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Tarred with the Same Brush? Advertising Share of Voice and Stock Price Synchronicity

Tarred with the Same Brush? Advertising Share of Voice and Stock Price Synchronicity

Chee Cheong, Arvid Oskar Ivar Hoffmann and Ralf Zurbruegg

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Firms are sometimes “tarred with the same brush” by investors, instead of being traded based on firm-specific information. This is problematic when influential incidents such as product recalls happen, as firms in the same industry as the offender will then experience a drop in firm value despite not being involved in the recall themselves. Advertising can help firms avoid such a situation by differentiating themselves from their financial market competitors and communicating firm-specific information to investors.

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Related Marketing Courses: ​
​​​​Advertising and Promotion; Marketing Strategy

Full Citation: ​
Cheong, Chee, Arvid Hoffmann, Ralf Zurbruegg (2021), “Tarred with the Same Brush? Advertising Share of Voice and Stock Price Synchronicity,” Journal of Marketing 

Article Abstract
Choice architecture tools, commonly known as nudges, powerfully impact decisions and can improve welfare. Yet it is unclear who is most impacted by nudges. If nudge effects are moderated by socioeconomic status (SES), these differential effects could increase or decrease disparities across consumers. Using field data and several pre-registered studies, we demonstrate that consumers with lower SES, domain knowledge, and numerical ability are impacted more by a wide variety of nudges. As a result, “good nudges” designed to increase selection of superior options reduced choice disparities, improving choices more among consumers with lower SES, financial literacy, and numeracy than among those with higher levels of these variables. Compared to “good nudges”, “bad nudges” designed to facilitate selection of inferior options exacerbated choice disparities. These results generalized across real retirement decisions, different nudges, and different decision domains. Across studies, we tested different explanations of why SES, domain knowledge, and numeracy moderate nudges. Our results suggest that nudges are a useful tool for those who wish to reduce disparities. We discuss implications for marketing firms and segmentation.


Special thanks to Demi Oba and Holly Howe, Ph.D. candidates at Duke University, for their support in working with authors on submissions to this program.

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Arvid Oskar Ivar Hoffmann is Professor of Marketing, University of Adelaide Business School, Australia.