Is Investor Attention for Sale? The Role of Advertising in Financial Markets

Using daily advertising data we document that print ads, especially in weekend business publications, cause an increase in Google searches for company tickers, suggesting that ads draw investor attention to firms’ financial information. We further find that ads by companies with significant retail-investor ownership trigger increased share turnover on the day of the ad but do not have an effect on the firms’ stock price. Our results contrast with findings in prior papers which use lower frequency advertising data. Daily data allow us to control for reverse causality and several potentially omitted variables, suggesting that endogeneity may be responsible for some of the results in prior literature on advertising and financial markets.