Back in 2008, we debunked research that concluded Super Bowl ads were a guaranteed booster to stock prices for the companies that ran big-game TV spots. We did it again last year. Now, third time’s a charm.
[As an aside, we are saddened to learn that the professor who originated Super Bowl stock return research, Chuck Tomkovick, retired this past December to focus his efforts on a battle with brain cancer.]
As we noted last year, the analysis is tedious:
- Determine which spots ran nationally during the game
- Tie each spot to a parent company
- Determine if parent is a public company
- If the parent is non-U.S., determine if it trades U.S. ADRs
- Obtain the proper stock symbols
- Adjust for anomalous events
- Track the S&P 500 index as the benchmark
We ended up with 25 companies in our 2013 Super Bowl Stock Portfolio, five more than last year. Since each announced its media buy at various times throughout 2012 and 2013, we set two arbitrary “buy” dates for our portfolio – one on the Monday before Super Bowl Sunday, and one on that Friday.
We then set two sell dates – one at the close of the Monday following the game, to determine immediate impact of ads on stock price, then at the week’s close to measure residual impact, if any, from YouTube viewings, social media hype, etc.
We removed BUD as the stock plunged 6% due to a negative FTC ruling on its Modelo acquisition. PVH was dropped, as it received an anomalous 3% bump due to its announced addition to the S&P 500 Index. Finally, BBRY was removed due to its catastrophic January 30 press event and immediate smackdown from Wall Street (> 10%).
Here, then, are the results of the remaining 22 advertisers (SBSP = Super Bowl Stock Portfolio).
Jan 28 thru Feb 4
> S&P 500: down 0.5%
> SBSP: down 1.5%
Jan 28 thru Feb 8 (Prof. Tomkovick’s original holding period)
> S&P 500: up 1.0%
> SBSP: flat (0%)
Feb 1 thru Feb 4
> S&P 500: down 0.2%
> SBSP: down 1.3%
Feb 1 thru Feb 8
> S&P 500: up 1.3%
> SBSP: up 0.2%
In 2012, the Super Bowl Stock Portfolio lost out to the S&P 500 after accounting for transaction fees (i.e., the cost to buy and sell 20 different stocks). This year, we don’t even need to go that far to conclude that buying stocks in Super Bowl advertisers was a waste of money.
Back in the day, Professor Tomkovick and team declared that the Super Bowl was a “tradable event.” This year it was also. But only if you shorted the stocks of the companies that advertised during the big game.