Morgan Stanley: No ads for you!

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What does the revolt at Morgan Stanley have in common with a plane crash? The company doesn't want its ads anywhere near coverage of the mess.

In the latest sign of advertisers' heightened sensitivity to editorial coverage, embattled financial giant Morgan Stanley informed key publications of some new ad guidelines.

"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 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 publications that have received that directive or have had other discussions concerning Morgan Stanley with its agency, Publicis Groupe's Starcom USA, said executives with first-hand knowledge of the situation: Gannett's USA Today, Pearson's The Financial Times, The Economist, McGraw-Hill Cos.' Business Week, The New York Times and Time Inc.'s Fortune. Executives and their spokespersons 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.

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."

This 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 was criticized for failing to pull several marketers' ads from an issue that graphically depicted the toll of that day.

By far the biggest print outlet for Morgan Stanley 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 of '05 it scored over $1 million. Last year Business Week, Time, and Newsweek all notched over $2 million.

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

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