Publication Type

Journal Article

Version

publishedVersion

Publication Date

12-2025

Abstract

Product market advertising, while containing little new information, triggers spikes in investor attention. Using weekly advertising data, we find that sell-side analysts issue optimistic earnings forecasts in response to heavier advertising in the prior week. This effect is not driven by confounding earnings or product news. It is more pronounced for experienced analysts and analysts affiliated with brokerages relying solely on trading revenues. The optimistic forecast bias intensifies the impact of advertising on investor trades, especially on retail buying, of the underlying stock during the following week. Overall, analysts appear to issue optimistic forecasts to exploit retail investor attention spikes induced by advertising.

Keywords

Investor Attention, Advertising, Analyst Forecasts, Earnings Forecast Optimism

Discipline

Accounting | Advertising and Promotion Management | Finance and Financial Management

Research Areas

Corporate Reporting and Disclosure

Areas of Excellence

Digital transformation

Publication

Contemporary Accounting Research

Volume

42

Issue

4

First Page

2683

Last Page

2713

ISSN

0823-9150

Identifier

10.1111/1911-3846.13068

Publisher

Wiley

Embargo Period

12-2-2025

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Additional URL

https://doi.org/10.1111/1911-3846.13068

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