What happens when Wall Street meets Madison Avenue? Despite billions spent annually on advertising, surprisingly little research has explored how these investments impact a company's stock price—until now.

Shubha Srinivasan, the Adele and Norman Barron Professor of Management and Professor of Marketing, pulls back the curtain on this critical relationship in our fascinating conversation about her groundbreaking research synthesizing findings from over 250 studies. She reveals three distinct pathways through which advertising influences firm valuation: the indirect route (via increased sales and profits), signaling value to investors, and building long-term brand assets.

The disconnect between marketing and finance departments has historically created blind spots, with marketers celebrating metrics like brand awareness while CFOs demand hard ROI numbers. Srinivasan's research bridges this gap, providing marketers with the ammunition they need when facing budget scrutiny. Perhaps most compelling is her finding that a 10% increase in customer retention can translate to a 7% boost in stock price—a connection that transforms how we should evaluate marketing effectiveness.

Not all industries experience equal benefit from advertising investments. Consumer-facing sectors like retail, CPG, and tech show stronger connections between advertising and stock performance, while B2B industries might benefit more from relationship-building than traditional advertising. Meanwhile, price promotions present an interesting paradox—consumers love them, but investors often view them as value-destroying.

The key takeaway? Marketing leaders must move beyond defending their budgets with short-term metrics and start connecting their efforts to financial outcomes investors care about: revenue growth, margin improvements, risk reduction, and predictable cash flows. By speaking the language of investors and measuring what endures rather than just what's immediate, CMOs can reposition marketing from a cost center to a strategic investment in the company's future.

Ready to transform how you view marketing's financial impact? Listen now and discover why the evidence is clear—advertising is far more than just a cost; it's a powerful driver of lasting company value that savvy investors are already noticing.