Scandal could mar brand called Martha

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Behind the headlines trumpeting moment-to-moment developments in the federal investigation into Martha Stewart, there's the buzz of marketers and media buyers quietly discussing contigency plans.

As there's been no person that embodies-literally-a major brand like Ms. Stewart does, there's no easy parallel to this situation, and no agreement as to what the fallout may be. "Some blue-chip advertisers who are very well-heeled are going to want to walk away from this unfortunate spotlight," said a prominent media buyer.

Ms. Stewart's eponymous empire includes TV shows, magazines, a catalog and online retailing business, as well as products sold through Kmart Corp. and other retailers.

Key marketers were tight-lipped on the matter. A spokeswoman for General Motors Corp., which advertises in Ms. Stewart's magazine but not on her TV show, said the automaker has "no plans to cancel or change commitments at this time."

"I don't think there's been any deterioration" in advertising, said Eric Blankfein, VP-director of planning at Horizon Media, New York, "aside from all the bad press ... the magazine is still pretty damn strong." Horizon's clients have not changed plans for the title.

Through May of this year, Martha Stewart Living ran 710.4 ad pages, down 2.3% from the same period last year, according to Publishers Information Bureau. Advertisers typically buy magazine ads at least two months in advance, so any pull back in spending would not be noticeable until fourth-quarter issues. Key advertisers for the company include Apple Computer Corp., DaimlerChrysler, Gap, Maybelline and Ralph Lauren Co.

Ad staffers for Ms. Stewart's magazine did not return calls or referred them to a spokeswoman. A spokeswoman said "there have been no schedule changes in our magazines due to this matter."

continued investigation

The investigation of Ms. Stewart's trading of ImClone stock continues. But at issue is perhaps less the outcome of the investigation than the more mystical question of what this does to the brand-a subject on which brand experts are more pessimistic than marketers.

"An important element of the brand is authenticity," said Don Pettit, president-CEO of brand identity firm Sterling Group. "A lot of Martha's credibility is built on her integrity and authority, and that's exactly what's being called into question."

Paula Ausick, director of brand equities for Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, Chicago, said she'd conducted an informal survey of women and found most still like Ms. Stewart's products. She found two main groups of women, one who felt Ms. Stewart was being "picked on" and deserved support; another that saw her as a person who "exhibits greed, and who got a hand caught in the cookie jar."

"I don't know how big that group is," Ms. Ausick said, nor how big it may grow with new revelations. "It needs to be monitored."

Others play wait-and-see. "If America starts to care and readership and viewership goes down, then advertisers will leave," said Jon Mandel, co-managing director of Grey Global Group's MediaCom.

The scandal and its affect on Ms. Stewart's business is "something that's being discussed. It would be remiss if we didn't," said Melissa Pordy, senior VP-director of print at Zenith Media, New York, who drew a distinction between Ms. Stewart's products and a "purely personal" situation.

In an e-mail, a spokesman for Kmart stated the company, which declared bankruptcy in January, never discusses sales or budgets related to its Martha Stewart Everyday line, but he added "the ad spend remains unchanged, and there are no plans to alter its existing advertising plan." He added her products are still "outpacing the overall company sales trend."

contributing: alice z. cuneo and jean halliday

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