{"id":241037,"date":"2022-01-19T18:43:25","date_gmt":"2022-01-19T18:43:25","guid":{"rendered":"https:\/\/orourkemediagroup.com\/?p=241037"},"modified":"2022-01-19T18:43:25","modified_gmt":"2022-01-19T18:43:25","slug":"annual-letter","status":"publish","type":"post","link":"https:\/\/devsiteomg.com\/omgsite\/2022\/01\/19\/annual-letter\/","title":{"rendered":"Annual Letter"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Welcome to our Company\u2019s first annual letter\u2014yes this is my attempt to copy something that Warren Buffett does each year at Berkshire Hathaway.\u00a0 He\u2019s been an inspiration to me for some time now. \u00a0 Let\u2019s start off with results\u2026<\/span><\/p>\n<p><b>2021 Highlights &amp; Results\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Total company revenue was +55% in 2021 vs. 2020.\u00a0 This is inclusive of acquisitions and any publication changes and additions.\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">EBITDA operating margin finished the year at 14%; this is lower than expected largely as a result of using cash flow for investments in technology partnerships and people.\u00a0 We see a clear path to a margin of 20%-25% depending on the market.\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">We completed three acquisitions in 2021, expanding our local footprint in Minnesota and Wisconsin while adding a totally new market in New Mexico.\u00a0 Each of these acquisitions came with excellent groups of people.\u00a0\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Our digital revenue monthly run rate tripled from Jan 2021 to Dec 2021 and is now 27% of total advertising revenue.\u00a0 Our Sales team amazes me with these results and the deal sizes they\u2019re closing with small, medium and large businesses.\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To-date, we\u2019ve launched new websites in every one of our markets.\u00a0 We\u2019ve partnered with Town News on all the them except in Queen Creek, where we license the Village Media platform through a partnership with them and Google.\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Page views have more than tripled since this time last year and the number of users has doubled! \u00a0 We now have a digital audience that contributes to growing revenue and profit.\u00a0 It\u2019s important to note that both digital revenue and audience were practically at ground zero at each business that we acquired in the past three years with the exception of the digital agency in Kiel, WI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reader revenue is 15% of total company revenue.\u00a0 The December run rate is +20% vs last January.\u00a0 These numbers are driven primarily by print subscriptions and no price increases.\u00a0\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<p><b>Our Strategy<\/b><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019re only three years in, but I\u2019m happy to report that our strategy is indeed working.\u00a0 We\u2019ve completed 10 acquisitions and now operate in five states with 23 publications and hyper-local websites, including several new markets where we\u2019ve launched just hyper-local websites.\u00a0 It\u2019s not about print or digital.\u00a0 Content and our established, trusted newspaper brands are in the center of our strategy.\u00a0 We\u2019re focused on revenue diversification but Advertising is our primary revenue source without debate; all other revenue that we generate is complimentary.\u00a0 <\/span><b>The single biggest factor to executing on our strategy is putting forth a TOP PERFORMING SALES COMPANY<\/b><span style=\"font-weight: 400;\">.\u00a0 This positions us to fund resources needed in News and each functional area, to rapidly grow our digital agency while continuing to maximize the value of our print publications and other products, to grow our digital audience and 1<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> party data, to service and payoff our debt, and to invest in more acquisitions and other non-traditional media businesses to diversify our portfolio.\u00a0 Bottom-line though, if we can\u2019t grow advertising revenue, we have no strategy.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All of our digital content is free with the exception of the e-edition.\u00a0 I don\u2019t believe readers are ever going to pay for digital access to local news.\u00a0 If they do, those dollars will not support a\u00a0<\/span><span style=\"font-weight: 400;\">viable, growing revenue business over the next five to 10 years.\u00a0 We have not increased print subscription pricing in any market over the past three years, even as we\u2019ve significantly improved our products.\u00a0 We recently reduced our store price in half in the Vermont market.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019ll continue to publish print newspapers and niche publications as long as they contribute positively to net income; we\u2019re not going to expedite print decline to force digital.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Our revenue growth over the next five years will be organic and through additional acquisitions.\u00a0 We plan to expand to 100 markets then we\u2019ll take it from there.\u00a0 Digital agency revenue will grow exponentially in current markets and as we expand into new markets.\u00a0 One of our key short-term and long-term metrics is to deliver a 70-75% gross profit margin (costs excluding people) on total digital revenue generated.\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n<p><b>Our People\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019d like to acknowledge every one of our employees, their dedication and all of the hard work being put forth in each market across the Company.\u00a0 Over the past month or so, I\u2019ve been able to meet with so many of them individually and in small groups, and it\u2019s an impressive team\u2014person by person, maybe the best team I\u2019ve worked with in 20+ years.\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Employee retention in each functional area has been exceptional while we\u2019ve recruited and onboarded a steady flow of new employees into the company.\u00a0 We have competitive compensation plans, decent medical benefits, paid time off, and most recently, a new 401 (k) retirement savings plan with a respectable company match.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I believe we have two of the best in the business running our Sales and Digital divisions.\u00a0 Caleb Anderson is our VP of Sales that joined the Company in January 2021 shortly after we acquired several publications from Forum Communications.\u00a0 Joe Mathes is our GM in Wisconsin and VP of Digital Strategy for the Company.\u00a0 Joe and I are partners on our WMG affiliate company.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other notable people additions or changes in 2021. \u00a0 Sally Shepherd assumed responsibility for IT and Process Improvement for the Company. \u00a0 Sally came to us via the Forum acquisition and provides strength and stability in these critical areas of the business. \u00a0 Dave Pevonka also joined via the Forum acquisition.\u00a0 He\u2019s added stability and strength to Operations, Circulation and the Business Office in Cannon Falls.\u00a0 Megan Ivey joined in a newly created position\u2014Digital Marketing Fulfillment Manager, where she\u2019s charged with the day-to-day management of the internal digital fulfillment operation.\u00a0 Joe Paul joined the Company as a Digital Sales Manager in MN-WI.\u00a0 Joe works with the team on closing new digital business and also develops his own book of business. \u00a0 Jim Johnson came onboard as Managing Editor of the MN and WI businesses.\u00a0 Jim brings great experience and renewed energy to the Newsroom in these markets.\u00a0 Bridget Higdon was named Managing Editor for the Vermont business. \u00a0 Bridget started with us as digital reporter in Chittenden County in July 2020 in the midst of the pandemic and was promoted several times in just 18 months.\u00a0 Tara Jones was promoted to Managing Editor of the Madison market and continues to be responsible for the newsroom in Sheboygan. \u00a0 Tara was originally hired as a digital reporter in Sheboygan in August 2020.\u00a0 Pam Mathes was promoted to Director of Sales Operations in Wisconsin, where she manages sales activity to drive print and niche ad revenue.\u00a0 Kelly Mixer came onboard as Reporter\/Editor for the new business launched in Queen Creek, AZ.\u00a0 She brings 25+ years of experience and has hit the ground running in helping to build a digital media presence in Queen Creek.\u00a0 And, mostly recently, Kemmie Ryan joined as Editor-in-Chief of our City Sun Times publication and brand in Arizona. \u00a0 Kemmie comes from the magazine business and is charged with breathing new energy into those products and digital audience.\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I did want to acknowledge another special partner of mine in the business, my wife Denise. \u00a0 When we set out to build our own company late in 2018, I asked her if she could just handle payroll after our first acquisition in Vermont.\u00a0 For the previous 19 years, she was busy with a more complex job than I could ever imagine\u2014staying at home to raise our three kids.\u00a0 As we sit here today, Denise handles payroll for our entire company.\u00a0 She has expanded her role to also handle accounts payable for the entire company.\u00a0 When invoices come in, she books them in the finance system real-time.\u00a0 This is so valuable because we know where we stand with expenses every day of the week&#8211;I don\u2019t need a month end process to know how we did in any given month.\u00a0 She handles many of the behind-the scenes tasks associated to HR.\u00a0 Lastly, and maybe most importantly, she\u2019s a sounding board, a voice of reason and so much more when we\u2019re having discussions about the Company, which is pretty much every day.\u00a0 What she doesn\u2019t know about the legacy newspaper business is a breath of fresh air!\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><b>A look ahead\u2026<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Our Company\u2019s top priority in 2022 is to do even better with retaining and developing employees in each functional area.\u00a0 We\u2019re going to keep hiring and adding talent.\u00a0 Combined, this will lead to taking care of our customers and readers while achieving our revenue and profit goals in 2022.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From a revenue number perspective, we expect to grow in 2022 by minimally 50%.\u00a0 This goal calls for doubling digital revenue, hitting prior year level with print advertising and completing a few acquisitions; we expect to close our biggest acquisition to-date in the next few months.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Joe, Caleb and I will continue to work closely together in taking next steps to elevate the performance of our Sales company. \u00a0 We have a really special Sales team in place that is only going to keep getting better.\u00a0 The playbook is intense, but it\u2019s fun because we have so many people that want to win and make money!\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Our talented Newsrooms will continue to improve when it comes to producing content and growing our digital audience. \u00a0 We\u2019re going to launch into four or five new markets with hyper-local websites but the majority of our focus will be on growing audience in each of our current markets. \u00a0 I should also add that we\u2019re pacing towards relaunching a few print publications in several markets to address what we think is an opportunity to better serve those communities (have to be quiet on where for competitive reasons).\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019re open-minded about acquisitions in 2022. \u00a0 We could do one or we could do five or six. \u00a0 It\u2019s pretty cool that we have the team and back-end infrastructure that can move quickly and intelligently with integrating additional businesses into the Company.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The past few years have certainly come with challenges associated with the Covid-19 pandemic.\u00a0 I feel very fortunate that we\u2019ve been able to significantly grow and strengthen the Company during this time.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thank you to all of our employees and partners that play a role with building a fast-moving, adaptive and top-performing media company.\u00a0 We\u2019re just getting started and the best is yet to come!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Jim O\u2019Rourke<br \/>\n<\/span><a href=\"mailto:jorourke@orourkemediagroup.com\"><span style=\"font-weight: 400;\">jorourke@orourkemediagroup.com<\/span><\/a><br \/>\n<span style=\"font-weight: 400;\">CEO <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Welcome to our Company\u2019s first annual letter\u2014yes this is my attempt to copy something that Warren Buffett does each year at Berkshire Hathaway.\u00a0 He\u2019s been an inspiration to me for some time now. \u00a0 Let\u2019s start off with results\u2026 2021 Highlights &amp; Results\u00a0 Total company revenue was +55% in 2021 vs. 2020.\u00a0 This is inclusive [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[23],"tags":[],"class_list":["post-241037","post","type-post","status-publish","format-standard","hentry","category-company-updates"],"_links":{"self":[{"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/posts\/241037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/comments?post=241037"}],"version-history":[{"count":0,"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/posts\/241037\/revisions"}],"wp:attachment":[{"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/media?parent=241037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/categories?post=241037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/devsiteomg.com\/omgsite\/wp-json\/wp\/v2\/tags?post=241037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}