ABSTRACT
Advertising practitioners are undergoing pressure to be more accountable for advertising and to communicate its added value to top management as well as to shareholders. Advertising practices that include digital advertising can help build long-term assets and can be leveraged to deliver financial and firm value effects. This chapter suggests that an event study would be a supplemental, but appropriate, method for evaluating the financial value effects of digital advertising practices. Event studies have been frequently employed to detect the effects of event-induced variance on abnormal returns in the field of finance and economics as well as some advertising studies, but have virtually never been used in the context of digital advertising. The exploratory event study found that launching a Twitter account as a firm's digital advertising channel has a negative impact on shareholder's value, and further analysis revealed that unexpected negative abnormal returns are attributable to a large number of industrial goods firms.
