The Short-Term Impact Of Super Bowl Advertising On Stock Prices: An Exploratory Event Study

Abstract

Advertisers are under pressure to demonstrate the financial effectiveness of their advertising.  Event study methodology utilizing measurement and comparison of stock prices may be one way to address this concern.  In this study, our results suggest that while advertising in the Super Bowl does not have a significant positive impact on a firm’s stock price the day after the Super Bowl, when considering windows from two to four days before and after there is a significant positive stock price effect.  Additionally, we found the current method advertisers use to judge the effectiveness of Super Bowl advertising (i.e. likeability with the USA Today poll and Advertising Age poll) had no significant relationship with financial effectiveness as measured by stock price.  This suggests that the methods marketers use to judge Super Bowl advertising effectiveness may not be good measures of success in financial terms.  Finally, our results suggest that if a firm does choose to advertise in the Super Bowl, they may want to pick the second quarter for their ad and that they need to maximize pre-Super Bowl publicity due to the impact on stock price before the Super Bowl.