Super Bowl ads lure investors, Rice professors say
HOUSTON – (Feb. 2, 2017) – It is commonly known that companies spend millions of dollars on advertising to increase general awareness, introduce new product lines, build on their brands and sell products and services, but professors at Rice University’s Jones Graduate School of Business say such high-profile advertising provides another result that is not so well-known: Publicly traded companies that invest in big ad buys like the Super Bowl see a spike in their common stock being traded, even if they’re not advertising a consumer product.
“We’re fairly certain that the publicly traded companies advertising on Sunday’s Super Bowl will see a spike in stock purchases,” said James Weston, professor of finance and co-author of the study “Advertising, Breadth of Ownership and Liquidity.”
Weston, along with Rice colleagues Gustavo Grullon and George Kanatas, said the increase in common-stock trading will come from the “everyday” person and not serious investors.
“People buy on impulse and on recognition,” Weston said. “With more and more online trading taking place, companies that spend money on big advertising campaigns see this additional benefit from their advertising investment.”
The Rice team’s research was based on a sample of 5,776 firms. Their findings showed that on average a 10 percent increase in advertising expenditures increased the number of independent shareholders by 2.7 percent. Institutional shareholders climbed 0.5 percent.
For more information about this research, see Rice Business Wisdom: http://ricebusinesswisdom.com/finance/advertising.
To schedule an interview with Weston, contact Jeff Falk, associate director of national media relations at Rice, at firstname.lastname@example.org or 713-348-6775.
For other Rice experts available to comment on Super Bowl LI in Houston, see http://news.rice.edu/2017/01/23/experts-available-to-discuss-houston-heading-into-super-bowl-li.
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Weston bio: https://business.rice.edu/person/james-p-weston.
Jones Graduate School of Business: http://business.rice.edu.