A few weeks ago, the question was, which Martha Stewart would
show up to trial? The 21st century June Cleaver? The hard-working
role model for pluckily independent but never unpleasantly radical
wives and moms? Or the angry cabbage chopper on CBS' "Early Show,"
dissing old friend Sam Waksal from ImClone as a relationship no
closer than the "family pet."
When Martha Stewart did show up to trial, it became all about
the purse. As if she were simply trying to deplete whatever pools
of sympathy she might have collected in recent weeks, the doyenne
of domesticity strolls into court caressing a handmade Birkin bag
from Hermes, the Paris-based luxury boutique, which sells for
$6,050.
Stewart also brought a Hermes carryall made of "amazonia"
rubber. It's very hoity-toity. True, those Kmart shoppers sitting
on the jury might not have spotted the opulence at first blush or
have quite realized what they were looking at. On the other hand,
the New York Daily News and New York Post were only too eager to
disclose whatever details about Martha's accoutrements the jurors
might have missed.
As such, it was a media relations blunder all too typical of Ms.
Stewart's handling of the case so far. Unfortunately, the Martha
Stewart case has become a case study for media professionals on
what not to do.
Martha's case in the media should have been all about the SEC
radically expanding its role and lowering the standard of proof to
mere accusation. About the SEC trying to prove it's not as
incompetent as its embarrassing record on Enron and WorldCom might
suggest. Instead, Martha's case is at least a (powerful) bit about
class animosity.
The Price So Far
Stewart's lawyer Robert Morvillo is justly challenging the SEC
and impressing the jury in the process. But - not just this latest
brush with haut couture - the whole persistently late-to-the-game
media strategy of Stewart's team has paid negative premiums
throughout.
Her company's stock price, for instance, has fallen nearly 40%
since her troubles began 20 months ago and, even with recent small
gains, still trails the market by nearly 10% for most of the past
two years. Then there is the double-digit drop in advertising
revenue for her flagship publication, Martha Stewart Living.
Add significant third quarter losses and a front-page story that
will not go away. Absent jail time, it is hard to imagine any early
settlement agreeable to the SEC that wouldn't have been worth it.
The media would have quickly moved back to Enron and WorldCom for
their stories about villainous business practices. Fighting back
may have been the right thing for Martha Stewart, but it was the
wrong thing for Martha Stewart Living Omnimedia Inc. Great
executives know when to cut their losses.
Target Martha
Martha Stewart is the government's perfect target. The SEC
recoups its Enron losses by looking tough on business crime. And lo
and behold, they've got a celebrity on the hook who, like many
celebrities, knows nothing about strategic media relations. That's
a job for which their personal publicists are usually woefully
unprepared.
After a late start Martha Stewart now has a great media team.
Unfortunately, she has too much of a team, with four PR firms
assigned to the case. The result? Reporters, even sympathetic ones,
cannot get a response (a.k.a., clearance) from all four firms in
time to meet deadlines. When it comes to responding to the media in
a high-profile trial, late is not much better than never.
The "Martha Talks" Web site got a lot of attention with its soft
colors, homey photos, and promised updates. The site is a good
tactic for future executives charged with wrongdoing and obliged to
communicate directly with their important audiences. But thinking
that a Web site comprises an effective communications strategy is
like stuffing but no turkey for Thanksgiving. The site has to be
part of an integrated, multifaceted public relations strategy.
Having fans gush online is OK, but it doesn't add to the
credibility scale.
She could have done more. How about orchestrating grassroots
support, enlisting local PTAs along with NOW or even political
groups, left and right, beseeching Big Brother to stop persecuting
the poor woman? Orchestrate it - but be the quietest silent partner
and don't betray the least trace of your own complicity in the
swell of public protest.
Martha needed to shift the focus of discussion away from
herself. Generalize the issue. For every citizen who likes her -
and liking or not liking is how we ultimately make our decisions in
an over-communicated world - there is one who doesn't.
The SEC's overreaching case against Martha Stewart ought to
strike fear among all managers of public companies in the United
States. You don't have to be a media personality conveniently inept
(convenient for the SEC) on the PR front. The government's message
is that you, whoever you are, are individually at risk for
proclaiming innocence. For exercising First Amendment rights.
Martha's best defense was an offense. Let a few bureaucrats rock
on their heels as she crafted a "you're next" message, playing on
the kind of ingrained distrust of big government among the public.
"You're next" is, in fact, the only message that the tobacco
industry ever seeded in the media that really impressed anyone.
Contact: By Richard S. Levick, Esq, president of Levick
Strategic Communications. He can be reached at [email protected] . Levick has
handled the media for more than 150 law firms worldwide and
high-profile crisis matters, including the Catholic Church and
Rosie O'Donnell litigation stemming from the demise of Rosie.