Innovative Marketing Solutions Our Mission Make our communities

Innovative Marketing Solutions

Our Mission Make our communities stronger and more prosperous through quality journalism and innovative marketing solutions

PLACING THREE BETS FOR GROWTH Six years into marketing services. . . We are investing in three significant changes 1. Two companies: One service, one reseller 2. Focus on the “M” in SMB (hint - it stands for midmarket) 3. One-stop “money manager” approach for Local - Any Local

Bet #1 TWO BRANDS Marketing services group and direct sellers Channel reseller for DFW

OUR NEW WORLD ➢ Sells all “traditional” B 2 C brands ➢ Sells B+C services & products in DFW ➢ Digital services for local clients across the U. S. sold directly and by reseller partners (starting with BMG) ○ Paid Media (search, programmatic, paid social) ○ Native, Social, Content Marketing, Video, ○ Email marketing ○ Search engine optimization ○ Analytics ○ Website design and development

Bet #2

FOCUS ON MID-MARKET WHY NOT Small Business? Low margins, high COGS If we wanted to work for Google, we’d apply Learned from our core business — 80/20 problem looks more like 92/8 Selling tactics & tools vs results LOTS of competition High churn Unsophisticated marketers lacking time or $ to invest WHY NOT Large/Enterprise Business? Global agency competition is out of our league Opportunistic wins but not sustainable Bet #2 The “M” Stands For Mid-Market Targeting companies of $10 million $750 million in revenue; $1 million marketing spend min. We already have experience in key verticals include: retail, professional services, home services, healthcare, ecommerce This market is wide-open, and we can compete and win! More opportunity to differentiate Lower churn and higher margins

WE’VE ALL BEEN IN THIS MEETING. . . Your search keywords are weak… we could do that better. You should invest more in social instead of search… I just want freakin’ conversions at a reasonable cost Bet #3 The Social junk you’re sending me doesn’t convert The programmatic ads would work better if your creative didn’t suck. . . 40% of marketers note “too many agencies to manage” as a top-three challenge

ONE-STOP SHOP Bet #3 One-Stop “Money Manager” strategy allows nimble pivots & true ROI-driven tactics Optimize to the result, not the silo and let insights drive strategy Initial plan is a budget, not a tactical laundry list Aligns our interests with clients Relationships reduce churn Requires transparency and patience on both sides Less scalable Can put skin in game

EARLY PROGRESS ON BETS OVERALL B+C ➢ 94% revenue growth 2015 -2017 ➢ 28% of AHC advertising / marketing revenue; 17% of total SINCE 2017 CONSOLIDATION ➢ Revenue up 15% through Q 2; services revenue up 50% ➢ Average order +40% ➢ Average recurring order +58% ➢ Getting active in M&A ○ Filling service gaps; growing customer portfolios; cutting out middlemen

Where Are We Going

OPPORTUNITIES Service Offering ➢ Evaluate mix - stay competitive + create unique value ➢ Define future paid media model - away from arbitrage, last click ➢ Focus on customer profit - not tactic conversion

OPPORTUNITIES People + Systems ➢ Optimize Client Services - structure, process and resources ➢ Leverage Enterprise Systems to significantly scale the business - kill the "frankensheets" ➢ Recruit outside local media ➢ Culture eats strategy

OPPORTUNITIES Growth ➢ Double down on mid market ➢ Grow franchisee, distributed salesforce clients - share common focus on local and highly repeatable/scalable sweet spot ➢ Expand reseller partnerships with more media companies and agencies

Closing Learnings + Musings ➢ When building a marketing services division / agency. . . • • Don't start from scratch Put your services brand on a building You can't win a race by going half-way, pay close attention to comp plans and client exceptions Be aware - you no longer have marketing resources Also, you don't have product marketing expertise (we outsourced this to ad tech vendors 15 years ago) Buy the extended warranty on new tools + systems Separate P/Ls - all the way to the top ➢ On Staffing. . . • • • Create a realistic recruiting strategy Hire a digital recruiter - bad hire costs and productivity/performance drop off from extended openings far outweigh this expense (*do what I say, not what I do) Make transformational hires

Closing Learnings + Musings ➢ Embrace the legacy but look for ways to flip the paradigm • We are NOT the digital arm of the Dallas Morning News. . . The Dallas Morning News is our number one customer • When it comes to local advertising we’ve been innovating in this space longer than anyone else • You don’t have to believe in the newspaper - what is important is that from 100+ years of delivering newspapers to consumers front door step - we have a HUGE amount of data on local consumers. We’ve take that industry leading data to power the most powerful local marketing services in the market

Thank You + Questions