Stock Price of Olympics Advertisers Out-Performs S&P 500

EAU CLAIRE, Wis., Feb. 10 /PRNewswire/ -- With increasing attention being paid to marketing accountability, firms must justify their advertising expenditures with financial results. Drs. Rama Yelkur and Chuck Tomkovick, marketing professors at the University of Wisconsin-Eau Claire, present a study of Olympic advertisers who ran ads on NBCU's broadcasts of the 2000, 2002, 2004, 2006 and 2008 Olympic Games. 

All publicly traded firms that ran ads during those Olympics telecasts were analyzed using Yahoo! Finance data, and the aggregate stock price of those publicly traded firms beat the Standard & Poor's 500 performance by four percent in the four months following the Games.  This represents the Monday before the Olympic Games through to December 31, 2000/2004/2008 for the Summer Games and June 30, 2002/2006 for the Winter Games.

"This study examines the financial performance of firms that invest in Olympics ads and demonstrates there is a net positive effect," says Yelkur. "During the four month period of time after an Olympics, the stocks of the companies that ran ads in the Olympic Games outperformed the S&P stocks by four percent."

"It's a significant finding, because in essence, Wall Street rewards firms that run ads in the Olympic Games," adds Tomkovick. "Given the large market caps involved, an increase of four percent over the S&P 500 translates into billions of dollars of stock price improvement for those holding these investments."  The researchers also note that the study indicates the portfolio of publicly traded Olympics stocks is superior to the S&P 500 during this period, rather than on an individual stock basis.

In a control period of 20 consecutive trading days starting three months prior to the Monday before each of the last five Olympic telecasts, Olympics Stocks underperformed S&P 500 by one percent.  That is, the firms that invest in the Games outperform the market during the post-Games period, but not necessarily in a control period three months prior to the Games.

An article authored by the researchers on this topic "Olympic Advertisers Win Gold, Experience Stock Price Gains During and after the Games," will appear in the Journal of Global Academy of Marketing Science in April 2010.  Tomkovick and Yelkur have conducted Super Bowl advertising likability and effectiveness research for over a decade and the findings of their work have been published in The New York Times, Forbes, Wall Street Journal, in the popular press in North America and in a variety of academic journals.

SOURCE University of Wisconsin-Eau Claire