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Updated 14:15  Lausanne, Switzerland (GenevaLunch) – Edipresse, the largest media publisher in western Switzerland, will sharply cut back the work it gives Publicitas, one of the largest agencies that sells advertising space in the country, at the end of 2009 when their current contract ends.

Edipresse, whose inhouse advertising sales group, Edipub, currently sells its magazine ad space, will give Edipub the newspaper ad space business starting in January 2010. This represents a potential loss of CHF150-200 million a year for Publicitas, according to the Tribune de Geneve, one of the newspapers owned by Edipresse. The Tribune notes that EdiPub will grow from its current 15-20 employees to some 100.

Le Temps, carries an interview with the Lake Geneva region manager for Publicitas, Patrick Cuenoud, who notes that while many of the ad agency’s employees are likely to move over to Edipresse, he believes Publicitas will have to lay off 20-25 people. The two companies will continue to work together, but Publicitas will no longer have exclusive handling of Edipresse’s newspaper and online ad space sales.

Edipresse acknowledges that the move is part of its cost-cutting exercises: newspaper ad sales continue to fall, down 2.5% for the first half of 2008 compared to the same period in 2007, the latest period for which a financial report has been published. The company at that point predicted that advertising sales in Switzerland would continue to fall, and figures published 23 February for January 2009 confirm this: down 8.7% for the industry. Newspapers have been hardest hit. Edipresse announced last week that it is laying off 25 people.

Publicitas, for its part, told Le Temps that its revenues in the Swiss market have fallen 25-30% in the first two months of 2009, a barometer of the state of the media industry.

But Edipresse Suisse Director Théo Bouchat says reducing costs is not the only reason for the change: “There are also strategic reasons. Clients want to have more direct contact with the media.” He says that it is even possible Publicitas will continue to bring in as much as half of Edipresse’s ad sales revenues, but without the exclusive contract.

Edipresse publishes most of the Lake Geneva region’s main newspapers, Tribune de Geneve, 24 Heures and Le Matin. It shares ownership of Le Temps, with the country’s largest media publisher, Ringier.

Joint press release, from Publicitas