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PurposeDrawing on extant literature on narrative persuasion, online advertising, and transportation theory, this research aims to study Internet‐based online narrative advertising and investigate the effects of four pertinent advertising design elements, interactivity, entertainment, vividness, and self‐referencing, on consumer products and the moderating effects of advertisement involvement on these relationships.Design/methodology/approachData were collected using an online questionnaire that contained measures adapted from prior studies. Participants first selected a product that they would seriously consider purchasing and answered a set of questions prior to viewing a narrative online advertisement, which was followed by a different set of questions. Structural equation modeling was used to empirically test the authors’ proposed model.FindingsGreater levels of interactivity, vividness, entertainment, and self‐referencing in narrative online advertisements led to more favorable attitudes toward a product. In particular, self‐referencing had a substantial effect on transportation in forming product attitudes. Advertisement Involvement moderates (i.e. enhances) the effect of self‐referencing on attitudes toward a product.Practical implicationsIf properly designed, a narrative online advertisement can fully utilize Internet‐enabled features and can maximize their potential to produce a favorable consumer attitude toward a featured product.Originality/valueThis study advances narrative advertising research and provides empirical evidence to highlight the effects of the pertinent characteristics of Internet‐based advertising, interactivity and entertainment in the conversion process of transportation and consumer attitudes. Moreover, this study identifies and sheds light on important contingencies (i.e. advertisement involvement) of the focal relationships.