Background Noise? TV Advertising Affects Real Time Investor Behavior
62 Pages Posted: 20 Jan 2020 Last revised: 12 Feb 2020
Hong Kong University of Science & Technology (HKUST) - Department of Finance
Date Written: October 24, 2019
Using minute-by-minute data, we study the real-time effects of TV advertising on retail investor search for financial information and their subsequent trading activity. Our identification strategy exploits the fact that viewers in different U.S. time zones are exposed to the same national advertising at different times, allowing us to control for contemporaneous confounding events. We find that an average ad leads to a 3% increase in SEC EDGAR queries within 15 minutes of the ad’s airing. The ad-induced queries on the advertiser increase trading volume and contribute to a temporary rise in the stock price.
Keywords: Advertising; Limited Attention; Retail Investor Behavior
JEL Classification: G11, G12, L15, M37
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