Which can you better recall: the model name of Saturn’s sport sedan or the lyrics to Bon Jovi’s Livin’ on a Prayer? Troy Clarke, President of GM North America, is guessing that you probably know more about Tommy and Gina than the 2008 Saturn Aura. Clarke concedes that Saturn has a “basic awareness problem” and that it is time to rethink the brand so that it becomes as memorable as a hit Bon Jovi song.

Saturn has sponsored Bon Jovi in the past and on April 4th they announce that Saturn would again sponsor the Jersey boys’ upcoming Lost Highway world tour. But does the Saturn brand resonate with Bon Jovi fans? Using Compete’s BehaviorMatch™ product, we can determine which automotive sites attracted the highest concentration of Bon Jovi fans—defined as people visiting or searching for Bon Jovi-related content—last April.

The good news is that with an index of 306, saturn.com attracted an above average concentration of Bon Jovi fans. However, they were number 7 on the list of automotive websites while lexus.com earned and index of 671. Meanwhile, toyota.com attracted the highest number of fans and with toyotafinancial.com indexing highly, it would appear that many of these fans are also Toyota owners.

What additional sponsorship opportunities might Saturn consider? To answer this, we examined which touring acts best attracted Saturn prospects and stood to benefit from the segment’s attendance.

John Mellencamp’s site, mellencamp.com attracted the highest concentration of Saturn prospects by a large margin. Were each of these prospects to purchase a ticket at the median price they would contribute $74,000 in touring revenue. However, that figure would be about $233,000 for the Lost Highway tour, which would go a long way to help out Tommy and Gina while giving the Aura and other Saturn cars a recognizable boost.

Playing to your base may be standard operating procedure in politics, but the left-leaning Huffington Post appears to have attracted a more diverse audience than one might expect. Last February, Golf Lovers and Technology Enthusiasts joined Environmentalists, Gay-Rights Activists and other “progressives” to comprise a portion of the over 1.9 million unique visitors to the Post that month. In fact, while 34% of the Post’s visitors also visit other liberal blogs like dailykos.com and crooksandliars.com, 27% of them frequent conservative blogs like townhall.com and redstate.com.

Using Compete’s BehaviorMatch™ product, we can dig even further into the composition mix of visitors to top political sites, including blogs and leading candidates’ websites. The table below compares these sites and measures the propensity of consumers of various behavioral segments to be found on the site. For example, Green Conscious consumers are 4.9 times more likely to be found on huffingtonpost.com than the average website.

Observations

• On average huffingtonpost.com attracted the highest segment indices, indicating its appeal to seemingly disparate groups like ID Protection, Family and Technology Interested Behavioral Segments
• Few segments over-indexed higher on candidates’ sites than on the blogs, but for those who did—such as NASCAR, Retirement and African-American Segments—huffingtonpost.com appeared to be their blog of choice
• While Golf, Business and Family Interested Behavioral Segments indexed highest at huffingtonpost.com, they still indexed higher on McCain’s site than on either of the two Democrat candidates’ sites
• The Tech Savvy Segment is most skewed toward the huffingtonpost.com, where they are 5 times more likely to be found than on the average website, while the Religion Interested Segment is most skewed toward townhall.com where they are over 3 times more likely to be found than on the average website
• Country Music and NASCAR Fan Segments appear most conflicted over the choice between Clinton and McCain as each group over-indexes on these two candidates’ sites, but not so much on Obama’s site

With the dour state of the economy, would you be at all interested in investing ten-grand in a portfolio that returned 45% last year? If it was the Google Finance portfolio described in a previous blog, it wouldn’t be doing too much for you because you’d be down over 30% already. On average, the portfolios from our previous blog lost 24% of their value, were over 50% more volatile than the market and had weekly variances of nearly double the S&P 500.

This time we implemented a couple of changes. First, we tracked these portfolios on a weekly rather than monthly basis. Second, portfolio weights were dynamic; they were reconfigured each week to reflect actual query volumes. Of 215,000 unique visitors searching for the ten most popular securities on MSN Money in the first week of 2008, 31,000 of them queried Citigroup, Inc, which allocated 14% of the portfolio into that security. Since that figure dropped to 11% in the following week, the security’s weight in the portfolio was adjusted down by 3%.

Observations:

• Google Finance – Heavily vested in declining tech stocks like Google, Apple and Baidu.com, this portfolio has a balance just under $7,000. The combination of stocks in this portfolio are still quite sensitive to market fluctuations, while the growth in Caterpillar’s price may have tempered portfolio variance to only 41% over the market.
• Market Watch – With unique stocks and declining stocks like FuelCell Energy and Shuffle Master, the Market Watch portfolio has a balance of $7,400. This portfolio is currently the most sensitive to market fluctuations, and with all its stock heading south, it had more than twice the weekly variance of the market.
• Yahoo! Finance – This portfolio had a March 22 balance of $8,100 and this portfolio has suffered the least. With the inclusion of stocks like Bank of America, Washington Mutual and GE it is also the least sensitive to market fluctuations, but still has double the market’s weekly variance.
• MSN Money – With a balance of $7,800, this portfolio is in the middle of the pack. While it is more sensitive to market fluctuations than the Yahoo!, this portfolio’s combination of bank and technology stocks give it the least weekly variance of any FSE portfolio.
• CNN Money – This portfolio lost 21% since the beginning of the year, which left it with a balance of $7,900. It is below the FSE portfolio average in terms of market sensitivity and includes many of the same securities as the MSN portfolio. However, as a testimony to the power of portfolio optimization, these securities fail to offset one another resulting in a weekly variance of nearly 1½ times the market.

They say a butterfly can flap its wings in China and eventually cause a windstorm in the US. In 2007, that windstorm played-out as a surge of stateside interest in American Depository Receipts (ADRs) from China, i.e. Chinese stocks listed on US markets. A company called China Digital TV (CDTV) may have played the role of the butterfly. In October, after two years of dominating its product segment, CDTV listed on the NYSE.¹

In 2007, 38 of the 500 most heavily searched stocks on Financial Search Engines (FSEs), such as CNN Money or Yahoo Finance, were Chinese ADRs. Searcher counts to these 38 stocks grew by an average of 9% each month, while the remaining 462 stocks grew at 1%. From August to September, the number of Chinese ADR searchers grew by 245% and again by 152% in the following month. In October, this volume peaked as each ADR attracted an average of 41,000 searchers.

China’s apparent tech bubble played a significant role in driving this trend. And in 2007, US investors seemed eager to apply the lessons of the US tech bubble in this new context.² Technology sector stocks accounted for over 50% of Chinese ADR searcher counts, while Baidu.com, a Chinese search engine, attracted 96,000 searchers each month. Baidu.com finished 2007 with 60% revenue share in the Chinese Search Engine market—a market poised to grow by 50% in each of the coming years—which made it particularly attractive.³ In Baidu.com’s case, research, particularly on FSEs, translated directly into action on Wall Street. Throughout 2007, the stock’s average trading volume increased by 40 shares with each additional searcher who viewed BIDU on an FSE.

Nevertheless, Baidu.com’s influence on the general interest in Chinese ADRs was second to that of CDTV when it listed on the NYSE. LDK Solar, which listed on the NYSE a few months before CDTV, also bore some influence on the general trend. While the promise of high organic growth gave credence to Chinese ADRs, it was the listing of stocks that inevitably drove the interest of searchers in the US last year.

¹Cheung, Wallace. “The China Digital TV reformer.” CREDIT SUISSE (Hong Kong) Limited. 2007
²Cowan, Lynn. “IPO Focus: Chinese listings in U.S. recall the dot-com days; As share prices soar, some see a bubble; different this time?” Wall Street Journal Asia [Hong Kong] 29 October 2007: 19.
³Kwong, Kar Han and Mark May. “BIDU: Initiating Coverage with a Hold Rating.” An Investment Analysis by Needham & Company, LLC. 2007.

Would you invest $10,000 in a portfolio configured by thousands of strangers researching stocks on Google Finance? Few reasonable people would, but had you done so on January 3rd, 2007, you could have had an extra $4,500 to spend by New Year’s Eve. But this would have been a risky investment compared to those based on other Financial Search Engines (FSEs).

Last summer, we segmented stock searchers by their FSEs of choice. In July we noted that Market Watch users displayed more interest in riskier, conservatively-valued stocks than other users. Now, with aggregated FSE data for 2007, we can determine whether these patterns continued throughout the year.

Suppose that on January 3rd, 2007, we gave $10,000 to “portfolio managers” representing each FSE. We instructed them to invest this money proportionally in their ten most heavily searched stocks, assuming a buy and hold strategy for the year. Since an average of 16,000 searchers looked-up Apple on CNN Money each month, Apple comprised 12.8% of CNN’s “portfolio,” or $1,280. That would have bought about 15 shares of Apple that day.

Now, in January 2008, we can see how each portfolio performed:

• The Google Finance portfolio was the most unique, most profitable and the most volatile, growing 45% for the year. Google and Apple dominated this portfolio. It also included the Chinese search engine Baidu.com, which grew 146% for 2007.
• Compared to Google, the Market Watch portfolio grew 30% for the year but was only 5% less volatile.
• The Yahoo! Finance portfolio comprised 65% of All 2007 Searchers, but came in third in growth on high volatility. Ironically, it was the outlier of the lot.
• CNN Money and MSN Money were the most evenly distributed “portfolios” and thus had correspondingly lower growth and lower volatility.

These “portfolios,” configured as they were, had high growth but came with significant risk. However, with the benefit of hindsight, the stocks within them, namely Apple, Exxon, Intel, eBay, UPS, and Wal-Mart could have made-up a sensible investment. Optimally configured, we could have seen growth of 29% with a beta coefficient as low as 0.56 against the S&P. We will begin tracking these FSE portfolios on a monthly basis in 2008 and update with how you could be doing.

Check out an updated version of this post for early 2008 here.

Last summer, we looked at financial search engines, such as Google Finance and Market Watch, to see if we could find any correlations between stocks’ search volumes and their share prices. With all 2007 data now available, we return to this theme and present last year’s stock search volume Top 10. Of these, the top three searched securities were Apple, Google, and the DJIA.

Apple had an average of 362,000 unique searchers per month. Google was not far behind with an average of 330,000 unique searchers per month, while the DJIA drew 261,000 per month. These numbers decrease exponentially as we looked down the list. The top 100 stocks averaged 91,000 unique searchers per month and the top 500 only 23,000. So, like everything else on the internet, stock search volumes have a very long tail.

We began our correlation analysis with Google. We found that for every increase in Google’s monthly high of one dollar, an additional 1,100 to 1,600 unique searchers checked-up on the stock online.

For Apple and Microsoft, this relationship was not as strong, but a trend still existed. For each dollar increase in their monthly highs, Apple attracted at least 900 additional unique searchers and Microsoft a minimum of 9,500. But for a particularly steady security, like GE, such a correlation was non-existent.

Corporate events, such as product releases, also drove stock searches in 2007. With the marketing, pricing and release of the iPhone making headlines last year, it may be unsurprising that Apple was the most heavily researched stock in 2007. Of course, interest in the iPhone itself is better measured in traffic to the Apple store and/or the Apple online forum. Traffic to these sites peaked before the holidays but remained flat from June to July. Meanwhile, Apple’s stock search volume surged by 48% just after the product release and fell off rapidly thereafter.

Our preliminary conclusion is that stock search volumes measure interest in the financial impact of meaningful corporate happenings. This was also evident with the increases in stock search volumes after Microsoft’s revenue-generating release of Halo 3 and Rupert Murdoch’s successful acquisition of Dow Jones & Co. Certainly, there are countless other stories and correlations hiding in our data. In the coming months we hope to uncover them and share them with you as we do.