The Super Bowl may involve an American football game, but plenty of people watch it for the commercials. Companies running ads during the game spend big to entertain viewers with celebrity cameos and smart punchlines, in hopes of generating buzz and sales.
But their ads may also spark interest among potential investors, suggests research by University of Oregon’s Ioannis Branikas and Gabriel Buchbinder, who was a postdoctoral fellow at the University of Oregon and now works for the South Carolina Department of Health and Environmental Control.
Whether television ads reach investors as well as consumers has been an area of inquiry for researchers, who have analyzed investment interest in companies that advertise against those that do not. These comparisons have been imperfect because companies can differ in a number of ways, which makes it hard to isolate the effects of advertising.
Branikas and Buchbinder took a different tack: they measured a company (namely its ability to attract investor attention) against itself in multiple television markets on the biggest television advertising day of the year, Super Bowl Sunday. The National Football League’s championship game draws about 100 million US viewers each year and commands upward of $5 million for just 30 seconds of advertising air time.
The researchers collected Nielsen Ad Intel viewership data, housed at Chicago Booth’s Kilts Center for Marketing, on the 56 largest TV viewership markets and calculated the percentage of the potential audience that tuned in for each Super Bowl from 2011 to 2018. They then used Google Trends to determine the number of searches the day after the game that included both the names of S&P 500 companies that advertised during the game and the word stock.
The two markets with a team in the game saw about an 11 percent increase in the size of the audience tuning in to watch, and those markets saw stock searches increase 140 percent relative to the average of all markets, the researchers find. This is significant, they write, because the audiences in those two markets were likely more invested in the outcome of the game than in the ads, and yet the commercials appear to have still enticed viewers to consider the companies that advertised as potential investments.
Retail investors tend to fill their portfolios with local stocks, so could companies headquartered near the cities with Super Bowl teams simply be buying up ad time? Branikas and Buchbinder rule this out. Using data on the timing of ad buys, they find that ad slots are generally purchased well in advance of knowing which teams will advance to the championship game.
Advertisers within 100 miles of a market did the best in terms of stock searches on the Monday after the game. But there was a significant boost in stock searches for all the big companies that ran ads, even those 250 miles or more outside a market. The expected search traffic for an advertiser 500 miles away was six times higher than if that same company were 250 miles away but did not advertise.
The effects on investors were short lived, however. When the researchers looked at the Tuesday and Friday after the game, they find that search traffic returned to normal.
And while the ads increased investor attention, it’s not clear that they enticed anyone to open their wallets.
“Whether households’ investments will actually take place depends on their information and transaction costs as well as their expectations after they conduct their research on stocks,” the researchers write, adding that future research could reveal more about the effects of ads on investors’ decisions and behavior.