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Designed to Respond to 'Objectionable' Editorial Coverage

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NEW YORK ( -- In the latest sign of advertisers’ heightened sensitivity to editorial coverage, embattled financial giant Morgan Stanley informed key publications of new guidelines that require its ads to be pulled as negative stories about it are published.
A major target of the new policy is 'The Wall Street Journal' in which Morgan Stanley placed $10.5 million in advertising last year.

'Cancel all ads'
“In the event that objectionable editorial coverage is planned, agency must be notified as a last-minute change may be necessary. If an issue arises after-hours or a call cannot be made, immediately cancel all Morgan Stanley ads for a minimum of 48 hours,” reads a key section of its planned addition to ad contracts, according to executives who’ve seen it.

But that doesn’t mean you won’t be reading about the company in the business press. Thanks to its underperforming stock and some former executives’ attempts to unseat CEO Philip Purcell, Morgan Stanley has proved a plentiful well for news. And with the editorial/advertising wall at most publications, the guidelines could prove nearly impossible to accommodate.

“It would not be a practical condition at The Wall Street Journal,” said Publisher Karen Elliott House. “The ad department has no knowledge of what stories are running in the next morning’s newspaper.”

Executives at some other publications spoke privately of how editorial policies meant that Morgan Stanley’s request could not be enforced to the letter, although marketers’ ads are sometimes subject to “pull policies” in which, under certain conditions, ads are removed from editions covering the marketers in question.

Among the publications that have received that directive or have had other discussions concerning Morgan Stanley with its media agency, Publicis Groupe’s Starcom USA, according to executives with first-hand knowledge of the situation, are Gannett’s USA Today; Pearson’s The Financial Times and The Economist; McGraw-Hill Cos.’ Business Week; The New York Times and Time Inc.’s Fortune. Executives and their representatives declined to detail how such directives, and publications’ individual “pull policies,” were handled internally. A spokeswoman for Dow Jones & Co.’s Wall Street Journal said the paper was contacted about the policy.

No comment
A Morgan Stanley spokeswoman declined to comment. A spokeswoman for Starcom referred calls to the client.

Given Morgan Stanley’s recent woes, its demands surprised few, even if they are new, and relatively new for the financial-services category.

Publishing executives also said there’s been a marked increase in such directives in recent years. “Absolutely,” said one high-ranking editor who wished to remain anonymous. “There’s a fairly lengthy list of companies that have instructions like this.”

The editor placed Enron as the turning point for companies expressing concerns over appearing anywhere near related coverage. Others referenced Sept. 11. Time Inc.’s People received criticism for failing to pull several marketers’ ads from an issue that graphically depicted the toll of that day.

$10.5 million
By far the biggest print outlet for Morgan Stanley's advertising is the Journal. Last year, according to TNS Media Intelligence, it took in over $10.5 million from the financial heavyweight, and for the first quarter the Journal scored more than $1 million. Last year Business Week, Time and Newsweek all notched over $2 million from Morgan Stanley.

Executives at Time and U.S. News, which took in more than $1 million from Morgan Stanley last year, refused to discuss arrangements with advertisers.

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