• by Ross Fadner , October 19, 2005

Martha Stewart defended her decision to appear in the NBC reality show "The Apprentice: Martha Stewart" before a group of magazine and advertising industry professionals at the American Magazine Conference in Puerto Rico Tuesday.

According to Stewart, "We really accepted the offer of [NBC producer] Mark Burnett as a way to expose the beautiful nature of our company." She said the show has been "a most wonderful advertisement," for her company, Martha Stewart Living Omnimedia.

However, ratings for the new NBC reality show have been disappointing thus far. The show was recently moved to a new time slot opposite ABC smash "Lost," which some critics have said means that NBC has effectively given up on the show.

As CNBC news anchor Larry Kudlow points out on his blog, "the show, which was already losing to reruns of ABC's hit show "Lost," now has to go up against new "Lost" episodes after switching time slots."

At the conference, Susan Lyne, president and CEO of Martha Stewart Omnimedia, admitted: "It's clear the show launched to lower numbers than NBC expected"--but she said the expectations were too high: "there was a moment this summer when every media buyer said 'this will be THE hot show of the fall."

"We never went into this with the idea that we're getting into the prime-time television business," added Lyne. "This was a one-time deal to expose the brand to a broader audience."

Lyne said that ratings have improved every week since "Martha Stewart: The Apprentice" lined up alongside "Lost." Even so, according to Nielsen Media Research, "Martha Stewart: The Apprentice" finished fourth among viewers in its Wednesday prime-time slot last week, with 6.94 million viewers; "Lost" placed first, with 21.6 million.

While Martha Stewart may not be delivering the prime-time ratings advertisers and NBC expected, ad dollars are returning to her company's core product--Martha Stewart Living the magazine--in droves. Advertising revenue has shot up at an average rate of 45 percent over the last five months, according to recent Publisher's Bureau of Information figures, earning more than $10 million more than at the same time last year.

President Susan Lyne added that Web traffic and online subscriptions are up 100 percent so far this year.