The positive impact of advertising on your share price

This paper reminded me of a logo drama many years ago. The client – on instructions from Head Office – wanted to super the Group (a big listed plc.) logo in the end-frame of their first ever TV commercial. We dug our heels in with local management based on irrelevance to the Target Market & Brief. Eventually, air-date approached, and I was sent to present the campaign to the CEO and Executive Committee. The CEO loved the spot – the Media and Production budget being no small dough to them. He patiently listened to our point-of-view and then explained that his target market wasn’t just the end-user; it was the Stakeholders, Workers and particularly the Institutional and Retail investment community that bought or held their stock. He reckoned that to number about 3000 people in total, his target market. The logo appeared. The Campaign was well received. Sales maintained momentum. The acquisitive group soared to greater International heights. And the share price grew …


“Background Noise? TV Advertising Aff ects Real Time Investor Behavior

Jura Liaukonyte                                                                 Alminas Zaldokas

February 2020


Using granular minute-by-minute television advertising data covering approximately 326; 000 ads, 301 rms, and $20 billion in ad spending, we study the real-time e ffects of TV advertising on investor search for online nancial information and subsequent trading activity. Our identi fication strategy exploits the fact that viewers in di fferent U.S. time zones are exposed to the same programming and national advertising at di fferent times, allowing us to control for contemporaneous confounding events. We find that an average TV ad leads to a 3% increase in SEC EDGAR queries and an 8% increase in Google searches for financial information within 15 minutes of the airing of that ad. Such advertising eff ects spill over through horizontal and vertical product market
links to financial information searches on closest rivals and suppliers. The ad-induced queries on the advertiser increase trading volume and contribute to a temporary rise in the stock price. This suggests that advertising, originally intended for consumers, has a non-negligible eff ect on financial markets.

Keywords: Advertising; Limited Attention; Retail Investor Behavior”


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