Reed To Leave Publishing Because Of Ad Market Risk
Reed Elsevier are to sell up to 150 trade magazines and possibly fire 1,000 staff to get out of the trade magazine market. Reuters says the reason they plan to sell its Reed Business Information arm is to “reduce its exposure to cyclical advertising markets”. Advertising accounts for about 60pc of RE’s revenues. Reed meanwhile have invested $4.1bn on US risk management system ChoicePoint that provides data and analysis to the insurance sector.
Is this a defining moment in the advertising industry’s history? The story could suggest two things: an Adsense-fueled digital era has made old fashioned print ads irrelevant and therefore broken the business model for many magazines – and meanwhile those magazines have failed to realize the potential of migrating their business properly to the web.