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The effects of internet search intensity for products on companies’ stock returns: a competitive intelligence perspective

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Abstract

Does internet search intensity (ISI) for a company’s product affect the company’s stock returns? How about the ISI for its rival product? How does ISI for the company’s product affect the ISI for the rival and vice versa? How is the evolution and persistence of these effects over time? To answer these questions, this study examines three pairs of rival products: Apple’s iPhone versus Samsung Galaxy, Intel versus AMD processors, and Netflix versus Hulu. Guided by psychological and marketing theories, Vector Autoregressive models were constructed to estimate the effects of ISI for the rival products (1) on the stock returns, and (2) on each other. Results showed that (1) ISI for the products significantly impacts the stock returns, and (2) the effects of ISI for one product on the other are not only significant but also asymmetrical. This multidisciplinary study integrates marketing analytics and financial phenomena and thus contributes to multiple research streams. It also finds that companies’ stock returns can be affected by the consumer online information search, which is responsive to marketing activities. Thus, marketers stand to benefit from leveraging this study’s findings to elevate their role in enhancing one of their companies’ most critical performance metrics—stock returns.

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Notes

  1. A shock in this context refers to a positive one standard deviation change to an input.

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    Saeed Tajdini

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Tajdini, S. The effects of internet search intensity for products on companies’ stock returns: a competitive intelligence perspective. J Market Anal 11, 352–365 (2023). https://doi.org/10.1057/s41270-022-00155-w

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