Advertising at Martha Stewart Living Omnimedia Inc.'s flagship magazine continues to see a strong recovery, Martha Stewart Living Chief Executive Susan Lyne said.
The number of ad pages at Martha Stewart Living is expected to show a gain of 40 percent in the second quarter, with revenue posting an even stronger increase, Lyne told investors at a Deutsche Bank media and telecom conference that was broadcast on the Web.
The latest projection comes on the heels of a forecast in May for a 35 percent increase, which was up from a previous projection of a 30 percent gain.
Lyne said that she is "very optimistic" about ad demand in 2006 at the magazine, which posted a steep drop in advertising due to Martha Stewart's personal legal travails.
Next year the publisher will benefit from a full planning cycle by advertisers and media buyers for the first time since 2002, when Stewart became tainted by a stock-trading scandal, CEO Lyne said.
The company is considering boosting Martha Stewart Living's rate base, or the circulation it guarantees advertisers, and its price, amid strong direct-mail response for the magazine, she said. The magazine cut its rate base to 1.8 million from 2.3 million because of the scandal surrounding Stewart.
Lyne said Martha Stewart Living has about $147 million in cash, which the company can use for investment and acquisitions.
Any acquisitions would most likely be in publishing, in particular titles that are under valued, she said.
Separately, Lyne said that DVD sales of Martha Stewart TV programs under a partnership with Warner Home Video announced earlier this year "could end up being a very significant driver for us going forward."
