Ah, the power of advertising! We rule the world! We call the shots! We make the big plays! Don’t believe it?
When TV viewers like a Super Bowl spot, the company’s stock price goes up. This factoid comes by way of a new study by researchers in the University at Buffalo School of Management and Cornell University.
Using USA Today’s Ad Meter, the study compared 529 commercials that aired during Super Bowls from 1989-2005, and found that investors favored stocks of firms that aired top rated commercials. Thus, the company’s stock price went up.
“This reaction is irrational because the stock returns were based solely on likeability of the commercials,” says researcher Kenneth A. Kim, associate professor of finance in the UB School of Management. “If the likeability of the commercials caused a subsequent increase in company sales, a stock increase would make sense, but we did not find this to be the case.”
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