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Share price reactions to advertising announcements and broadcast of media events

  • Greg Filbeck

    (Penn State Erie, The Behrend College, PA, USA)

  • Xin Zhao

    (Penn State Erie, The Behrend College, PA, USA)

  • Daniel Tompkins

    (Niagara University, NY, USA)

  • Peggy Chong

    (Niagara University, NY, USA)

Registered author(s):

    Over the last two decades, marketers have gravitated toward placing their ads in specific television programs such as the Super Bowl, Academy Awards, and the last episodes of sitcoms. While anecdotal evidence of positive outcomes in the form of increased sales, phone inquiries, and hits on the web sites of advertisers, there has not been any credible measurement of investor returns in this expensive strategy. We find that firms advertising for the first time, with greater advertising expenditures relative to sales, and with more effective|creative campaigns fare better in terms of the market reaction to their campaigns. Copyright © 2008 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/mde.1450
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    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 30 (2009)
    Issue (Month): 4 ()
    Pages: 253-264

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    Handle: RePEc:wly:mgtdec:v:30:y:2009:i:4:p:253-264
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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    1. Stegeman, Mark, 1991. "Advertising in Competitive Markets," American Economic Review, American Economic Association, vol. 81(1), pages 210-23, March.
    2. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
    3. McConnell, John J. & Muscarella, Chris J., 1985. "Corporate capital expenditure decisions and the market value of the firm," Journal of Financial Economics, Elsevier, vol. 14(3), pages 399-422, September.
    4. Kyle Bagwell & Garey Ramey, 1990. "Advertising and Coordination," Discussion Papers 903, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    5. Kihlstrom, Richard E & Riordan, Michael H, 1984. "Advertising as a Signal," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 427-50, June.
    6. Bruce M. Burton & A. Alasdair Lonie & David M. Power, 1999. "The Stock Market Reaction to Investment Announcements: The Case of Individual Capital Expenditure Projects," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 26(5&6), pages 681-708.
    7. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    8. repec:ner:tilbur:urn:nbn:nl:ui:12-358916 is not listed on IDEAS
    9. Gustavo Grullon & George Kanatas, 2006. "The Impact of Capital Structure on Advertising Competition: An Empirical Study," The Journal of Business, University of Chicago Press, vol. 79(6), pages 3101-3124, November.
    10. Mathur, Lynette Knowles & Mathur, Ike, 2000. "An Analysis of the Wealth Effects of Green Marketing Strategies," Journal of Business Research, Elsevier, vol. 50(2), pages 193-200, November.
    11. Fred S. Zufryden, 1987. "A Model for Relating Advertising Media Exposures to Purchase Incidence Behavior Patterns," Management Science, INFORMS, vol. 33(10), pages 1253-1266, October.
    12. Robert P. Leone, 1995. "Generalizing What Is Known About Temporal Aggregation and Advertising Carryover," Marketing Science, INFORMS, vol. 14(3_supplem), pages G141-G150.
    13. Jain, Prem C, 1985. " The Effect of Voluntary Sell-off Announcements on Shareholder Wealth," Journal of Finance, American Finance Association, vol. 40(1), pages 209-24, March.
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