Mitch Bettis on the Various Brands of Arkansas Business Publishing Group

Jacob Cohen Donnelly: It wasn’t until our mutual friend James Capo texted me on, I think it has to be five different occasions that I needed to interview you that I finally got this scheduled. Thanks for being here. Why don’t we start with the basics? What is Arkansas Business Publishing?

Mitch Bettis: We are a privately held media and marketing company that actually started in 1974. It has a great starting story that predates my tenure here, but we’re a niche media company. We have about 30 print titles between Arkansas and Texas. We have a digital marketing company. We have an events division. We have a variety of agency and custom projects, but all of them are highly focused on serving a highly targeted audience and bringing a level of content and experience that they cannot get anywhere else in a way that I hope somehow changes their life every time they encounter us.

Jacob: You alluded to it, but you’ve been the owner and president for, I guess, actually 11 years this month, if your LinkedIn dates are current.

Mitch: That is mostly true. I joined the company about 11 years ago as president and then bought the company in 2019. Then we’ve been in growth mode during that decade. We’ve actually probably doubled in size in that decade. Then we also bought the company in Texas in 2020.

Jacob: Talk to me about how the acquisition played out, where you were the president and then became the owner. How did that happen? What made that possible?

Mitch: I love this story, so I’m thrilled you asked this. Briefly, this company was founded in 1974 by some raging idealists. They were no trust fund baby, no rich uncle, no bank would give them any money. They literally drove cabs at night to have a couple of nickels so they could build a company that was different during the day and different at that point would have been anything that wasn’t mass, right? Newspapers were mass, TV was mass, radio mass, every eyeball possible. Even then, they saw an opportunity to not be sort of good at a hundred things, but be really exceptional at a narrow thing. That was very odd at the time. Again, they had no money.

Over the time, they took on a few partners and investors, a little bit here, a little bit there. They gave away a little equity just to get people to work there because they had no money. They literally paid people with a share of stock. By the time I joined the company about a decade ago, there were 26 stockholders, a few main, but a collection of 1 to 15% that had joined for a host of reasons.

Actually, in the closing– it’s one of my favorite stories, when we closed, I met the lady who decades before had been paid in stock to write the horoscope for the magazine in the late ’70s and early ’80s. She had a couple of shares of stock for like, “We can’t pay you, but you’ll be rich one day. Here’s some stock.” She actually cleaned up pretty well, frankly, for the work she had done.

Many business magazines started in the early 80s and about a third of our business is what we would call a B2B market and about two thirds of our products cater to B2C. The B2B really took hold in the early 80s. A lot of business magazines started then and our company saw that opportunity to do that. They built over time. Then as companies go, frankly, a lot of times the entrepreneur, A, either gets exhausted, just runs out of gas. It is incredibly hard work to do what they have done and all of us do.

Then what was really interesting on this journey was the primary owner, the lady who hired me, really recognized the unique juncture where the company was and frankly realized she wasn’t the right leader anymore and realized the company needed to evolve. It needed to expand, it needed to take on new energy. That’s when she brought me in as president. She saw culturally how I took care of our key stakeholders, how we treated people, how we treated community, how we believed in audience and understood my value proposition. By the time, 10 years later, she had reached exhaustion mode and she and the stockholders started talking about selling.

I was the president, so my job at that point was really to find the best deal, the best financial deal for them, but also who’s the right partner. I started shopping it on their behalf, but it really got down to it, they did not want that to happen. To be fair, they didn’t give me a discount on the price, but the way we structured the deal, they really wanted this to stay locally owned and really a real passion for taking care of people well and taking care of community well.

Literally, I lined up with– I was on a board with– I said, “We have to start talking to some banks because this is a large transaction and I have something to bring to the table, but not near that much.” We work with a lot of banks in the business journal world. I started talking to a variety of banks and some had this option and some had this option. I’m on the board with a guy, Marcus Gwynne, I’ll give him a shout out here with RBS Bank, who I said, “Marcus, I’ve got these options. Can you beat this option?” He said, “Man, I’ll tell you what, we’ll give you everything you want at this rate and it’ll be done in a week.” It wasn’t done in a week, but he said, “We can make this happen.”

I cleaned out all 26 stockholders and became the single owner in 2019. I consider it a grand blessing and I’m grateful that ownership really valued what we could bring to the table and really wanted it to stay locally owned. I think that’s been a real strength and part of the jet fuel for us as we’ve been continuing to grow and expand.

Jacob: Last year you spoke, I think it was last year, you spoke at Omeda’s Idea Exchange and you and a colleague of yours were on stage talking about data and not just like– when I talk about data, typically we get trapped in talking about audience data, but you were talking a lot about business data. You have a philosophy regarding sharing that sort of really granular level business data with the entire company. Can you talk about that philosophy and why it’s so important to you to share that data?

Mitch: I do believe deeply in that. I’ll give you two quick contrasting points. When I have worked for publicly traded media companies and trying to be transparent with the staff about where our problems are and where we need to punch levers to move the needle, many people aren’t comfortable– many owners aren’t comfortable with us sharing that kind of data. I believe it’s critical. I believe most people on our team want to see us grow, want to see us do well, want to be working in concert and collaboration to accomplish a bigger goal, want to feel called to a bigger goal.

One way to do that is really just to find a level of transparency that we have this problem here, we need to move this metric here, this is a critical benchmark, and that we all know what we’re marching toward. Being transparent in those data points has really been a critical piece. Now, when I got to this company, there was a level of transparency, but we substantially amped that. We did two big things.

One, we dramatically sort of amped our transparency across a whole host of metrics, and I can give you some examples of those that are very uncomfortable to an owner to talk about. The other is we changed the philosophy of who makes decisions. In the entrepreneurial ecosystem, the entrepreneur is so dominant, so focused, is the driver, the builder, and tends to make every decision for a long period of time. In our case, that was everything from who was on the cover of one of the magazines to when we ordered toilet paper to what pencils to what our invoices would look like, just control.

I know from an organizational growth standpoint, we can’t be great if only Mitch makes decisions. A, I’m not that smart, but two, it dramatically limits our creativity and our effectiveness and the engagement of a staff. We began to decentralize and push back decisions onto our key leaders so they could grow, and the only way they can grow is for us to be transparent in what we need them to do. That extends to everything from, obviously, revenue and profitability for their specific teams, but there are certain benchmarks that we find valuable.

We also talk about, and this is where it gets uncomfortable, how much cash we have in the bank and what are our cash-on-hand goals. That’s a really difficult thing for a non-owner and a non-top exec to talk about because when you talk about wanting four, six, eight months of cash on hand, that’s millions of dollars. Then your teammates are thinking, “Wait a minute, I can only get a 3% raise and you’re sitting on millions of dollars?” We go through an intense sort of education experience of why we need certain cash on hand. “This is the fuel to grow. This is the buffer when things go poorly. We don’t have to go lay off 100 people.”

All of that takes transparency and all of that takes time and investment and really raising a leadership team, but also raising the staff to what our expectations are. One consistent way that’s been really successful for me through years is to have that numeric transparency because we can all agree that this number is the goal and we can hit it or not. It really adds a level of clarity. A friend of mine once said, and I’ll pause here, “Clarity is kindness,” and the idea that we can add intensive clarity to our expectations, to our goals, really is sometimes hard for a staff to swallow, but it’s ultimately the greatest act of kindness that we can be clear on what our expectations are.

Jacob: There were three data points, when I watched this session, that I really was interested in and you’re just very public about what your goals are for those. The first was contribution margin, second was net margin for the business, and then third was payroll as a percent of revenue. Can you talk about those numbers?

Mitch: Again, these are very uncomfortable things a lot of times for business owners to talk about. My experience on the whole is that the staff, especially the key leaders, rally to the goal. Now why those three are important to us to really rally around? Starting with contribution margin, the way we’re set up, we’re set up with a collection of publishers and leaders. I’ve got six key leaders and they drive six different teams and they’ve got a collection of products in those teams. We want each product, whether it’s a print product, an event product, a digital product, a custom product, an agency product, whatever we’re producing, to have a specific contribution margin to the greater good, the full organization. For us, that’s 30% to 60%.

The cost to produce the product for us is– If it’s a printed product, it’d be labor and printing and mailing and design costs and editorial costs and all the payroll taxes, anything associated with the moments it takes to create that product. That contribution margin of 30% to 60% then contributes to the whole. The whole is leading us to the net, but the whole is our admin, if you want to think about that. It’s the rent, it’s the heating and cooling, it’s toilet paper, it’s coffee, it’s some of the admin team, it’s Mitch, it’s the accounting team and those that might work in an admin services. Really net is cost of the business. That includes debt service, that includes anything it takes to run the company.

We, for our organization, feel really comfortable at a 15% to 17% net margin. I’ve worked for companies that wanted the net at 20 to 30, and that’s not comfortable to Mitch. We could run that, but I think there are some real unfortunate trade-offs that happen there, meaning we don’t get to pay our people well enough, we don’t get to invest in benefits, we don’t really get to invest in our community, we can’t do all the good things that we do if we’re just taking super high margins and settling that to the stockholders. We have found 15% to 17% as an overall company margin is really those aspirational goals.

We talk about the difference. Your team’s responsibility is 30 to 60, and there’s some reasons there’s a variable there. Then our collective responsibility is to manage to 15 to 17. One of the key ways we do that is managing payroll as a percent of revenue. All that we pay our people, obviously that’s their salary, but anybody on a variable, so commissions and bonuses, but that’s healthcare cost, that’s payroll tax, anything that’s sort of intensely people-oriented, we ideally want to see running in that 45-ish percent of total revenue.

If we’re too high, if that number is 55% of revenue, and it is in January, it always ends in January, to be honest, because we don’t have a lot of products publishing in January. My payroll costs are X, I have less revenue, so the percentage is off. As we look at the whole though, we know that it’s a productivity measure. We know that there’s time to do things in January. We know when payroll falls as a percent of budget at maybe high 30s in July, August, September, October, we are maxed, right? A lot of product is falling in.

We look at this on the whole as a way to an efficiency measure. It also is a way to protect our staff. If we run all year long at 38% of payroll as a percent of revenue, I feel like I’m running people way too thin. I’m pushing them to the edge, and I’m doing the wrong thing as a manager. It’s another one of those clarity marks that we need to for the business health, be at a specific number, but also to take care of our people. We don’t want to run too thin because I won’t get the best work. I’m going to run them off. I don’t have a good healthy balance on that.

Jacob: Let’s jump deep into the business now. You’ve got, like you said, a number of different products. I think you said the breakdown is two-thirds consumer, one-third B2B, or maybe I saw that on the presentation, and therefore I’m now saying that out loud now. What are the types of products that we’re looking at? What are the individual brands? You talk about January as a very light publishing month, but then July, August, September could be a very intense publishing month. What are you taking to market?

Mitch: We have a collection of brands that are published on a regular basis, and we also have a collection of brands that are published on a more intermittent basis, either monthly or every other month or two or three times a year. Here are a few examples just to illustrate some of that. We have the states of Arkansas’s Business Magazine, Arkansas Business. It’s a weekly magazine about– it’s a news investigative very journalistically forward magazine about business trends in the state of Arkansas, and there’s a whole team that’s there just to produce that doesn’t work on any other product. Even our product teams are highly niched into this journey.

We have a monthly magazine that most of the audience might refer to as City Regional Magazine, community affairs, non-profit, great restaurants. That also falls in Arkansas as a monthly. In Texas, we have a monthly luxury lifestyle magazine. It has a super affluent, curated audience about luxury lifestyle living in the Fort Worth region. Also, all of those have high-frequency teams, uniquely distinct content, and a whole team that really supports all of that.

When we get into some of these what we would call special publications, if we’re just talking about the print side of our world, is we have unique niches. For instance, let me give you some weird examples. We have Arkansas– For those of you who are listening, may not know a couple things about Arkansas. One, we’re the duck hunting capital of America, and number two, we’re the rice production capital of America. No doubt both of those go hand in hand.

We produce more medium grain rice in Arkansas than any other state. I think we’re 40% more than the next state, which I think is California. Rice is a big part of our economic ecosystem, and we export rice all over the country. When they harvest that rice, little grains of rice are left on the ground, and ducks migrate south, and they look at all that lunch and dinner, fly over, stop, and we harvest. We have a magazine for duck hunters, but not just any duck hunters. We have a magazine for executive duck hunters who can pay $5,000 to $15,000 a weekend on these unique and customized hunts. Executive duck hunting, a magazine called Greenhead, is a nationally award-winning magazine. It’s a really good brand for us.

We also have the state’s Bridal magazine, a very different niche. 20 to 30-something females, predominantly female, 99.5% female, and a very different team creates the content for that magazine. We have four magazines that go to every 8th, 11th, and 12th grader in the state of Arkansas, and we have the same magazine going to every 7th, 9th, and 11th, I think, in Dallas-Fort Worth, about go to college. Here’s what college looks like.

We have another magazine that is about go to work. If college isn’t for you, maybe the trades, driving a truck, being a plumber, you can make an incredible amount of money in those, and painting a picture of that. We have niches that are designed toward teenagers. We have niches designed for 20-somethings. We have niches designed for executives. We have niches designed for visitor communities throughout the state. There’s a real diverse path amongst those print pubs that are part of the markets we serve in Texas and Arkansas.

Jacob: I guess, is that the limiting factor for you, is that you want to operate within Arkansas and Texas, like you’re not looking to expand to Seattle, for example?

Mitch: It’s an excellent question. A, we are perpetually looking at acquisitions, so we are certainly looking beyond the borders. An interesting example on the magazine that goes to 8th, 11th, and 12th graders, and especially the magazine about go to work, every state has an issue with bringing a mobilized workforce into what we used to say were the trades, whether that’s working in manufacturing, working in transportation, working in electrical or plumbing. We have been, for the last several years, engaged with multiple states about producing that magazine across the country.

We are strategically looking at some of these can export, if you will, to other states. We aren’t actively looking at setting up a bridal magazine in every state in the country or developing a national footprint there. We are intensely local. Even these products for the go to work magazine, called PROS, would be about Alabama, and would be about Oklahoma, and would be about DFW.

Frankly, the DFW magazine, we have talked about now moving that to South Texas and doing one that’s very Houston specific, because the economies are different. Then there’s a West Texas economy. We don’t see this as a way just to create a template and export a single template. Everything we do philosophically wants to be uniquely local. We have an efficiency because we know how to produce those, but the content is really meeting a unique local need.

Jacob: You pulled up a screenshot of your revenue dashboard at the OX event. You were talking real transparency. It was blurry, but I zoomed in. I will give you the option whether or not you want to share. Are you willing to share how much revenue and profit the business generates today, or let’s say ending 2023?

Mitch: Yes, we’re budgeted to be $16 million this year. That’s more than doubled since I got here 10 years ago. I gave you our ideal profit margins earlier. We want to be running a net margin of 15% to 17%. What’s interesting to us is– and I understand the world we live in, I understand a lot of our print-oriented properties in the universe have struggled, namely newspapers have struggled. I’m an old newspaper guy. I’ve spent 30 years in the newspaper business and love newspapers, but I understand they’ve struggled. I understand TV has struggled with audience, and that is really traditional terrestrial TV. I understand radio, traditional radio has struggled with audience, as so many other options have come out.

Our print revenue is higher today, even though– and let me back up a second before I get into the sales pitch of revenue. When I got here, 5% of our total revenue was digital. About 72% to 75% of our revenue was print, and the difference is what we would call other. Other would be things like subscriptions, events, and some custom things. That’s what we would call as other in this journey along the way.

Now, our revenue is about 60% print, about 28% digital, and about whatever that’s left, 12% to 15% other. Even though our percent of print has gone down, the revenue is actually substantially higher. We are in a print growth mode. We launched three new print magazines last year. Print is still an incredibly impactful, meaningful part of our narrative. What has grown so dynamically is our digital marketing infrastructure, and there are millions of dollars over there today that weren’t there five years ago or seven years ago as we’ve built out a pretty intensive digital agency. All that accumulates to, we should be at $16 million this year in terms of revenue.

Jacob: Print is growing, which as I’ve done these interviews, I found there are more and more operators who are also seeing that, whether that’s Craig over at Firecrown or Neil Vogel with Dotdash Meredith. His print business is doing okay. I didn’t think I’d have a print audience. As you think about print, that 60%, is that just ad revenue because you mentioned subscriptions as part of other, or that 60%, is that ads and subscriptions of the print product?

Mitch: Excellent question. We separate it as two separate initiatives and products. Most of our products, frankly, I only have one paid subscription product. Of the 30 or so brands we have, 29 of them are highly curated, direct mailed, and or free distribution products. It’s our business audience that is the paid model on that. We separate that, and it has its own unique audience initiatives. We’re in the middle of a pretty intensive planning. You mentioned Omeda earlier. Because of our new alignment with Omeda, we have some other ways to mobilize and understand first party data, and that’s one of the reasons we moved to them to be able to do that.

Through that journey, we have a whole expanded approach to driving additional revenue options through our paid models that is really important to the future of the company. If we’re really providing content that is unique and indispensable, it has value. We’re really finding what our legs are there. That 60% represents a print advertising number. Again, I think this really tells the tale of value. Our business team hit an all-time record last year. It beat the all-time record from the year before.

Our bridal magazine, again, it’s a 25-, 28-year-old brand in an era that’s supposed to be “print is dead.” I don’t know if the podcast folks can see me doing air quotes on print is dead. It’s catering to 20- and 30-something people. Record print revenue. Why? I think you have to ask, why is that? That just seems to run counter to so many narratives that are out there.

Really, we talk about three things. We have to be great at three things. One of those is service. We want to be a company that is known for, when you answer the phone, to how we send an invoice, to how we help our marketing services and build ads. We just want to be a company known as a really elevated concierge service. Number two, we want to have content that is so unique and indispensable that your life moves because of what you have experienced. That goes for our bridal magazine, that goes for our tourism magazines, that goes for Luxury Lifestyle, that goes for business. Content as such a central figure to every day-to-day discussion of how we do that.

Then the third one, which sort of brings us back to this revenue story, the third one is audience. Who is our audience, and what do they need? We talk about this incessantly, which, again, is where this whole meetup relationship comes in. This is not supposed to be a promotion for a meetup, but it’s been a valuable partner in this journey. We must understand our audience. I say that to say I’ve got 10 reporters just on the business magazine team. Not one of them have ever run a company. They barely can read a balance sheet and a profit and loss statement, but they have never met a payroll, they’ve never launched out there and wagered every nickel in their life. That’s just not their thing.

How do they craft stories to the state’s top CEOs? For us, your audience will know some of these names. The CEO of Walmart, the CEO of J.B. Hunt Trucking, the CEO of Tyson Foods, and I can go on, CEO of the Dillard’s family, they all are here. How do we craft content, having never run a company, how do they craft content that’s so meaningful and powerful? They’ve got to really work very hard at that.

If we do audience well and then provide the content well and do service well, our sales tend to find an arc, and I think people find value in the content more than really around the conduit. We’ve got a lot of digital properties and they’re very good for us, but it ultimately is are we meeting a content need for the audience? That has driven this revenue journey that we have been on.

[music]

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Revenue has doubled. Print is still the largest part of the business, but digital is obviously fighting its way up there. How have you, I won’t call it a transition, but how have you managed the introduction of much more digital revenue with a more traditionally print-focused team?

Mitch: That has been very hard. I would love to tell you that’s easy, and I would love to tell you that I have found a magic carpet ride. It has been hard, because for all the reasons you imply, this company has been around since 1974. It’s had a lot of iterations, but it’s been very print-centric in that journey. Culturally, and the ethos, and just a lot of the people. I’m about to go visit with a 39-year employee here in just a minute to catch up, and we’ve got people who’ve been here 20, 30, 40 years, and all they’ve done is think in terms of print and print market.

It’s just been hard. It’s been a culture change, and it is pushing a rock uphill sometimes every minute, but it’s really living in transparency and honesty that we want to be a company that knowns as solving a problem. This goes back to the content we provide. We want to solve a problem and be that valuable. Same with all the clients that do business with us. We want to be known as the place they can go to and solve their problem.

Part of that is a digital infrastructure, and then part of that is this other part of our business is really what we call custom solutions. That could be creating a magazine just for a company, because we do a lot of that, but it also is serving as an agency of record, helping them create custom gifts and boxes and things that they can ship out to their prospects in order for them to build a pipeline of new business. Whatever it takes to be a problem solver. That whole evolution of a conversation has been hard, and sometimes some of the folks can’t make it, to be fair, but we want to be a company that really stays within what we’re good at, but also has a bigger quiver of solutions that allows us to have greater value.

Because the other piece of this context in our business is that what on a national level, and Gordon Burrell does a lot of research in media and marketing, and we stay tuned to a lot of his work, but one of the interesting trends he continues to survey and find out directly from clients is over the years, how many fewer and fewer and fewer “sales reps” a client is letting in the door.

What used to be four or five, then went to three to four, and now we’re down to one or two, because we just don’t have time, and a lot of people are selling crap, and they can’t be trusted. We want to be known as the people of trust who bring real value and real solutions and real knowledge to this group, and digital was just a critical part of that, but, Jacob, it’s been hard, and we’re much better today than we were seven, eight years ago when we launched into this journey. We still find some culture pain points every now and then, but it’s been hard turning that ship to being very solution-minded versus being just “print-minded” or singular-minded.

Jacob: Let’s jump to team structure since we’re talking about people so much. With so many different brands, and you alluded to your publishing team earlier in the call or in the episode, do you think about these brands very much in silos? Is the sales team focused by selling product or brand? Is it all shared services? Talk to me about that.

Mitch: I don’t know if it’s possible. I don’t guess we can share a visual here. Maybe there’s a way we could get this out. Here’s how we refer to that. Everybody, let’s think of a donut. You can visualize a donut, but there’s an outer ring of a donut and an inner ring of a donut, right? There’s the hole of the donut. The outer ring for us is populated by, and if you saw my visual that we share with all the members of the team, the outer ring of the donut is our forward-facing teams.

We have this six to seven teams that each have their own leader driving their own initiatives and their own brands. Some brands are singular. The Arkansas Business Weekly product is a singular brand team. It has its own editorial team. It has its own sales team. It has its own publisher. A key group of people that are driving it every day. They do not sell for, and they do not write for, for instance, our Bridal brand.

We have a whole other group of people who love bridal, and that team, the Bridal team, what we would call the consumer special pubs teams, they produce a collection of nine magazines. They shepherd about nine different brands, and every six weeks they’re on a different brand, and they circle that brand around once or twice a year. Our city regional magazine, Little Rock Soiree, is a single brand. There’s an editor and a publisher and a sales team, and that’s all they do. Our business special pubs team has another 9 or 10 brands, but it has its own sales team and its own editor and its own publisher, and they’re driving.

If you think about the sales teams and editorial teams are on the outside of the donut in that particular journey. What is shared services is the center of the donut. Think accounting. There’s one accounting team that takes care of all those external products. There is what we would call marketing services. When a salesperson sells something, a campaign or a single ad, digital or print, they go through a team that really helps work with the client to bring all the materials together, bundle that up. They’re incredible hubs of the wheel around here, but that marketing services serves every team.

We have six or seven art directors, and those are designers, page designers, ad designers. They’re their own team on the center of the donut, and they serve all those external products. There’s one guy who does work consistently on the business magazine, and he has for 22 years, but he also does other things. He does other products. That’s not necessarily a full-time job for him to just do the business magazine.

We have a center suite of products that do service shared services. These external products are really where all the revenue sits, all the sales come in there. That’s why they have the aforementioned contribution margin that goes to fund the hole, which is both admin and shared services as well. I hope that visual of the donut helps stick, but we do have a visual that actually is what we refer to as the donut that illustrates the company structure.

Jacob: With those sorts of shared services, how are you determining allocating of resources between the different brands? How are you determining on a full basis, what’s profitable, what’s not profitable? Because you don’t want to have 15 accountants for every single brand. You want to have one, but they got to split their time. How do you handle that?

Mitch: Oh, Jacob, now we’re getting into the good stuff. Man, this is the home run question for Mitch. I love this stuff. For instance, let’s just take one brand as an example, and we’ll call it our City Regional Monthly Magazine and Little Rock as an example. We know a couple of things. We time track everybody. Every designer and everybody in all that shared services suite time tracks. If they spend a minute on a product, 20 minutes on a product, two hours on a product, two days on a product, it’s all time tracked. We have this history of time, over time about what it takes to execute at a high level of each of the products we do.

We can see how much time the lead designer for Soiree spends curating, crafting, art directing, planning that product. We know to a real specific degree, and I can tell you, that’s going to be about 22 to 28 hours a week is how that works. Then that leaves this 12 to 15 hours a week where we can have her contribute to other teams. It is the time tracking that helps us manage our staff resources internally, and allows us to find both the most efficient way to do this, but also really leads to our level of profitability because the way this works, the outside of the donut in effect, the way we’re set up, effect contracts with the inside of the donut for time.

The publisher of Little Rock Soiree approaches once a year, the art directors or the manager of that team and says, “I need 28 hours a week out of a designer or a team to execute this product. We’re going to launch three new things. I’m going to need more time over here than I’ve ever planned.” They negotiate the amount of time that’s earmarked for Soiree in that scenario. We do that for every product.

Every product gets a profit and loss statement that reflects the time of design on their specific product. It reflects the time for ad design on their specific product and the editorial time on their specific product. So that we can tell with significant specificity what profitability is per product, per website, per print product, per digital initiative, per event, per custom product. We can make an evaluation of who’s hitting the contribution margin. If we’re not hitting the contribution margin we want, usually there’s a strategic reason like we’re building. It might take two or three years to build up to or five years sometimes to build up to. All of that is tracked and labor is allocated based on that time. There’s a rate attached to that journey.

We even time track the amount of time it takes to time track. I know how much time our crew spends. It’s frankly about 2000 hours a year, which is a lot. That’s the equivalent of a full-time body just to account for the labor. I have millions of dollars worth of labor and it’s important for me to understand the profitability of our product. It’s one of those things that we measure to know how much time we’re spending even capturing this data. For me, that’s the trade-off. “All right, I’m trading off 2000 hours across the company to really find this level of detail. That’s been really important as we navigate profitability, we determine which product is going to stay and what products we’re going to replace, and where we’re going to invest. That all goes toward the big picture of where our health is.

Jacob: You’ve mentioned events a few times. What sort of event products do you have out there?

Mitch: I’m still a little on what I would call event hangover. I’m a little exhausted this morning. Wednesday night, we had an event where 600-800 people were in a room for one of our business events called the Arkansas Business of the Year. It’s like the Oscars of the business world in Arkansas. We have multiple categories. There’s small biz, mid-biz, mid-size, large, super large. There’s exec of the year, nonprofit exec of the year. There are five finalists and then there’s the big reveal, the winner is. Top execs from all over the state descend on Little Rock to come to that and participate in that. It’s an enormous event. We’ve been doing it for 36 years. It is really part of our institution.

It was a long night on Wednesday night. I’m not sure I’m fully recovered from missing a couple hours of sleep in that journey. The way we look at events is we have two buckets. Technically, we have three buckets of events. We have an experimental bucket, so we’ll get into that. We have an event called Awards. We have a whole collection of events around awards, and we have a whole collection of events around education. Then we have another group we’ve been experimenting with that, frankly, hasn’t gone great. What we call EFOP, events for other people, where people hire us to produce events for them.

Who love the way we story tell and the level we deal with, all the experience. We’ve been trying to find a business model around EFOP, as we say. The business events would be something like the Business of the Year Awards would be– many of your listeners are familiar with and probably have in their market what’s known as a 40 under 40. Who are the 40 upcoming leaders that need to be recognized? We do a big editorial display and a large event around that. That’s a lunch event. There’s the best places to work. There’s been there’s a healthcare event. There’s a variety of events in our business space.

They tend to take on a model where we have a collection of honorees that we can reward and acknowledge for extraordinary accomplishment. As a business model, we sell sponsors who want that audience. We sell tickets. Then we have a whole team that’s really managing all the storytelling, all the video, all the multimedia work that we do with that and worried about what the meal is and where the forks are, and what the arrangement is. Thank goodness that’s not me because I would go nuts trying to manage that. They love it and they’re exceptional. That’s the awards group.

The education group we really built out a handful of years ago as part of our expansion to meet an audience need. How can we provide professional development opportunities to the state? We now have four large events for just women. It’s called the Women’s Leadership Symposium. We do one in Little Rock. We do two others in two other parts of Arkansas and then one in Fort Worth where we bring in– it’s really much more informative and educational where there’s a lot of leadership development tracks.

Hundreds of people are at each of these. It’s primarily talking about obviously I go and men can go. There’s usually two men in a sea of 600 people, but I’m one of them. It is an extraordinary event of education and camaraderie. We’ve been doing that now for a few years, but that’s another thing that we have built out along the way. Awards and education are two of our tracks in the event world there.

Jacob: You’ve talked about how digital has grown as a percent of revenue, business has grown revenue, so therefore it’s a meaningful chunk of the business. Are there any digital ad products in particular that you have found just absolutely crush it for the business?

Mitch: Excellent question. It’s interesting for that journey. Again, we’ll put digital in two buckets as well just to help the audience. One, we have a collection of what we refer to as O&O, owned and operated. This is the dot coms that support the print product. With the business magazine of Arkansas Business, there’s an arkansasbusiness.com. It has a whole digital strategy that is both gated, and paywalled, and free content, and paid content. It has a subscription strategy. It has an audience-building strategy. Frankly, the aforementioned [unintelligible 00:45:38] and deeply engaged in how we data collect and manage that audience and provide to that audience.

There’s a very different strategy there than we do with, say, our bridal audience. The bridal audience is quite transient. This would make more sense. You get engaged at 20 whatever. I was a late bloomer. I didn’t get married till I was 30. Whatever you get, you get engaged. Then suddenly it’s all things weddings for 12 to 18 months. You’re in a deep, intense funnel of wedding planning. You need a whole host of information about venues and dresses and caterers and photographers and videographers and all the stuff. Then you’re done. You’re not looking at wedding information 18 months from now. It’s over. You’ve moved on in life. That’s not the business audience.

Highly consistent, growing, steady CEO types. This other is quite transitory. Each of the dotcoms have a strategy. In that journey where this big digital growth has happened has been in what we would say all the other digital outside of our internal universe, whether that’s SEM and social and a whole host of Legion. I think Legion has really been the place that we’ve been able to really make our mark with this. Having a very analytics-driven approach to what is working, as opposed to just buying a bunch of display ads on a lot of crappy sites and getting a lot of bot clicks and a lot of trash that isn’t effective.

We have really approached our digital infrastructure with a team. It’s a more expensive way to do it. The quality level is intensively better to take this approach where we are actively working in a Legion role, as opposed to just a model of, hey, let’s just put up a few ads and we’ll do a little SEM and we’ll throw a little on Facebook or Insta and drop a couple of TikTok’s and then you’ll be on your way. Our team is sort of intensely in the funnel management for each of our clients, whether that’s a pest control company or a metal buildings construction company or a lot of banks.

How do we drive a person from interested in a mortgage to fill out a form to be a lead into the bank is a real part of our strategic approach that has paid dividends for us. If that’s really what has worked for us, there is the marrying of a tech strategy and a marketing strategy and a cognitive sort of analytical strategy to drive results for a client. That’s been what has really driven the significant growth for our digital team.

Jacob: I want to go a little bit broader than just your portfolio publications. Much ink has been spilled talking about the death of local news. You were a newspaper mentor a while and a lot of these are local newspapers that are dying. How do you think about brands like yours and specifically, I suppose, would be your Arkansas business brand, filling in for these local newspapers that are dying and covering issues that they might have covered in the past?

Mitch: Another conversation we have a lot. You’ve hit right down the middle here. Number one, I would say we’re a niche product. What that means is we know who we are and what we’re not. To that point, we recognize in this market and across the country, general news is struggled with that TV print or whatever. We’re not all things to all people, and we can’t be that way. We’ve got some great editors who understand their role in the universe. They know what a story is good for us and what isn’t good for us. Just two days ago, I was talking to the head of Arkansas Business, and she actually was pitching a story that she thinks is a great story.

She was pitching it to another media outlet, because it was not good for us, but would be great for them. My pointer say on this death of local news, what our strength has been is knowing who we are and who we’re not and still trying not to be all things to all people. Now, that said, how we have tried not to get sucked into the quote death of news is how much time we spend talking about and actively working toward building trust. I actually believe that trust is the catalyst for all things here, externally and internally.

It is the keyword that makes us thrive that because we are a trusted source, people have turned to us for more marketing help and that’s helped us double more content help. I will tell you, and I don’t know how this fits in this big narrative, but it goes to trust and how we have navigated growth. The call before yours, mine, and yours discussion here. I was on the call with a custom client. I don’t want to name their name, but they’re a large organization in the state. They produce a magazine internally four times a year. He said to me, “Mitch, my boss loves Greenhead,” which is our Duck Hunting Magazine.

He listed three other magazines we produce. He says, “Why can’t our magazine be as good as this magazines?” Now they were just on the call confirming, “We need you to produce our products because our audience needs better.” When I think about sort of our place in the local news infrastructure that’s struggling, I don’t want us to lose focus of who we are. I think getting too broad and not knowing our wheelhouse is a problem. However, we spend a lot of time about how to get it right, how do we bring value, and in that value brings the currency of trust.

In this world, and you know this, Jacob, as well as anybody, this is a cluttered world of content. Your phones are full of crap, Twitter’s full of crap, the voices are everywhere. You do not know who to trust. What we have tried to do is curate confidence and trust. Our events have a model, our content has a model, how we serve people has a model, our standard of excellence has a model, and we’ve tried to let that distinguish us in the marketplace. I think that’s why subscriptions have been at a high, sales have been at a high, because we have focused on how to be this trustworthy partner.

I can’t fill every news desert, and it hurts my heart as a news guy that I can’t do that. I don’t know the answer for a lot of towns across this state and this country. What I do believe is that we continue to make sure we are doing exceptional work at what we’re doing, whether that’s bridal or city regional or tourism or business. With that comes trust and doors open for us then to continue to strategically expand on the back of the trust that everybody has built on.

That’s how we approach that journey. Trust is a word that we talk about a lot. Externally, what will this do to our audience of trust? Internally, how we take care of each other, and how we interact with each other, and how we collaborate, and how we respond to email. How should we respond to email internally? All those things sort of curate trust. Trust is a word our leadership team is probably tired of hearing me talk about, but I think it’s the currency that makes the world go round.

Jacob: One obvious thing that I’ve gleaned now talking to you here, but also watching your session is you have a longer-term time horizon than I think a lot of media companies today who operate quarterly. You make investments that might take years to pay off. As you look forward three, five, maybe even 10 years. Normally I ask three to five years, where do you see the business?

Mitch: I appreciate you recognizing that. It is one of the perks of being locally owned and we’ve set up a business structure that we try to operate soundly with the right cash in the bank that lets us plan and strategically move forward. We don’t want to miss on things. I don’t want to lose money, but sometimes we do. We want to be able to be structurally sound so that we can think forward. I have worked for the largest publicly traded media company in the United States, and I know we lived quarter to quarter. It is a very difficult journey when you’re having to satisfy a lot of stockholders. There’s only one stockholder here and it’s me.

Obviously, I have a bank to keep happy, and heaven knows I have a wife to keep happy. I don’t pretend I’m alone in this universe, but it does allow us to frame a discussion. To that end, in the old days, we used to have a 10-year plan. We all crafted 10-year plans. We put them on paper and they more or less worked. Boy, that world is really– that’s evaporated. I don’t think in huge 10-year chunks anymore. We do, I tell people this, I have a one-year plan, a three-year idea, and a five-year sketch is how we think about it. Every couple of years, we recast five years in advance. We just did that at the end of last year.

All of our teams participate, what products are capped. There’s sometimes a product just reaches it– it’s a great product, but it can’t keep growing at the rate we’re growing, but it still contributes the right margin and fills the audience need. Fine, we’re okay with products not perennially growing if they have the right value. Some need to be cast away, some need to be rejiggered if that’s not too much of an Arkansas word. Maybe refreshed, it would be better. Then we’re perpetually reinventing. With really the investments we have now hundreds of thousands of dollars’ worth of investments and things that we’re planning for, we see the next few years is really optimistic.

I mentioned we were a $60 million company, that forecast over the next few years calls for us to be closer to 20 to 22. That’s what the investments we have right now. What our planning is like, okay, now what do we need to be starting, so that can mature three to five years from now? That’s how our strategic planning works. I’m confident– I’m a business owner, so I can tell you I’m nervous about where interest rates are, and an election always makes people nervous because it’s just uncertainty. We have wars in Israel, and Palestine, and Ukraine, and a lot of anxiety in the marketplace.

I can manufacture a lot of things to be anxious about. When we really peel that away, to a team, there was general optimism digitally, print, events, and other. We aggregate that. We continue to see movement forward, both new product development, as well as these maturing investments, and by and large, growth in our core products. We’re generally optimistic about the next few years. You ought to check in a few years to see if I’ve had an aneurysm or I’ve got grayer hair and I have a different tone. Right now we feel pretty good.

Jacob: At least there’s hair on your head. I want to end with the same two questions that I ask every operator that comes on the show. First, what is a mistake that you have made in your career that you wish you hadn’t, and what did you learn from it?

Mitch: Mistake number one is pretty easy for me, and I recognize this is a normal part of maturation and a normal leadership development. When I was a new leader and a growing leader, frankly, I did everything for the benefit of me. Frankly, I tried to do everything because I was really just trying to grow my own resume and experience so that I could get to the next level. The huge mistake of that is how many people I ran over in the process on a one-to-one level. Then the moments what I missed was the ability to learn how to manage and motivate others while I was driving myself and elevating myself.

I’m so serious about this was a mistake. It may be 18 months ago now, I finally got to the last person to apologize for the leader I was about 20 years ago and it all benefited me, it always worked for me. I got to the next level and got to the next ladder and moved to the next thing. I’ve just really regretted the ass I was in the process. I could have been a very different leader. We could have still probably accomplished all the same things, but I could have behaved differently, been a better partner in the business, been a better Christian.

I could have been a better whatever. I felt guilty for the better part of 20 years. I think it was about 18 months ago, sort of got to say my last I’m sorry. That really felt good in that journey. I think I would have certainly managed. I would have been more people-oriented as opposed to Mitch-oriented and a goal structure. I would have relished– I should have taken more time to really value that opportunity to become a better manager as opposed to seeing all of those folks as a stepping stone.

Jacob: My second question is, what is some advice that you would give operators looking to grow their media businesses?

Mitch: Ah, well, again, I think sort of tying this conversation together, what I have found and I’ve been in multiple communities across the country, I’ve been an employee and I’ve been an owner. Maximum transparency that you can possibly stomach has always paid dividends. I think it leads to a real authentic leader if we’re able to share parts of that. I’m still learning how to do that in all fairness. My top exec team, my core six, we just embarked starting 12 months ago on a whole new journey about deep dive on business health and Mitch’s goals. Growing the value of the company and what is balance sheet health.

I was never– it’s really personal stuff. It’s been really good to bring in that level of folks to educate them on why Mitch is pushing us in decisions. They get to buy into that in a new way. They find the authenticity valuable. This journey that goes to your previous question is learning that a good leader isn’t always right and doesn’t have to know every answer. That vulnerability of bringing them into the process and telling them, honestly, I’m struggling or I’m scared or whatever, has been an incredibly meaningful journey. I think advice number one is to find a new level of transparency in your journey as a leader.

I does always pay dividends. We share everything here, everything except salaries. We don’t tell each other what each other makes. Beyond that, everything is open, and I will sit down with anybody to explain anything. We do it at all staff meetings. I have a handful of key transparent numbers. When we’re bad, I want to tell them we’re bad. Even if we’re struggling, it’s okay to say, “Hey, we hit a rough spot here, and here’s our plan out of it.” I think people are just looking for authentic leadership, and I think I’ve seen people rally to that.

One, this transparency, and two, and I bet most of your audience would understand this, but I think our ability to embrace reinvention is part of the fuel of the universe and to just not be complacent. A friend of mine gave me a book, and this is a great place to punctuate that. The name of the book I’ve adopted it as a life motto because it summarized my lifelong anxiety. The name of the book is, and it’s dated. It’s an older book, but the principles are still there. Only the Paranoid Survive.

The idea that we must never be fully complacent. We must always be looking to improve. That story goes back to the Intel microchips and the founding of Apple. You can go read it, and so it’s sort of dated in context, but its principle is sound. Only the paranoid survive, and so that idea of just getting up every day, thriving on how we can be better at every possible thing, that reinvention, I think would be the second thing I would focus on.