersion intensifies the positive effect of congruence on process completion.

Interaction experiences. A key motive of firms that use gamification is to create positive interaction experiences. To date, it is predominantly anecdotal evidence that indicates that gamified interactions create such positive experiences (for a review of empirical studies see Hamari, Koivisto, and Sarsa 2014; Ryan, Rigby, and Przybylski 2006). We

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propose that the creation of positive experiences depends on the characteristics of the core interaction process as well as on the characteristics of the game layer. Specifically, we suspect that immersion facilitates positive interaction experiences particularly when the core interaction process is considered to be tedious. Immersion is not strictly synonymous with positive experiences; instead, immersion is more closely related to task engagement (i.e., engagement typically precedes immersion). At its extremes (i.e., at full immersion), consumers become “physically and virtually part of the experience itself” (Ermi and Mäyrä 2014, p. 4). This engaging facet of immersion suggests that gamified interactions should be particularly advantageous when the core interaction process is tedious (e.g., Hamari, Koivisto, and Sarsa 2014). In such situations, gamified interactions create positive experiences as they engage consumers by means of the game layer, which overlays the otherwise tedious core interaction process. For instance, the virtual suitcase packing game of Allianz integrates challenges into learning about insurance products, which should increase immersion and should make the interaction more enjoyable. In sum, immersion should render consumers’ experience of interaction with a firm more enjoyable, especially when the core consumer-firm interaction process is tedious.

P6a: Immersion creates more favorable interaction experiences, especially when the core interaction process is tedious (as it enhances consumer engagement).

In contrast to what we proposed concerning immersion, we argue that congruence is most likely to create positive experiences, if the core interaction process is particularly complex. Prior research has found that a lack of fluency increases choice deferral and the selection of a compromise option (Novemsky et al. 2007), both of which can be a concern when the core interaction process is highly complex. If a game layer is congruent with the core interaction process, it is a secondary layer that completely aligns with the core interaction process and should serve as guidance. Put differently, a congruent game layer concisely guides consumers through their interactions with the firm and simplifies the core interaction process (i.e., consumers do not get stuck because the game layer guides them through the interactions). Given that such guidance simplifies the process, it should increase perceived fluency and thus also positively affect consumer experiences (e.g., Winkielman and Cacioppo 2001). Notably, feelings of fluency vary and should be most effective at eliciting positive interaction experiences, if the core interaction process is complex. In essence, from the consumers’ perspective, feelings of fluency should simplify a previously complex core interaction process. As a result, consumers should perceive the interaction as more positive. Autodesk, for

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instance, closely aligned consumers’ learning of the latest software with a game layer that guided consumers through the formerly complex process. The missions of the gamified version of Autodesk’s software 3ds Max are closely connected to collecting information about the software features and guide prospective customers through an extensive amount of information while providing them with a fun experience. In contrast to a congruent game layer, an incongruent game layer should render the core interaction process more disfluent and even intensify perceived complexity. As a result, consumers should perceive the interactions as more negative. In sum, we propose that congruent game layers will simplify the core interaction process and thus tend to create favorable interaction experiences, especially when the core interaction process is complex.

P6b: Congruence creates favorable interaction experiences, especially when the core interaction process is complex (as it creates feelings of fluency).

Re-Engagement. One of the most popular application areas of gamified interactions is the post-purchase phase, as firms hope to stimulate interactions with consumers even after these consumers have made a purchase. Consistent with this intuition, we propose that gamified interactions may indeed enhance repeated interactions. Individuals tend to repeat activities that are perceived to be enjoyable (Csiskzentmihalyi 1990). As previously argued, gamified interactions engage (e.g., by setting attainable but challenging goals) and guide (e.g., by providing clear feedback) consumers and thus are antecedents to experiencing such enjoyment. This should drive consumers’ motivations to re-engage with the firm and may even be successful, if consumers did not find their interactions particularly engaging at the outset (e.g., immersion renders previously tedious activities more engaging; P6a). Moreover, consumers should also be more likely to recommend interactions that were enjoyable because only these types of experiences tend to motivate consumers to spread positive word-of-mouth (Babin et al. 2005; Hoffman and Novak 1996). What is more, we propose that while positive experiences mildly increase the tendency of consumers re-engaging in interactions with a firm, the main driver of such re-engagement is a particularly high level of immersion (Nakamura and Csiskzentmihalyi 2002; Webster, Trevino, and Ryan 1993). Consumers who experience an exceptionally high level of immersion should perceive their interactions with the firm as intensely positive. Only at these high levels of immersion do consumers fully focus on the positive experience, and the positive experience can be considered “extraordinary”. While mildly positive experiences—for instance those created by congruent game layers (i.e., fluency)—tend to be ephemeral, consumers should remember experiences that are extraordinary (Arnould and Price 1993), and this should

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ultimately lead to repeated interactions (Arnold et al. 2005). Note, we do not hypothesize that all positive experiences that the gamified interactions create lead to re-engagement. Only highly immersive gamified interactions facilitate consumers’ repeated interactions with the firm and word-of-mouth about the firm (as gamified interactions are more enjoyable than traditional interactions). In contrast, merely congruent gamified interactions, which create feelings of fluency, will not lead to the creation of extraordinary experiences and thus neither lead to repeated interactions nor to positive word-of-mouth.

P7: Positive experiences that result from immersion increase consumers’ repeated interactions with a firm and positive word-of-mouth.

For an overview of the propositions, please refer to the Appendix. Figure 2 illustrates the framework for gamified consumer-firm interactions and maps the propositions based on (1) the extent to which consumers are immersed and (2) the extent to which the game layer is congruent with the core consumer-firm interactions. The inner circle shows the process by which we suggest that gamified interactions influence consumer-firm interactions, while the outer circle shows the ultimately derived outcomes. For instance, when firms seek to increase process completion (i.e., purchase), they should use highly congruent game layers, which are mildly immersive, to drive consumer process completion.

Figure 3 uses the same two dimension (i.e., congruence and immersion) and depicts examples of gamified interactions. The examples were rated according to their congruence and immersion (low to high). For instance, the example Are You a Human? is highly congruent because finishing the game (instead of Captchas) is necessary to continue the shopping process. As this example is not highly immersive (e.g., no audio elements, no social elements), it was assigned to the middle right of the graph. The symbol indicates the firm’s objectives (e.g., light gray triangle for process simplification) with its gamified interactions. For instance, as Are You a Human? simplifies the identification of someone as a human being, it is marked by a light gray triangle.

Figure 2: Gamified Consumer-Firm Interactions and Their Outcomes Along the Immersion-Congruence Dimensions

Full Immersion

No Immersion

Increased Time Spent

Small Consideration

Set

High Process Completion

High Congruence

No Congruence

−

−

High Fluency

High Awareness

High Engagement

Exploratory Attitudes

Low Search Persistence

Low Risk Aversion

High Consideration of

Innovations

High Focus Positive

Experiences

High Consideration of Unfamiliar Products

High Consideration of Hedonic Products High

Openness Repeated

Interactions

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Figure 3: Examples of Gamified Interactions with the Firms’ Objectives Along Immersion-Congruence Dimensions

High Congruence

No Congruence

Full Immersion

No Immersion

VW BlueMotion Roulette Are You a Human?

Microsoft Ribbon Hero Adobe Level Up

Nike+ and Fuelbands

Autodesk

Chevic Sonic Claw Game

Holmenkollen Ski Jump

Samsung Nation

Samsung S4 Stare Down

Jay-Z Decoded

Catch A Choo

Club Psych

Contrexpérience

McDonald’s Monopoly

HSN Arcade Nike Winter is Angry

Allianz Suitcase Packing Game

North Face Never Stop Exploring

UBS Quiz and Fly

Mobilar Pilotifant Zurich Snow Zone

Chupa Chups Get Lolli

Coca Cola Shake it

Cross-/Up-Selling Innovation Management Customer Engagement Process Simplification Customer Retention Community Management Sales Generation

Weight Watchers Challenge

Step2

DoDo Case

Veloplus App

Verizon Insider

SeatPG Connection Game

4Food

Bonobo‘s Easter Egg Hunt

Aldo‘s Mood Board

Lotus Evora 400 Supercar

Gstaat Tourism

Coop Star Flight

Ski Movie Arosa Heineken Star Player Game

Woot.com

eBay

Fairmont Hotels‘ Personality Quiz

Ford Hack Type

Playboy Miss Social

Ralph Lauren Quiz

Haystakt

Mercedes Benz Mystery Test Drive

Lagos Quiz

Ford Escape Routes

American Express Nextpedition

Opel Mokka Game

Bluefly

Minions Summer 2015 and Chiquita

Nike Shox

Audi A4 Quattro Experience

ModCloth

Magnum Pleasure Hunt

Buffalo Wild Wings

Kellog’s Krave Krusader Coop BBQ App

Mattel Barbie Life in the Dreamhouse

Dropbox Space Race

Moosejaw Quikly

MLB.com

Domino’s Pizza Hero

Ferrari Mosaic

Gilt Noir

Ovomaltine SUP Game

Savannah Morning Star

Porsche Rebels, race on.

Bayer’s DIGIT meter

Mini Getaway

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Towards a New Framework for Consumer-Firm Interactions: The Gamification Paradigm

The previous sections of this paper outlined the characteristics and consequences of gamified interactions. We propose that the underlying ideas of this phenomenon are more far-reaching and are partly challenging basic principles and key constructs of marketing theory and practice (see Table 1). In the following, we describe these by converging on what we call the gamification paradigm.

Implications for Marketing Theory From interactions as a source of disutility to interactions as a source of utility. Traditionally, marketing theory presumed that the characteristics of an offer are the main determinants of value and that value-in-exchange is the dominant concept (Bagozzi 1975). A vast amount of literature posits that interactions should be streamlined and any frictions should be reduced to create value to the customer and increase the desirability of products. This view is consistent with transaction cost economics (TCE; Rindfleisch and Heide 1997; Williamson 1979), which considers any step necessary to complete an activity as a cost or source of disutility. Experiential marketing has started to acknowledge that interactions may have positive effects because interacting with firms may create experiential value (Holbrook 2006; Schmitt 1999; Schmitt and Zarantonello 2013; Vargo and Lusch 2004). Under a gamification paradigm, this causality may even reverse. Advancing the understanding of the value-generating role of additional processes in consumer-firm interactions, the gamification paradigm posits that gamified interactions can be a source of utility. Whereas—at the outset of any gamified interaction—the cues are typically extrinsic, the key construct of gamified interactions, namely, immersion, is inherently intrinsic in nature (Mathwick and Rigdon 2004; Ryan, Rigby, and Przybylski 2006). When interacting with the game layer, the core interaction process becomes secondary and consumers’ focus shifts toward the game layer. Hence, it may not be a firm’s products or services, but rather the game layer that contributes the most to creating utility (in the form of experiential value). Thus, the gamification paradigm holds that the dominant source of utility may be the experiences emerging from the game layer, which motivate purchases and increase the desirability of products and services. This has several implications for marketing theory. First, perspectives that explicitly portray the dynamic interplay between extrinsic and intrinsic motivation become increasingly important. One such perspective is cognitive evaluation theory

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(Deci and Ryan 1985; Ryan and Deci 2000), which discusses the factors that explain different levels of intrinsic motivation. In addition, organismic integration theory (Deci and Ryan 1985; Ryan and Deci 2000) adds to this discussion by characterizing different forms of extrinsic motivation and the factors that support internalization. Second, other research domains (i.e., game research) have the potential to inform marketing that currently has only limited knowledge of constructs that are key to a gamification paradigm. For instance, game research has examined how individuals who engage in game play advance from one s