Martha Stewart & Public Relations

Cashing in on Martha Stewart's Conviction

This news from Reuters is sad, but not surprising. Hoping to cash in once more on the reality TV craze, CBS is creating a reality TV show designed to find the next Martha Stewart. Um, yeah. Good luck with that.

Brand Personification

Wharton School offers up an interesting article on Martha Stewart entitled: When the CEO is the Brand, But Falls from Grace, What's Next?

The article explores Brand Personification—when the brand is tied to an individual. Several great examples of businesses moving on after the CEO/brand leaves the company are offered. While there were not a lot of examples directly relevant to Stewart's case, one good point is to strike a balance when you rely on the CEO as your brand:

"Perhaps the key is to strike a balance, where the company benefits from an appealing public personality like Martha Stewart, Donald Trump or Michael Dell, while it builds a strong identity that doesn't rely on the individual. That strategy is suggested by Alan Siegel, chairman and CEO of the eponymous Siegel & Gale, a strategic branding company that developed the Dell brand image.

'Like Martha Stewart, Donald Trump places his name on everything he gets involved in: buildings, gambling casinos and airlines. He is a visible, vocal brand voice,' says Siegel. 'Ralph Lauren and Michael Dell, on the other hand...have cleverly created a separate, institutional identity that doesn't make them so vulnerable if they have a personal problem.'”

MSLO was moving in that direction with Real Simple and some other magazine projects that do not bear Martha's name. It will be interesting to see how much more they will need to change at MSLO to strike a balance.

Thanks to Robb Hecht at PR Machine for the link.

"News" for K-Mart

Research sells a story. Case in point: HomeWorld Business magazine.

The trade publication did a survey to see if consumers would continue to purchase her products post-conviction. The research validated what we already know; Martha's retail business has not been impacted by the conviction. This has been reported on several times in the trial's aftermath.

But I give HomeWorld Business high marks for riding the Stewart wave. It is garnering them additional awareness and vetting them as a credible home retail business source.

Research is a powerful public relations tactic. This allows me to segue to my research soapbox and make a general observation.
Marketers everywhere clamor for metrics, yet most are still reticent to spend money on research. If you want to measure something at the end of the program, you must start by measuring it at the front end of the program. Research and metrics are directly related.

Martha Hangs On At MSLO

Martha Stewart stepped down from her executive post, but is staying on at MSLO. This allows her to bring her creative force to the company while possibly addressing corporate ethic issues. It is a slippery slope, but a clear sign Martha is sticking to her story and MSLO is preparing for the months ahead.

The big question now is, "How much prison time will Martha be sentenced to serve?" Predictions vary widely.

PR Fuel offers some good insight into the Martha Stewart scandal. Once the guilty verdicts came in, seemingly *everyone* was quick to point out what Martha did wrong from a public relations perspective. It's a pretty easy position to take. Ben shares some thoughts we have discussed before noting she was consistent if nothing else. This consistency is already paying off. She's kept her job at MSLO...albeit with a demotion.

Martha Stewart—from Asset to Liability

Martha Stewart's guilty verdict turns her from an asset to a liability. This will fuel a lot of name changes. By simply removing her name, Martha's newspaper column titles are already being shortened. As I predicted in my last post, I think MSLO will follow suit. Amongst other changes, they will reposition themselves as MSLO instead of Martha Stewart Living Omnimedia.

This would follow Martha's physical removal from the company she founded. Martha's departure from MSLO comes as no surprise. What initially surprised me was that Martha tried to stay on at MSLO. But this fight actually makes sense.

To resign from MSLO on her own would imply that Martha knows she is guilty. Image experts everywhere are telling us how Martha should handle herself over the next few months. But right now, Martha is being consistent with her story and she should stick to this strategy while she appeals.

Martha Stewart will live to fight another day. Already, the 20-year maximum prison sentence she could receive is being estimated at 10 to 16 months. If her appeals do not work, experts assume she could even serve half of this sentence outside of prison. There are simply too many examples out there to tell us that scandal is not only temporary, but it could be the best thing that ever happened to someone. All prison couture jokes aside; Martha could stage a comeback to rival Richard Nixon. She could be a rags to riches story twice over.

What about MSLO? The stock has plunged more than 30 percent since the guilty verdict came in on Friday. MSLO stock will continue to plunge, so buy low and sell high. I've seen companies with bleaker futures come back from more dramatic stock plunges.

Brands can shift their positioning, evolve the promise that they make and live on. This is not even an apples to oranges comparison, but look at Radio Shack and K-Mart.

Both positioned themselves as the cheap alternative with off-name brands. Wal-Mart has moved so quickly, it blew K-Mart into bankruptcy before it could shift gears and bring in new brands to show that low prices do not mean low quality. Radio Shack however signed on big stars to sell their cell phones and are still around, competing with local and national competitors and doing just fine in comparison to K-Mart.

Will MSLO survive? Probably. Will they have to change everything? Probably not. Will it be a tough road? Definitely.

Martha Stewart's Guilty Aftermath

It is interesting to see stories proclaiming the beginning of the end for Martha Stewart now that she has been found guilty. As I noted in my last post, we've only just begun to write this story. Most obviously, Martha Stewart will not be sentenced for another three months on June 17th.

Three months. Three months to appeal and three months to read a blitz of stories analyzing Martha Stewart's case. Three months to prepare for whatever sentence Judge Miriam Cedarbaum hands down.

Martha Stewart Living Omnimedia (MSLO) however, does not have the luxury of three month's preparation. MSLO has moved into the eye of the storm it began weathering when Stewart was first charged.

MSLO has already introduced products that do not bear the Martha Stewart name. This trend will continue. I also think that MSLO will change its corporate identity standards to note it should be referenced solely as MSLO. This is a tactic that Kentucky Fried Chicken took when it realized fried foods were under fire as a fat-laden treat. They have been KFC ever since.

No matter how it responds, MSLO and its stock price will suffer. Martha Stewart's show is already being pulled. But this is this NOT all that controversial. Do you *honestly* think the television show will continue in its current format? Not to mention, the show is one product from MSLO's large portfolio. For the time being, its retail business is doing ok. While this will have a dramatic impact on MSLO, it is not the end for this company.

NEW POLL:How do you think public relations around the Martha Stewart case have been handled as a whole? Check out the new poll to the right and let you voice be heard.

Guilty on All Counts

Wow. Thursday I was in New York, within striking distance of the courthouse. And the verdict came in while I was flying home today.

Martha Stewart. Guilty.

It was good to see that Martha Stewart's public relations camp was ready for either scenario. Her response to the verdict was almost instantly posted to her Web site. This becomes an instant source for news stories, getting Martha's point across without Martha having to field any questions from the media. It will be interesting to see MSLO's response. They too were preparing for either scenario.

This is FAR from over. The guilty verdict kicks the media circus into gear while we wait for the sentencing. Then the appeals will get underway.

"We've only just begun..."

Closing Arguments & Quarterly Earnings

Timing is everything. As closing arguments wrap up on Thursday, MSLO will announce its quarterly earnings. By then the jury will most likely be in deliberation. It will be interesting to see how MSLO positions itself in the call for next quarter. It will certainly be impacted by the outcome of the trial.

Charges Drop, Stock Rises

Judge Cedarbaum threw out Martha Stewart’s most serious charge on Friday and the impact was easily measured. MSLO stock rose—proving how inseparable the two entities are despite their efforts to distance themselves.

Speaking of which, do you know who Sharon L. Patrick is? She’s MSLO’s new CEO. As charges are dropped, we see the media shifting to stories on business as usual, including how MSLO is moving ahead during the trial. We’ve been discussing this for awhile here. MSLO and Martha Stewart may not be as separate as they would like these days, but MSLO will go on and survive—regardless of the trial outcome.

That said, I think Martha will walk. The most serious charge against her has been dropped. This brings the rest of the charges into question. As closing arguments wrap this week, it gives the Stewart camp more momentum towards a not guilty verdict.