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Ad Dependency Leads To Trade Mag Sales

Financial Times, Monday, February 25, 2008 11:15 AM

While Reed Elsevier now delivers most of its legal and medical information via online databases with 90 percent customer renewal each year, one part of the Anglo-Dutch publishing company's business is still heavily reliant on print and increasingly less dependable ad revenue. It and rivals like Thomson and Informa may have been envied by consumer publishers for an ability to roll out profitable digital offerings, but Reed's move last week to put its trade magazines up for sale indicates it wants to get away from any dependence on ad sales.

Trade magazines were long seen as among the most effective advertising media, as they reached highly targeted audiences. But the shift of ads to online outlets is now combining with fears that advertisers will cut budgets in the current economic downturn.

Reed is selling its business information unit -- parent off books like Variety in the U.S, "because it's an ad-driven model," says Crispin Davis, chief executive. "It's more cyclical and lower growth."

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