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Martha 2.0: After Ad Turnaround, CEO Says 'Survival' Question Put to Rest



By Dylan Stableford
01/19/2006

After a year that began with her company's namesake in jail and its flagship magazine's print advertising in a dramatic freefall; and ended with an equally dramatic turnaround; Martha Stewart Living Omnimedia president and CEO Susan Lyne says that she can finally put to rest the question of the company's survival.

"I heard that everywhere I went," said Lyne of her first year at the helm. "I don't hear that anymore."

Lyne's comments came during a Magazine Publishers of America breakfast Thursday in New York.

"There's no way we could've come out of 2005 without a complete turnaround of advertising flight," Lyne said. Martha Stewart Living's
PIB revenue increased 45 percent to $104.62 million on 910.68 ad pages, roughly 250 more than it had in 2004.

And to withstand the wallop of shrinking ad pages, Lyne said the key was to not panic during the exodus. "The company did not cut editorial pages or print quality, so when the time came for advertisers to listen again" the magazine's quality was intact.

Lyne added: "We don't get edicts to cut millions of dollars out of the budget."

Of the advertisers that left during Stewart's prison time, Lyne said, they "weren't leaving because they didn't love the magazine; they didn't feel comfortable being in the magazine at that moment." The challenge, she said, was finding the right moment to go back to them.

Diversifying Risks

Despite a crowded newsstand, Lyne says the company is still looking to launch more magazines like Blueprint. "It's crowded because it's so robust," Lyne says of the Blueprint market that includes Time Inc.'s Real Simple powerhouse. Additionally, she says, MSLO is venturing into the scrapbooking and home-building category;"arenas where we can get a multiplier-effect across our businesses."

Lyne says that the company is trying to diversify some of its risks by leveraging its brand across multiple products, particularly after a year that its print future was in serious doubt. "It was deeply problematic," Lyne said when asked what would have happened had the fleeting advertisers left for good.
Which, in part, is why Lyne says the company's print offerings;representing about 55 percent of MSLO annual revenues;will continue to be a huge revenue driver, though the model may look somewhat different. "We're looking at [the company's platforms] less as independent businesses," Lyne said. "So print may not be 50 percent three years from now, but it may be creating 70 percent of our revenue."

Links:

www.marthastewart.com | www.magazine.org

By Dylan Stableford
01/19/2006







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