Big Advertisers Quit Martha Stewart Exploitation Corporation

26 August 2003

Martha Stewart Living Omnimedia, the corporation formed to exploit all things Martha, has felt the chill wind of advertiser disapproval in the run-up to the lifestyle guru’s indictment on charges of perjury, fraud and obstruction of justice [WAMN: 05-Jun-03].

Advertiser reaction is typified by Unilever, which in 2002 spent over $4.8 million (€4.43m; £3.06m) with MSLO’s flagship magazine. In 2003 to date the personal and household products giant has spent just $130,000. It is not alone. Similar behaviour by other marketers contributed to an earnings collapse of 86.4% in the second quarter and projections of a full year loss for 2003 of between $7m and $9m.

According to TNS Media Intelligence/CMR many advertisers who spent upward of $1 million in 2002 in Martha Stewart Living magazine have yet to put down a single cent for this year (to July). Among them are Avon Products, Apple Computer, Federated Department Stores, Hallmark Cards, Home Depot, Levi Strauss, Pfizer, Sears Roebuck and Toyota.

Nor is the problem confined to advertising support. Retail sales of Stewart’s personally endorsed Everyday product range at Kmart have declined on a same-store basis to below the minimum guaranteed royalties level.

Pronounces brand consultant Robert Passikoff: “It [the Martha Stewart name] was one of the strongest brands around. I haven't seen any [drop] this big, ever. It will never be the brand it was.”

But Sharon Patrick – who took over from Stewart as MSLO chief executive after she stepped down following the insider trading indictment – is understandably not of like mind.

She cites the successful launch earlier this year (before the style maven’s arrest in June) of Everyday Food, the latest magazine to bear her imprint. Also the July sales via Kmart of Stewart’s patio furniture line, up 12% year-on-year.

Patrick adopts a doughty defensive stance. “We stand for quality. We stand for how-to expertise. We stand for value, we stand for affordability, and we stand for style. Those brand elements are not at question.”

But what, enquired a sassy reporter, will happen to the brand if Stewart is found guilty and sent to jail? Patrick remained resolute: “The rebound will be more difficult, take more time, and require further investment – but is achievable.”

Data sourced from:; additional content by WARC staff