The Effect of Advertising Slogan Changes on the Market Values of Firms

Abstract

A variety of factors motivate managers of firms to change advertising slogans. Principal among these factors is the desire to improve the financial performance of the firm, which should be viewed positively by investors, and should result in a higher market value of the firm. The purpose of this paper is to examine the effects of announcements of advertising slogan changes on the market values of the firms. A sample of 87 firms that announced advertising slogan changes was compiled for analysis. The results show that there are significantly positive market-value effects associated with announcements of advertising slogan changes. The results suggest that judicious use of advertising slogan changes is beneficial for firms.