Rice professors say publicly traded companies can expect increase in stock sales after big ad buys.
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 who 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, an associate professor of management 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."
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