Current Issue Summary
June 2024 (Vol. 64, Issue 2)
The Impact of Advertising On a Company’s Stock Price: Conditions for Positive, Neutral, Negative, And Reverse Effects
Dive into the interconnections between marketing strategies and company value, focusing particularly on how advertising impacts stock prices, with this study by: Shuba Srinivasan (Boston University) and Dominique M. Hanssens (University of California, Los Angeles). They explore both the direct and indirect effects of advertising, drawing on over 250 journal articles. The study reveals that while advertising generally enhances company value by solidifying brand reputation among investors, the outcome can vary under different conditions. Additionally, the research discusses the reverse influence, where fluctuations in company value can dictate future advertising expenditures. This comprehensive analysis not only aids managers in aligning marketing with financial performance but also pinpoints areas requiring further exploration to solidify our understanding of marketing’s financial impacts.