Pressing The Press Is Best
Under Chairman Jack Welch, GE has shunned owning businesses that aren’t No. 1 or 2 in their markets. That’s a tack Reed wants to follow.
“If we can’t be a leader in a field, then it probably won’t be a strategic priority,” says Brian Kardon, senior VP-marketing and chief marketing officer at Reed Elsevier Business Information.
Being a leader got a lot easier for the company last month, when Reed Elsevier PLC’s Cahners Publishing Co. completed its $447 million purchase of the Chilton Business Group, Radnor, Pa. After the merger, both companies were combined to form Reed Elsevier Business Information.
“The Chilton publications helped us get stronger where we already had strength,” Mr. Kardon says.
Reed Elsevier Business Information currently has 131 publications, 4,000 employees and more than 7 million subscribers, making it by far the largest trade press publisher in North America.
Playing to its strengths
Reed’s strengths lie in manufacturing (where it has 29 magazines), entertainment (15), food (15), electronics (14), building and construction (11) and retail (8).
Mr. Kardon says Reed’s size will also help it pioneer conferences, database marketing and corporate advertising buys across industry segments for large clients such as 3M Co., IBM Corp. and GE.
“With this scale, we feel we can rewrite the rules and do things never done before,” Mr. Kardon says.
Reed may start by rewriting the rules concerning advertising rates.
Mr. Kardon says it’s too soon after the purchase to say whether prices for some of its titles will go up, but he says his company believes higher rates are justified.
“We want to be premium priced,” Mr. Kardon says. “We are the leader and we want to be priced like a leader.”
Advertising executives, however, didn’t express much concern about higher rates at Reed titles.
“I don’t think they’ll make moves that will alienate customers,” says Chris Moseley, VP-advertising and promotion at cable programmer Discovery Networks U.S., Bethesda, Md., a customer of some of Reed’s entertainment tides. “It hasn’t been my experience that they do business that way.”
To concentrate on its strongest categories, Reed plans to thin out the weak.
Mr. Kardon says his company plans to eliminate tides in segments where the company does not have dominance, but he wouldn’t specify which titles those may be.
He says Reed will announce that information to upper management and employees early this month, along with other organizational logistics concerning the integration of Cahners and Chilton.
Included in that will be a list of which staff positions Reed plans to eliminate. Mr. Kardon says he doesn’t anticipate extensive layoffs.
To build new revenue to pay for its purchase of Chilton, Reed plans to offer a package of advertising opportunities in each vertical category.
Such a package will include network advertising buys within each industry, and a host of ancillary advertising mediums.
First among those is electronic media. Mr. Kardon said his company plans to develop electronic information sources, primarily Web sites, that draw from the breadth and depth of information generated by its magazines.
“The merger gives us great scale now,” Mr. Kardon says. “We can more efficiently invest in electronic media than smaller publishers.”
Mr. Kardon said the company also is considering such information offerings as pushed e-mail, newsletters, faxes and other customized news delivery methods.
As part of Reed’s new leadership in trade magazines, Mr. Kardon says his company will emphasize its broader role as an information provider rather than as just a magazine publisher.
“We want to be the information hub for our readers’ workplace,” he says. Mr. Kardon hopes to create an image of his company something akin to the one its sister company, Lexis/Nexis, a legal and business database information provider, now has.
To promote this image, Reed Elsevier Business Information is launching a branding campaign in the fourth quarter that will run indefinitely.
The company has hired Lapham/Miller, Andover, Mass., to develop an identity and an integrated marketing strategy.
The campaign will run advertising in Reed magazines, and will also likely target publications in the advertising, general business, financial and publishing communities. Reed will also use direct mail and event sponsorships to heighten awareness of the new name.
Advertisers are mostly enthusiastic about the new entity. They said Reed Elsevier Business Information is likely to bring new opportunities to business-to-business marketing.
Richard A. Segal Jr., managing director of marketing company Hensley Segal Rentschler, Cincinnati, said Cahners and Chilton were great brands and together they could bring more firepower to the industry. “It’s possible they can build a great and mighty enterprise in the business marketing space,” Mr. Segal says.
But like any publisher these days, in order to succeed Reed will need to offer advertisers new value-added ways of reaching customers, Mr. Segal says.