• by David Goetzl  @dgoetzl, September 23, 2009

Martha Stewart, founder of the media company that carries her name, said Wednesday she used to be "very angry" about blurring the line between editorial and sales operations. But business realities and perhaps more consumer acceptance have softened her stance -- to the point that "it doesn't bother me anymore." 

Speaking at MediaPost's Future of Media Forum, Stewart said that "increasingly, we find there's a major breakdown in that church and state structure that was established years ago."

She indicated that more ads in magazines (and perhaps the Web) seem to appear near related articles. Example: an ad for a medication next to a wellness piece. Also, advertisers are lobbying harder for opportunities tied closer to content.

"I think there's a relaxation in our attitude towards it," Stewart said.

Her company, Martha Stewart Living Omnimedia, publishes Martha Stewart Living and Everyday Food, among other magazines. Its publishing sector accounts for the bulk of company revenues, which fell 28% in the second quarter. That reality could lead to further changes in a content/capital balance.

"We also want to make money and get advertisers to welcome our good content," Stewart said.

At the event -- part of Advertising Week -- Stewart spoke on a panel that also included Rob Norman, CEO of GroupM Interaction. Perhaps referring more to the TV arena -- in line with Stewart's comments -- Norman referenced advertisers' desire to further link with content, saying his agency is increasingly trying to create assets that advertisers can own.

Stewart did suggest that consumers may be playing some role in a shift in the so-called "church-state" dichotomy. Placing an ad next to a relevant article could "possibly" benefit them, making it easier to obtain information about a product.

She also said some level of "monitoring is going away," suggesting that trade organizations may have altered their roles vis-a-vis church-state divides.

Stewart was also joined on the panel by NPR CEO Vivian Schiller and MTV Networks CEO Judy McGrath. Schiller said relaxation of church-state standards is "not happening in legitimate newsrooms because people there have too much integrity." Still, she said, critics of a blurring of the lines may be "substantially underestimating the intelligence of the [consumer] to smell a rat."

With "The Daily Show" and "The Colbert Report" a boon to Comedy Central, part of MTV Networks, McGrath said: "Fake news has been very, very good to me. I think the consumer is more discerning than we give them credit for."