Publishers

How to Set Your Newsletter Advertising Rates (Without Selling Yourself Short)

If you’re ready to monetize your email list, advertising is one of the quickest and easiest ways to do it.

Not only do you get to finally turn your hard-earned email subscribers into a real income strategy, but you can do so without the time and energy associated with selling your own product or even setting up affiliate links.

Once you’ve decided to experiment with advertising, though, you’ll very quickly realize that you have to set your newsletter advertising rates.

And, just like many conversations about money, advertising rates have a certain mystery about them.

How much should you charge? How can you stay competitive and also be sure you’re not pricing yourself too low?

While I can’t alleviate all of your worries and tell you exactly what you should be charging, there are a few techniques to help you to decide how to price your newsletter advertising.

Types of Newsletter Advertisements

Advertising to your newsletter audience generally falls into two categories: dedicated email and sponsored email.

The difference is that a dedicated email is entirely dedicated to your sponsor’s message, while a sponsored email features a small ad next to your own original content.

In both cases you receive the content from the advertiser and send it to your audience. The advertiser never gets information about your subscribers, like their email addresses, unless they opt into the offer after receiving your email.

It’s important to decide which type of email advertisements you’re going to offer to advertisers when you’re considering how to set your prices. Because of the size difference, a dedicated email advertisement costs more than a sponsored email.

If you’re using Paved to partner with advertisers, you can select either or both forms of advertisements to list on your profile.

Join our network of publishers to learn more about monetizing your list with email advertising.

What does CPM mean in Email Marketing?

Once you’ve decided what type of sponsorship to offer, you’ll need to figure out your CPM. CPM refers to cost per thousand subscribers.

CPM is used as a way of measuring newsletter advertising rates on an even level, even when newsletters have a vastly different number of subscribers. You’ll determine your CPM based on the total number of subscribers you have.

Sometimes you’ll hear about “visible CPM,” which is the same idea, but is calculated based on the number of subscribers who actually open your email. Advertisers use visible CPM to gain insight into how well their campaigns work, but when you’re setting your rates, you only need to worry about CPM.

You can easily calculate your CPM yourself, or you can use an online CPM calculator. To calculate your CPM, just divide the amount you will charge for an email send by the number of subscribers you have, and then multiply by 1,000.

(Cost of Email Send / Email Subscribers) x 1,000 = CPM

You aren’t done once you set your rate based on CPM, though. Remain competitive by knowing the cost per click (CPC) and potential cost per acquisition (CPA) of advertising with you.

Since metrics outside of CPM matter to your advertising partners, you should keep track of them just like you do your CPM.

If you have a publisher account in Paved, you can look at the ROI calculator on your profile to see your CPC and estimate potential CPA for advertisers. Of course, the actual CPA will depend on the conversion rate of the advertiser’s landing page.

Know Your Numbers

Now that you know how to calculate your CPM, you can start to think about your newsletter advertising rates in the same way that advertisers do.

Bogdan Sandu, who runs the Design Your Way newsletter, cautions against paying too much attention to list size. “That doesn’t mean anything. You can have 100,000 subscribers, and less than 5 percent open rate, which doesn’t mean much for an advertiser. They’re interested in clicks and conversions. Deliver those above their expectations and then consider raising the price,” he said.

When you start to think about rates that you charge for newsletter advertising, you need to get up close and personal with your email list metrics. Start by looking at:

  1. Number of Subscribers
  2. Open Rate
  3. Click Rate

Average the open rates and click rates for the past few emails you’ve sent to get a sense of what’s normal for your list.

Once you know your metrics, you can compare them to average to help you price your list. Don’t know what average looks like in your industry? Mailchimp tracked averages across a number of industries in this study.

If your open and click rates are above average, you can likely charge a little more for a newsletter ad. If they are below average, you’ll want to set your rates a little lower in order to remain competitive.

If your open and click rates are much lower than you’d like them to be, it might be time to look at pruning your list.

Setting Your Rates

Now that you know where you stand, you can set your newsletter advertising rates.

For a starting point, in working with our community of advertisers, we’ve found that they generally like to keep their dedicated campaigns under $30 CPM. If you’re aiming higher than that number, you should have a very niche audience or very high open and click rates.

Keep in mind that you may also want to begin by pricing your newsletter ads slightly lower than your ideal price point. The first few campaigns you participate in will help you establish a relationship with publishers and will help to show how effective your campaigns are.

Don’t worry, you can change your pricing later on, once you have the metrics to support a higher rate.

Finally, allow for negotiations. Just because you mention a certain price in an email discussion or on your Paved publisher profile doesn’t mean you’ll always find an advertiser that is comfortable with that number. Don’t be afraid to be a little flexible and allow for negotiations with your sponsorship partners.

Finding Balance for Your Sponsorship Rates

Armed with the knowledge of your email list metrics and the different ways you can think about pricing, you will be ready to set your newsletter pricing, confident that you’re competitive without undercharging.

If you want to be paid faster and easier than ever, sign up for a Paved publisher account.

Not only will you get paid the same day you send, but you can set your own rates and make it easy for advertisers to find you. Click here to join our community of publishers now. or check out what monetization tools Paved has to offer.