- The Washington Times - Thursday, May 19, 2005

Wall Street giant Morgan Stanley, which has baeen experiencing a spate of problems in recent months, wants publications to pull its ads if any negative stories about it are expected to run.

A new advertising clause stipulates that if “objectionable” stories are planned, Morgan Stanley’s advertising agency, Starcom Worldwide, should be notified so any last-minute changes can be made, according to trade publication Advertising Age. If the agency can’t be reached, all Morgan Stanley ads should be canceled for at least 48 hours.

The clause does not mean the investment bank will pull its ad dollars from that publication. It means the ad should not appear when the story does, but can run in another edition, according to sources who spoke on the condition of anonymity.

Andrea Slattery, a Morgan Stanley spokeswoman, said the clause has no impact on the editorial decisions made by a publication.

“We obviously have no say over that,” she said.

A spokeswoman for Starcom Worldwide in Chicago said the clause is a standard practice in the advertising industry.

It’s no doubt that advertisers have become more concerned about the news written about them, particularly in a post-Enron era filled with corporate scandal.

“When Starcom establishes a media relationship, we advise the outlet that it may be necessary to ask that advertising be moved based on editorial content,” she said. “This clause is aimed to allow a client to better make its independent business decisions regarding the placement of its advertising in the media.”

Starcom’s parent company is Publicis Groupe, one of the largest advertising and media services conglomerates.

Kelly McBride, ethics group leader at the Poynter Institute, a journalism school in St. Petersburg, Fla., said it’s not a good idea for any publication to grant Morgan Stanley’s request.

“It compromises the newsroom’s independence,” she said. “It puts it upon the newsroom to inform someone outside the newsroom when they are going to do a story about Morgan Stanley. That’s an unusual circumstance.”

The publications that have received notice of the clause include the Wall Street Journal, USA Today, the New York Times, Business Week and Fortune, according to Advertising Age.

Dow Jones, which owns the Wall Street Journal, would not comment.

A USA Today spokesman confirmed the newspaper received the directive but would not comment further.

Rem Rieder, editor of American Journalism Review, said it would be difficult to enforce the clause because the advertising staff usually does not know what will appear in a publication before it runs, particularly in a daily newspaper.

Peter Kreisky, chairman of Kreisky Media Consultancy, told Reuters that companies would be mistaken to base their advertising on positive or negative articles in a publication.

“Some of the stuff you are going to love and some you are going to hate, but what you really want to do is reach discerning readers,” he said. “I think it’s very nearsighted on their part and shows a lack of understanding of how advertising really works.”

Morgan Stanley has had its share of negative publicity recently.

After Chief Executive Officer Philip Purcell reorganized the company, several high-ranking executives left. A group of former Morgan Stanley executives and dissident shareholders attempted unsuccessfully to unseat Mr. Purcell earlier this year.

This week, a jury awarded billionaire financier Ron Perelman more than $1.4 billion in damages to be paid by Morgan Stanley after finding evidence the investment firm acted fraudulently in Mr. Perelman’s 1998 sale of a company to Sunbeam Corp.

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