DaimlerChrysler: Buh Bye Martha

NEW YORK, Jan 6, 2003; Reuters reported that DaimlerChrysler's Chrysler unit is dropping its advertising deal with Martha Stewart Living Omnimedia when the agreement comes up for renewal in March, the automaker said on Monday.

Chrysler's decision comes as it prepares a major ad campaign featuring singer Celene Dion that will consume most of the unit's annual advertising budget.

Martha Stewart Living declined to comment.

Chrysler said the move was not caused by the stock scandal surrounding Stewart, who once said in an interview with Rosie O'Donnell that she herself drove a Chrysler.

Vanity Fair magazine has reported, however, that Stewart actually drove a Chevrolet Suburban but asked O'Donnell to change her answer for publication, as Martha Stewart Living was in the midst of negotiating the Chrysler advertising deal. The interview appeared in O'Donnell's now-defunct Rosie magazine.

Under the year-long deal with Martha Stewart Living, Chrysler was the sole automotive sponsor of the "Road Trips" section in Martha Stewart Living magazine, along with similar sponsorships for the company's television and syndicated radio programs.

In addition, Stewart, the chairwoman and chief executive of her namesake company, made promotional appearances at co-branded Chrysler/Martha Stewart Living events.

The deal was primarily a purchase of advertising space; Stewart was not a pitchwoman for Chrysler. But her personal image has been difficult to separate from that of her company -- especially before her involvement in the ImClone insider trading scandal came to light.

Stewart is facing dual investigations by the Securities and Exchange Commission and the U.S. Justice Department, which are probing her sale of ImClone shares a day before the drugmaker received a damaging ruling from federal regulators.

Martha Stewart Living said in a regulatory filing late last year that the scandal surrounding Stewart had hurt most aspects of its business, but its flagship magazine actually added advertising pages in 2002, and the company recently launched a new magazine, Everyday Food.