Publication Type
Journal Article
Version
submittedVersion
Publication Date
1-2025
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
Research Areas
Corporate Reporting and Disclosure
Areas of Excellence
Digital transformation
Publication
Contemporary Accounting Research
First Page
1
Last Page
51
ISSN
0823-9150
Identifier
10.2139/ssrn.4559548
Publisher
Wiley
Embargo Period
12-2-2025
Citation
KOO, Minjae; WANG, Annika Yu; WANG, Yin; and ZHANG, Liandong.
Riding attention spikes: How analysts respond to advertising. (2025). Contemporary Accounting Research. 1-51.
Available at: https://ink.library.smu.edu.sg/soa_research/2098
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.4559548