Procedia Economics and Finance 6 ( 2013 ) 550 – 561 2212-5671 © 2013 The Authors. Published by Elsevier B.V. Selection and peer-review under responsibility of Faculty of Economic Sciences, Lucian Blaga University of Sibiu. doi: 10.1016/S2212-5671(13)00173-1 International Economic Conference of Sibiu 2013 Post Crisis Economy: Challenges and Opportunities, IECS 2013 Flow Theory and Online Marketing Outcomes: a Critical Literature Review Daniel Rare Obad a* aFaculty of Economics and Business Administration, "Alexandru Ioan Cuza" University of Ia i, Romania Abstract The aim of this paper is to provide a critical review of flow theory a psychological state and its marketing outcomes in online environments. Despite the strong interest of researchers from various disciplines, adapting the flow theory to online environments has been problematic. Based on a careful examination of the literature, we identified conceptual challenges confronted when studying flow online. The paper further discusses some possible solutions for challenges and underlines the need for more studies in this research area. Finally, marketing outcomes of applying flow theory in online environment were examined. © 2013 The Authors. Published by Elsevier B.V. Selection and peer-review under responsibility of Faculty of Economic Sciences, Lucian Blaga University of Sibiu. Keywords: flow theory; online environment; marketing outcome; consumer behaviour. 1. Introduction The growing importance of technologies in today's information economy has created a significant interest among academia and industry worldwide for understanding and delivering compelling experiences to online consumers. Flow is an important construct for companies and worthy to be considered for understanding and improving customer relationships in online environments. Many researchers have studied flow in different contexts (Agarwal and Venkatesh, 2000; Chen et al., 1999; Chen, 2000, 2006; Csikszentmihalyi, 1975, 1988, 1989, 1990, 1992, 2000, 2004, 2005; Hoffman et al., 1996; Huang, 2003; Koufaris, 2002; Novak et al., 2000, 2003; Trevino et al.,1992; Webster et al., 1992) such as sports (Jackson, 1996), reading (McCuillan and Conde, 1996) or in work environments (Allison et al., 1988). Flow was * Corresponding author. E-mail address: rares.obada@gmail.com Available online at www.sciencedirect.com © 2013 The Authors. Published by Elsevier B.V. Selection and peer-review under responsibility of Faculty of Economic Sciences, Lucian Blaga University of Sibiu. ScienceDirect Open access under CC BY-NC-ND license. Open access under CC BY-NC-ND license. 551 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 recognized to be a useful variable for explaining online consumer behavior (Hoffman et. al., 1996; Koufaris, 2002). Siekpe (2005) showed that "flow construct [...]" is important "for understanding the nature of the consumer experience." Flow is a hedonistic construct, whose importance has been widely recognized as having a major impact on the user's behavior of information systems (Csikszentmihalyi, 1975). According to Csikszentmihalyi (1975, 1988), flow is a "crucial component of enjoyment" and is "the holistic sensation that people feel when they act with total involvement". In a flow state, the consumers perceive an effortless action, loss of time and a sense that the experience stands out as being exceptional compared with daily activities (Csikszentmihalyi, 1997). Flow is a continuous variable that in different levels of flow can occur, ranging from none to an intense (or complete) state (Csikszentmihalyi and Csikszentmihalyi, 1988). The research to dates studied flow experience as an independent variable, as a dependent variable, and lately, as a mediator variable. Since 1996 (see Hoffman and Novak) the universal applicability of flow theory was extend to online environments and scholars suggested that the success of online marketers depends on their ability to create opportunities for consumers to experience flow. Despite the strong interest in adapting the flow theory for online environments, the literature shows inconsistency and discrepancies. Many studies are hampered by conceptual ambiguities and a confusion about construct dimensions. Conceptual and empirical models of flow still need to clarify the relationship between the construct and its dimensions. Based on an extensive review of existing research on flow theory, we emphasize possible solution to clarify the theoretical framework of studying online flow. This paper is structured as follows: in the beginning, we present the origin and meaning of the flow construct and differenced it from similar experiences. Then, different conceptualizations of flow and construct dimensions. Further, we continue with the review of the most important conceptual and empirical models of optimal experience, both in online and offline environment and undertake a comparative analysis of them. Finally, we present the marketing outcomes of online flow and other consequences that may affect consumer behavior in the online environment. 2. Flow Theory Flow theory received a growing attention in the last years as a basis to understand the facilitators for develop compelling experiences in online environments. The origin of this theory can be traced back in the papers of Csikszentmihalyi. While interviewing certain professional and amateur dancers, chess players, rock climbers, surgeons, and many others that expressed a deep devotion for their preferred sort of activity, Csikszentmihalyi selected a special feeling, called "optimal experience". During the interview sessions, Csikszentmihalyi found that individuals verbalize it as "being in the midst of a flow". Csikszentmihalyi (1975; 1990) called this holistic experience flow. Flow theory is one of the two theories of intrinsic motivation developed in positive psychology paradigm (Seligman and Csikszentmihalyi, 2000). The other theory (Self-Determination Theory) was developed and presented by Deci and Ryan (1985). In fact, the theory of optimal experience or flow is not only motivational. Csikszentmihalyi and his colleagues were engaged in serious efforts to present flow experience as: (1) an cognitive artifact (the starting point is the center of attention), applied for the description of holistic personal development (Csikszentmihalyi, 1978, 1975), (2) an important factor in the evolution of bio-culture and selection (Csikszentmihalyi, 1990; Massimini and Delle Fave, 2000), (3) a theory of creativity, work well done and talented adolescents (Csikszentmihalyi, 1996; Csikszentmihalyi, Rathunde and Whalen, 1993; Gardner, Csikszentmihalyi and Damon, 2001), (4) a psychological theory of development (Csikszentmihalyi, 1990; Csikszentmihalyi and Larson, 1984); (5) a basis for psychological rehabilitation practice (Delle Fave and Massimini, 2004, 2005). Despite the variety of interpretations, in this study the flow experience is discussed as a motivational paradigm. Flow theory was first applied to online environments by Hoffman and Novak (1996). They extended the universal applicability of flow to computer-mediated environments and suggested that "optimal experience" can contribute to the success of online marketers by creating exciting experiences to consumers. Because the Internet is an interactive environment, it provides opportunities to customers to experience flow during their navigation (Chen 552 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 et al., 1999). Because of its marketing outcomes, flow experience is a desirable consequence of online interaction between the consumer and firms. 2.1. Definitions of flow Despite its relevance for the online environment, flow proved to be an elusive construct. What is flow? Csikszentimihalyi (1977) describes the flow experience as "holistic sensation that people feel when they act with total involvement" (Csikszentimihalyi, 1977), but other scholars focus their conceptualization on other constructs that seem to characterize the flow experience. Some of these constructs affect or are a cause of flow, and others are experienced as a result of the individual's flow state. Perhaps the most comprehensive definition is provided by Csikszentmihalyi (1997), who discusses the following major characteristics of flow: (1) clear and distinct goals, (2) temporary loss of self-consciousness, (3) distorted sense of time, (4) actions merging with awareness and immediate feedback, (5) high concentration on the task, (6) high level of control, (7) a balance between the available skills of the individual and the task challenges, and (8) autotelic experiences. Lutz and Guiry (1994) state that: "psychologists use the term 'flow' to describe a state of mind sometimes experienced by people who are deeply involved in some event, object or activity...they are completely and totally immersed in it...Indeed, time may seem to stand still and nothing else seems to matter while engaged in the consumption event." Hoffman and Novak (1996) extended the applicability of flow theory in online environments, such as the World Wide Web, and defined flow as the state occurring during network navigation which is: (1) characterized by a seamless sequence of responses facilitated by machine interactivity, (2) intrinsically enjoyable, (3) accompanied by a loss of self-consciousness, and (4) self-reinforcing. Analyzing the conceptual definitions of flow in both online and in the offline environment, we noticed that many ambiguities makes it difficult to measure this construct. However, various characteristics of flow show conceptual similarities. The literature review on flow theory reveals that flow is considered to be a multidimensional complex construct characterized by relations between a large set of unidimensional constructs which have been proposed as components of flow theory by different researchers (Koufaris, 2002; Hoffman and Novak, 2009; Bridges and Florsheim (2008). 2.2. Concepts related with flow: peak experience and peak performance Over the time, researchers in psychology have developed several concepts that are similar with flow because they can be considered optimal experiences. In this section we compare and contrast two of those concepts: peak experience and peak performance. On one hand, peak experience is "a generalization for the best moments of the human being, for the happiest moments of life, for experiences of ecstasy, rapture, bliss, of the greatest joy" (Maslow, 1971). The difference between flow and peak experience is that both may involve high levels of enjoyment. Peak experiences differ from flow experiences in which 'the former is "all or nothing" while the latter varies in intensity' (Walker et al., 1998, p. 455). For example, a student who is at his graduation ceremony could experience peak experience. On the other hand, peak performance is "superior use of human potential" and "it refers to the full use of human power, whether if that will be physical strength in a crisis, creative expression through an artistic endeavour, intellectual mastery of a problem, or another experience that significantly taps human potential (Privette, 1983). For example, winning the world cup (and receiving the trophy) could be a moment when a soccer player experiences a peak performance. The main idea is that peak performance can be compared to both peak experience and flow in terms of the levels of enjoyment and performance that are involved. Peak performance involves a high level of performance, but is not necessarily accompanied by enjoyment. Flow involves both enjoyment and performance, but is not defined by their level of intensity. Finally, we draw a line between attention, involvement and flow. Privette (1987) considers attention and involvement as common qualities for the state of flow, peak experience and peak performance they are not optimal experiences. 553 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 3. Flow Models In this section we present a short descriptions and an analysis of the main flow models in online and offline environment that could be useful for a better understanding of flow theory. 3.1. Four Channel Flow Model According to flow theory (Csikszentmihalyi, 1977), the flow state is determined by two factors: skills (a person's ability to successfully perform a task) and challenges (the necessary efforts to perform a task). The four channel model proposed by Csikszentmihalyi (1977) is the original flow model and it is shown in Figure 1. Figure 1: The Four-Channel Flow Model, Source: Csikszentmihalyi (1977) We can see that figure illustrates the flow state through two axes: skills and challenges. If the level of challenge is higher than the level of skills, individuals will be overwhelmed by anxiety because they are not able to handle task. When the level of challenge is lower than the level of skills, and a small effort is needed to perform a task, the individual will experience boredom. If the level of skills and the level of challenge are extremely low, the person will feel apathetic. Flow occurs only when a difficult task is in balance with the person's skill, meaning that both skills and challenges are high. 3.2. Model of Flow in Human Computer Interaction In 1995, Ghani developed a model of flow in human-computer interaction. His model, shown in Figure 2, considers the antecedents of flow: fitness of task (the balance between skills and challenges), perceived control, and cognitive spontaneity ("playfulness"). The flow state can be measured through the constructs of enjoyment and concentration. Apaty Boredom Anxeity FLOW Challenge Skills (High) (Low) (Low) (High) 554 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 The consequences of flow are: focused on the process, increased learning, and increased creativity. Figure 2: Model of Flow in Human Computer Interaction, Source: (Ghani, 1995) This model proposed by Ghani illustrates the complexity of the balance of a user's skills and challenges. For example, with a high level of skills, the user feels more in control, which can lead to flow. However, when the level of skills greatly exceed challenges, boredom will likely result, providing a negative influence on flow. Also, Ghani finds that the construct of fit (challenges and skills) influences flow indirectly, mediated through perceived control. The model of flow in human-computer interaction proposed by Ghani can be considered a "transition" model because is a bridge between offline flow models and online flow models. 3.3. Model of Flow within a Computer-Mediated Envoirment Hoffman and Novak (1996) develop a theoretical model of flow within the hypermedia environment of the Web (Figure 3). Figure 3: Model of Flow within a Computer-Mediated Environment, Source: (Hoffman and Novak, 1996) Based on Csikszentmihalyi's studies, they show that primary antecedents to flow are: challenges, skills, and focused attention. They add two secondary antecedents from Steuer's communication work: interactivity and Skill/ Challenge Congruence Vividness Interactivity Process Character Telepresence Involveme t Focused Attention Exploratory Mindset Positive Experience Flow Increased Learning Perceived Control FLOW Focus on Process Learning Creativity Enjoyment Concentration Task Challenges and Perceived Control Cognitive Spontaneity FLOW 555 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 telepresence. Steuer (1991) defines telepresence as "the extent to which one feels present in a mediated environment, rather than in the immediate physical environment" and identifies vividness and interactivity as two dimensions which determine the degree of telepresence within a particular technology. Hoffman and Novak use vividness and interactivity as content characteristics that directly influence telepresence and focused attention. Also, they add the construct of involvement (intrinsic motivation and self-reliance) which is influenced by whether the activity is goal-directed or experiential. They label goal directed and experiential as process characteristics. In this model, consequences of flow are: increased learning, perceived control, exploratory mind-set, and positive subjective experience. In 2000, Novak and colleagues make some adjustments to their 1996 theoretical model and test it empirically using structured equation modeling to create a revised theoretical model. One important change in the flow model within a computer-mediated environment is the shift of control construct from a consequence to an antecedent of flow. Also, is added the construct of arousal as an antecedent of flow, and is a dependent variable of challenge. In the revised model, the primary antecedents of flow are skill/control, challenge/arousal, and focused attention. The secondary antecedents are experience with the Web, interactive speed, and importance. Novak et al. (2000) do not find support for the hypothesis that greater flow corresponds to greater exploratory behavior. Instead, exploratory behavior corresponds with telepresence. Thus, telepresence contributes to flow and exploratory behavior. 3.4. Model of flow antecedents, flow experience and flow consequences In his dissertation, Chen (2000) finds empirical evidence for a correlation between a Web user's flow experience and ten flow dimensions originally proposed by Csikszentmihalyi (1990). Figure 4: Model of Flow antecedents, flow experience and flow consequences, Source: (Chen, 2000) Using factor analysis, Chen breaks down the ten dimensions into three factors labeled flow antecedents, flow experience, and flow consequences (Figure 4). In this model, the flow antecedents are: clear goals, immediate feedback, potential control, and merger of action and awareness. Immediate Feedback Merger of Action and Awareness Clear Goals Potential Control Time Distortion Telepresence Concentration Loss of SelfConsciousness Autotelic Experience Positive Affect Antecedents Consequences Experiences 556 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 The flow experience dimensions are: concentration, telepresence, time distortion, and loss of self-consciousness. The flow consequences are positive affect and autotelic experience. The model proposed by Chen is important to clarify the flow phenomenon and his stages, although the studies that followed attempted to confirm or deny the dimensions of antecedents, flow experience, and flow consequences. 3.5. Person–Artifact–Task model of flow antecedents Finneran and Zhang (2003) develop a model that focuses on flow antecedents and identifies the importance of separating the task artifact in computer mediated environments (Figure 5). The person-artifact-task (PAT) model of flow antecedents was developed to conceptualize three distinct components, such as: person, task and artifact – that interact a contribution to a person's flow state, as antecedents. The PAT model is important because it contributes to the re-conceptualization of the original flow theory for a better understanding of flow antecedents in online environment. Finneran and Zhang state that the value of PAT model is that using it, researchers will be in a better position to say unequivocally that the artifact contributed to the flow experience as opposed to a particular absorbing task and will help them to conceptualize the flow dimensions. We consider this flow model important for a better understanding of the flow phenomenon in online environments. Figure 5: Person–Artifact–Task model of flow antecedents, Source: (Finneran and Zhang, 2003) However, the PAT model emphasizes only the flow antecedents stage, not the entire flow framework and clarifies some of the conceptual differences found in the existing flow models. 3.6. Flow Model within Context of Tourism Website In 2004, Skadberg and Kimmel proposed a flow model to predict the level of flow for a tourism website (Figure 6). Artifact P2 Task P3 Person Trait State P1a P1b P4 P6 P7 P5 Flow Antecedents Flow Experience Flow Consequences 557 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 Figure 6: Flow Model within Context of Tourism Website, Source: (Skadberg and Kimmel, 2004) The user's domain knowledge represents user's skill and the content of the Web pages represents the challenge. The third direct antecedent of flow is telepresence, which is influenced by site attractiveness and interactivity, the latter is further influenced by speed and ease of use. Flow is measured by time distortion and enjoyment. The consequence of flow is increased learning, which impacts attitude and behavior. This flow model is important because it can be used by marketers and designers in order to create compelling websites for firms. 3.7. Models of Flow as Reflective and Formative Conceptualizations More recent, Siekpe (2005) developed and tested two models of flow (Figure 7) for specifying the right measurement model and to provide a practical way for researchers to decide on the causal interrelations among variables employed in their research. His results suggest that challenge, control, curiosity, and concentration (FO latent variables) are better formulated as reflective dimensions of the flow construct rather antecedent dimensions. Figure 7: Models of Flow as Reflective and Formative Conceptualizations, Source: (Siekpe, 2005) Attractiveness Telepresence Interactivity Ease of Use Experience/ with Web Sites Design Speed Info in the Web Site/ Challenge Domain Knowledge / Skill Optimal Experience Flow Flow Experience Factors Contributing To Flow Experience Consequences of Flow Experience Priori Web Experience And Priori Knowledge Contents Performance Increased Learning Changes of Attitude & Behavior Challenges Concentration Flow Intention to purchase Intention to return Curiosity Control a) Flow as Reflective Construct b) Flow as Composite Construct Challenges Concentration Control Curiosity Intention to purchase Intention to return Flow 558 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 He concluded that, in order to assess flow: (1) the direction of causality is from the HO construct to the FO latent variables, (2) The FO variables are manifestations of the HO construct, and while changes in the FO variables should not cause changes in the HO construct, changes in the HO construct do cause changes in the FO variables, (3) The FO variables should share a common theme and are expected to co-vary with each other. 3.8. Conceptual challenges of flow: a comparison of flow models Analyzing the summarized flow models, we see that some of the constructs are present in all of the models, while others are unique to a particular model. The same concepts may be referred to with different construct names. For example, Ghani (1995) and Chen (2000) focus on primary antecedents, but Hoffman and Novak (1996) and Skadberg and Kimmel (2004) also look at secondary or indirect antecedents that yield flow through a mediating construct. In general, the models and other empirical flow studies seem to suggest the following three stages as a flow framework: flow antecedents, flow experience, and flow consequences (Chen, 2000; Ghani, 1995; Ghani and Deshpande, 1994; Trevino and Webster, 1992). However, we can identify also discrepancies of the constructs and their structure within each model. For example, perceived control is considered an important antecedent by Ghani (1995) and Chen (2000), but, in another study, Hoffman and Novak (1996) consider perceived control to be a consequence of flow. Hoffman and Novak (1996) and Novak et al. (2000) include aspects of the interface such as interactivity in their model, yet Chen ignores such characteristics. 4. Marketing outcomes of online flow From a marketing perspective, flow theory proved to be very important for understanding the consumer's behavior in online environments. In this section we underline the marketing consequences (outcomes) of online flow. 4.1. Learning One important consequences of online flow is an increased learning. Researchers confirmed that consumers who experienced flow during Web usage are more likely to retain more of what they perceive, with implications for the effectiveness of marketing communications (Hoffman and Novak, 1996). Flow was found as the increase learning, and the increased learning, along with Website attractiveness, was the most important factor affecting change of attitude and behavior (Skadberg and Kimmel, 2004). In their study, Choi, Kim, and Kim (2007) revealed that flow experience was positively related to learning outcomes among participants in a Web-based firm resource planning training program. In other studies, learning was also an important consequences of online flow (Hoffman and Novak, 2009; Ho and Kuo, 2010). 4.2. Attitudes, behavioral intentions, and behavior Flow experience has been proven to influence online consumer's attitudes, behavioral intentions and behavior. For example, in some studies flow has been found to influence attitude toward online purchasing (Korzaan, 2003), attitude toward e-learning (Choi, Kim, and Kim, 2007), brand attitudes (Mathwick and Rigdon, 2004; SanchezFranco, 2006). Also, Hsu and Lu (2004) concluded that flow influence attitude toward Web and brand. Luna, Peracchio, and de Juan (2003 found that attitude toward a Web site influenced flow. Hoffman and Novak (1996) found positive subjective experience to be an outcome of online flow. Reid (2004) showed that flow influence user satisfaction and creativity. In other studies, flow has been found to influence behavioral intentions. Luna, Peracchio, and de Juan (2002, 2003) and Richard and Chandra (2005) showed that flow influence online purchase intentions. Flow also influence 559 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 revisit intentions (Koufaris, 2002; Luna, Peracchio, and de Juan, 2002, 2003), intention to use the Web (Agarwal and Karahanna, 2000; Sanchez-Franco, 2006), and intention to play an online game (Hsu and Lu, 2004). Korzaan (2003) found that flow experience influence indirect, through attitude purchase intention, intention to use the Web (Sanchez-Franco, 2006) and intention to play an online game (Hsu and Lu, 2004). Some other researchers tested the impact of flow on online purchase (Bridges and Florsheim, 2008) and Web usage (SanchezFranco, 2006). 4.3. Exploratory behavior Another outcome of flow experience was an increased exploratory behavior (Novak, Hoffman, and Yung, 2000; Koorzan, 2003). In their study, Agarwal and Karahanna (2000) defined flow as a higher-order factor and found that the curiosity contributed to flow; Chou and Ting (2003) found that discovery contributed to flow. 4.4. Control Flow scholars found a correlation between flow construct and perceived control (Webster, Trevino, and Ryan, 1993). Others, proposed that perceived behavioral control was an outcome of flow (Hoffman and Novak, 1996), or as contributing to a higher-order flow construct (Agarwal and Karahanna, 2000; Huang, 2006). 5. Conclusion Online environment evolved rapidly since its inception in 1990. The total number of users raised in 2012, according to Internet World Stats, at 2.4 billion with a penetration rate of 34.3% in world population. Understanding the consumer's online behavior is important in today's economy in order to create effective online marketing strategies. Flow theory has been found useful in understanding the factors which enhance compelling online experiences for the customers. This paper attempts to provide a critical analysis of flow, a useful construct that can be used to explain online consumer behavior. First, analyzing the definitions from flow studies in both online and offline environment, we noticed that there are many ambiguities and vagueness which makes it difficult to overcome the conceptual challenges confronted when studying flow online. Although considerable efforts have been made over time to provide clear and accurate definition of flow, it could not be identified a central definition of the flow, but with a variety of constructs that are experienced when an individual enters in flow state. However, various characteristics of flow show conceptual similarities but it seems that a comprehensive understanding of flow remains elusive. Second, we noticed that flow models, both in offline and online environments are significantly different and, sometimes, even contradictory in terms of flow dimensions, direction of influence and stages where each dimension is located. The same concepts may be referred to with different construct names. We conclude that, most of flow models suggest the following three stages as a flow framework: flow antecedents, flow experience, and flow consequences. Third, the marketing outcomes of flow experience proved to be important for understanding the online consumer's behavior. The accelerated pace of Web evolution requires a continuous study in time to see effective internal and external changes in online consumer experiences. Flow experience has been proven to influence learning, attitudes, computer use, positive experiences, behavioral intentions and customer's behavior. The researchers had the vision to use flow theory as a way to understand consumers behavior in online environments, and thus to help marketers to create efficient and effective marketing strategies. The implications are clear. Future research should continue to study the marketing outcomes of flow experience in online environments. 560 Daniel Rareş Obadă / Procedia Economics and Finance 6 ( 2013 ) 550 – 561 6. References Agarwal, R.; Karahanna, E. (2000) Time Flies When You're Having Fun: Cognitive Absorption and Beliefs About Information Technology Usage, MIS Quarterly, 24(4), p. 665-694. Bridges, E.; Florsheim, R. 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