If you want to make money from a newsletter, sponsorships are the most profitable, reliable way to get started. Advertisers know that email newsletters are one the best ways to get in front of consumers. Just look at the numbers.
- According to Smart Insights, publisher newsletters earn an open rate of 22% or higher.
- The Seattle Times found visitors referred by a newsletter were 25 times more likely to convert than those referred from other sources.
With mega-success stories like Morning Brew — a newsletter that earns $20 million a year — making money from your newsletter sounds like the ultimate dream gig!
And it can be.
But that doesn’t mean you should blast subscribers with a ton of paid-subscription offers and a never-ending wall of ads.
Newsletter monetization might look effortless, but really it’s an art. Here’s the load down.
3 main ways to make money from a newsletter
There are many MANY ways to make money off your newsletter. This article primarily focuses on advertising and membership models. In our opinion, they are the fastest way to get started.
To spread out into other genres of monetization, this excellent article is a must-read that covers topics like merch, affiliates, and donations in detail.
1. Paid subscriptions
These are well detailed by companies like Substack. In their own words “Readers pay directly for writing they care about”.
However be aware that subscriptions are limited. There are a limited number of people who want to pay for subscriptions to a newsletter. Many publishers have found this model to be lucrative only when used in conjunction with advertising.
2. Native sponsorships
With a native sponsorship, you display promotional messages or ads alongside your regular newsletter. This can be in the form of an ad placed in a specific area of your newsletter or you can allow advertisers to send out a dedicated sponsorship.
Here’s what you should remember:
- You should never grant an advertiser access to your subscribers email addresses. Doing so could have legal consequences.
- You should always make it clear when content is sponsored else subscribers will lose trust in you.
- Always give yourself enough time to get the correct creative and links from the advertiser before sending.
- It’s good practice to send advertisers a report with the campaign’s performance.
3. Programmatic ad placements
These placements are inserted into your newsletter’s HTML. Ads are then displayed to your subscribers based on their contextual interests. Paved offers this via their Ad Network (sign up and create a profile if you’d like to try them out).
No matter who you use for programmatic placements, it’s important to remember:
- GDPR is a big deal. Make sure the service you use adheres to privacy laws
- If you have less than 10k subscribers or send less than four times a month, programmatic is probably not the best choice for you.
- Any ad should match the rest of your content in style (think fonts, colors etc) for best performance.
3 ways to charge higher sponsorship fees
1. Choose relevant advertisers
Newsletter influencer Marie Dolle has some interesting thoughts on how curation is reinventing e-commerce. She elaborates, “publishers are influencers. They are the celebrity thinkers of our time. And in the new anxiety economy, people look to influencers when there is uncertainty.”
Yep, if you run a newsletter, you’re an influencer. And with that comes responsibility to your audience.
Advertising is a brilliant way to increase revenue brought in from your newsletters, but it’s a huge turn-off to your subscribers if ads are irrelevant or jarring next to your regular content.
Your subscribers are looking to YOU for your opinion, thoughts, and input. When accepting sponsorships, make sure that:
1. The ad will be relevant to your audience
2. The product/service is interesting to your audience
3. The ad can blend with your regular content (that means you need to have an active hand in creating it).
Off-topic advertising means poor results for advertisers. And poor results, means fewer sponsorships.
2. Don’t overload your newsletter with ads
“More ads = more money”.
It sounds logical. But in practice the opposite is true.
It’s more like “revelvance + subscriber engagement + number of subscribers * number of sends = more money”
Relevance: We spoke about this above. Make sure that the advertiser and product is relevant to your audience or you’ll never get good performance. In the end, this means you can never raise your prices.
Subscriber Engagement: This is up to you! Your subscribers should always opt in and be interested in your newsletter. Anything below a 20% open rate indicates that you have some list cleaning to do.
Number of Subscribers: The more subscribers you have, the more your newsletter can charge. Advertisers are after impressions (opens) and clicks. The more of those you deliver, the higher you can charge!
Number of Sends: This is your secret weapon so use it wisely! Over at Paved we’ve found that publishers who send more often earn more overall. That’s because “more sends = more ads which in turn actually does equal more money. However start sending multiple times a day, and your income per email will drop dramatically. You still don’t want to bombard subscribers.
In summary, ad-heavy newsletters only get slower load times, higher unsubscribe rates, and poor revenue. The absolute maximum recommended without impacting performance is three. And each of those should be a different format (eg. one with an image, another as a snippet).
3. Don’t sell yourself short when setting prices
Uber recently found out that over half their advertising budget was being spent fraudulently. Out of $150 million spend, one hundred million dollars had zero impact on Uber’s business.
What does this have to do with how you price your newsletter?
Newsletters tend to be safe havens. Unless you’re one of those shady characters who subscribes people to a list without them opting in, everyone who receives your emails, wants to get them.
Unlike other channels, that means you have a very low risk of bots. Which makes you a safer bet than most social media channels these days!
Here’s one other thing to think about: Your audience value.
B2B advertisers are willing to pay far more than your average B2C advertiser. If your audience is full of silicon valley tech CEOs, you can bet that an ad in your newsletter comes at a serious premium!
See our blog on how to set your newsletter advertising rates to learn more.
How do you find advertisers?
Ah, the million dollar question!
There are a few ways, but the short answer is, it’s not easy at the start. I suggest spreading your wings wide and trying every avenue possible.
- Join a marketplace
Marketplaces are where advertisers can find a library of newsletters and book sponsorships with them. You won’t be able to pitch advertisers directly, but you will show up when they search your niche of subject matter.
- Actively pitch to advertisers
You can find out which advertisers are currently working with newsletters on a service like Email Revenue Solutions. Armed with this information, you’re just a few emails away from securing a sponsor.
- Join a network
Share leads with fellow creators! This Facebook group in particular has a great community vibe. NewsletterCrew is also a fantastic place to network and learn. You’d also benefit from getting listed on a service like Letterlist where advertisers can easily find you.
- Grow your newsletter
The bigger your newsletter, the more attention you will attract. Make sure advertisers know how to get a hold of you by putting a small ‘advertise with us’ button somewhere on your website.
Can you make real money with newsletter sponsorships?
At the end of the day, some publishers still avoid monetizing their newsletters because they’re scared to drive away readers by being salesy.
But ads don’t have to distract your subscribers from the content.
With relevant, minimal, focused sponsored content, you can actually add value to your readers. By curating advertisers, your readers may start to actually look out for these recommendations.. A practice that newsletters like The Hustle have perfected.
If you take one lesson away from this article, it’s this: Having one source of monetization is good. Having multiple sources is better.
Feel free to leave a comment with any questions. Or, if you have over 10k subscribers and are ready to seriously monetize your newsletter, create a profile on Paved.