The financial services firm recently lost a high-profile case concerning the collapse of Sunbeam Products, although it says it will appeal. There's also been a well-publicized conflict within the company regarding CEO Philip Purcell's leadership.
When the company and its media buying agency, Starcom MediaVest Group, tried to limit the impact of future bad press with a new "ad pull" clause in its agreements with publishers, it garnered a new round of less-than-desirable coverage.
Blasted in the press
Advertising Age, a BtoB sibling publication, published an editorial that criticized Morgan Stanley, BP, General Motors Corp. "and any other advertisers involved in assaults on editorial integrity and independence. By wielding their ad budgets as weapons to beat down newsrooms, these companies threaten the bond that media properties have with their audiences, the very thing that gives media its value to advertisers to begin with."
One publisher whose magazine was approached with the Morgan Stanley contract refused to sign it. "This creates a huge, huge problem not just for us but any medium that has any ethics whatsoever. ... It's a very slippery slope [to make any concession on editorial]," said the publisher, who spoke on condition of anonymity.
The publisher added that he lost pages after refusing to sign the agreement. He couldn't say, however, if the two events were related.
Morgan Stanley, BP and their agencies were surprised by the outcry in response to what has become an increasingly common request in advertiser-publisher agreements. "Morgan Stanley stresses that the clause has no impact on the editorial decisions made by a publication," said Andrea Slattery, a Morgan Stanley spokeswoman. "We obviously have no say over that."
For some publishers, signing such an agreement is problematic in a number of ways. First, it is interpreted as a breach of ethics that can compromise editorial integrity by ceding a portion of editorial control to an advertiser.
"It doesn't matter if you're The Wall Street Journal or you are a very narrow trade publication, when you let an advertiser dictate your editorial, you may as well fold up your tent," said Peter Hoyt, president of Hoyt Publishing Co.
Sarah Fay, president of Carat's Isobar, agreed, saying: "It doesn't sound to me like a contract a publisher should be signing."
Additionally, the agreement poses significant logistical problems. At most publications, there is a strict separation between editorial and sales. The sales side doesn't know exactly what the editorial side plans to publish. That is especially true at dailies and other high-frequency publications.
"From a practical standpoint, the ads [in many publications] are laid out a day in advance," said Bruce Morris, exec VP at SourceMedia.
Code of ethics
American Business Media responded to the flap by issuing a press release emphasizing that its members adhere to a code of ethics, one section of which reads, "Editors must never permit advertisers to review articles prior to publication."
Both Morgan Stanley and BP spokespeople said their requests were misunderstood and the implications blown way out of proportion. They argued that the requests merely put into writing what has long been a common handshake agreement. For example, magazines had long pulled airline company ads after a well-publicized plane crash and ensured that advertisers were not placed near stories about them, whether the articles were negative or positive. The clauses, say the companies involved, merely codified these traditional courtesies.
Scott Dean, a BP spokesman, said that, contrary to published reports, BP did not have a "zero tolerance policy" regarding negative content. He added: "As a consumer of advertising, we think it's appropriate for us to ask where our ads will be placed and how they will be placed."
In a letter to Advertising Age that criticized the magazine's editorial, Gary LaPage, a media director at Orlando, Fla.-based Push, wrote, "I find it ironic that you talk about editorial integrity when it comes to a negative story, but don't mention how publications use positive stories to sell ads. I have been approached many times with the idea that a `good, positive' story is going to run, and it would be in my client's best interests to buy a nice, big ad to go with that."