Russ Mould, investment director at AJ Bell, said: “Shifts in the media landscape have led Ladbible-owner LBG to issue a profit warning. It has revenue-sharing agreements with social media platforms that display adverts near its content and owned websites.
“Unfortunately for LBG, this part of its business is declining at a worse than expected rate as third parties shift away from websites and focus more on social platforms and video content.
“Changes to Facebook’s algorithm are also causing problems for LBG as it means the publisher is scrambling to make tweaks to its system so that its content is still getting millions of eyeballs. This goes to show that content creation is not always an easy ticket to riches.
“LBG is down but not out. Its core business of creating content for brands and media agencies to reach young adults is doing well. The challenge now is to convince the market that the problem areas of its business can be managed, and that the core growth engine is still purring away.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.