The Impact of Advertising On a Company’s Stock Price

Marketers have made good progress in quantifying the impact of advertising campaigns on consumers, at least in the short run. These insights are important but do not address long-term metrics, such as firm (or company) value. This leaves firms uncertain about the true value of marketing investments, such as advertising. This study synthesizes research from more than 250 journal articles on advertising’s effects on firm value. The authors discuss why there should be an impact and review conditions under which the effect is positive, neutral, and negative. Finally, they report on the reverse effect; changes in firm value affect future advertising spending.