Featured Research

from universities, journals, and other organizations

Stock Price Correlated To Likeability Of Super Bowl Ads

Date:
January 31, 2008
Source:
University at Buffalo
Summary:
When TV viewers like a company's Super Bowl commercial, the company's stock price goes up, according to a new study. The study examined 529 commercials that aired during 17 Super Bowls from 1989-2005, and found that investors favored stocks of firms that aired likeable Super Bowl commercials.

When TV viewers like a company's Super Bowl commercial, the company's stock price goes up, according to a study by researchers in the University at Buffalo School of Management and Cornell University.

The study examined 529 commercials that aired during 17 Super Bowls from 1989-2005, and found that investors favored stocks of firms that aired likeable Super Bowl commercials.

The researchers used ratings gathered by USA Today's Ad Meter, a real-time consumer likeability ranking of Super Bowl commercials. They found that firms with the most likeable commercials had higher than normal stock purchases on the days following the Super Bowl, which increased the firms' stock price.

"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."

Firms with the least-liked commercials and commercials that drew a neutral response from viewers did not experience the same stock price reaction, according to Kim and co-researchers Charles Chang, assistant professor of finance in Cornell University's School of Hotel Administration, and Jing Jiang, a doctoral student in the UB School of Management.

However, having an "unliked" commercial did not harm those firms, the researchers concluded.

The findings on liked commercials demonstrate how people often take mental shortcuts rather than go through longer analytical processing when making decisions that should be complex, Kim explains.

In this case, people bought stock because they liked a firm's TV commercial instead of making a decision based on a firm's long-term value.

These investors appeared to use a mental short cut known as "representativeness bias" when evaluating the firms, Kim says. In investment decision making, representativeness bias is irrationally relating one aspect of a firm to its expected stock returns.

"We're probably all guilty of this bias in our everyday lives. When shopping for a used car, we might think that a clean car is a good car," explains Kim. "We might think a person with a nice haircut is a good person. We might think a tall person is a good basketball player."

In investment decision-making, another example of this bias occurs when investors believe recent past returns are representative of what they can expect in the future.


Story Source:

The above story is based on materials provided by University at Buffalo. Note: Materials may be edited for content and length.


Cite This Page:

University at Buffalo. "Stock Price Correlated To Likeability Of Super Bowl Ads." ScienceDaily. ScienceDaily, 31 January 2008. <www.sciencedaily.com/releases/2008/01/080130143522.htm>.
University at Buffalo. (2008, January 31). Stock Price Correlated To Likeability Of Super Bowl Ads. ScienceDaily. Retrieved April 21, 2014 from www.sciencedaily.com/releases/2008/01/080130143522.htm
University at Buffalo. "Stock Price Correlated To Likeability Of Super Bowl Ads." ScienceDaily. www.sciencedaily.com/releases/2008/01/080130143522.htm (accessed April 21, 2014).

Share This



More Mind & Brain News

Monday, April 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Study On Artists' Brain Shows They're 'Structurally Unique'

Study On Artists' Brain Shows They're 'Structurally Unique'

Newsy (Apr. 17, 2014) The brains of artists aren't really left-brain or right-brain, but rather have extra neural matter in visual and motor control areas. Video provided by Newsy
Powered by NewsLook.com
Is Apathy A Sign Of A Shrinking Brain?

Is Apathy A Sign Of A Shrinking Brain?

Newsy (Apr. 17, 2014) A recent study links apathetic feelings to a smaller brain. Researchers say the results indicate a need for apathy screening for at-risk seniors. Video provided by Newsy
Powered by NewsLook.com
Are School Dress Codes Too Strict?

Are School Dress Codes Too Strict?

AP (Apr. 16, 2014) Pushing the limits on style and self-expression is a rite of passage for teens and even younger kids. How far should schools go with their dress codes? The courts have sided with schools in an era when school safety is paramount. (April 16) Video provided by AP
Powered by NewsLook.com
Could Even Casual Marijuana Use Alter Your Brain?

Could Even Casual Marijuana Use Alter Your Brain?

Newsy (Apr. 16, 2014) A new study conducted by researchers at Northwestern and Harvard suggests even casual marijuana use can alter your brain. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins