How to leverage paid marketing to drive newsletter signups

The best way to acquire a new newsletter subscriber is to be recommended by another newsletter.

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Welcome! I'm Simon Owens and this is my media newsletter. You can subscribe by clicking on this handy little button:

Hey folks! Today I’m answering questions from readers. If you have a question you want me to answer in a future newsletter, leave it in this thread.

The best way to leverage paid marketing to drive newsletter signups

The first questions comes from Neal Bascomb:

On Twitter, I often see advertisements for various newsletters, whether independent creators or from legacy publications like NYT and Economist. In your view, what is the most effective paid marketing for driving subscriptions (whether paid/free).

Paid marketing has become a pretty common practice in the newsletter space, especially for outlets looking to scale up very quickly. Morning Brew was an early pioneer with this strategy, and I’ve since seen many other newsletter publishers copy its approach.

I would say there are three main ways to deploy paid marketing spend (not including blackhat tactics like buying lists). I’ll start with the most effective and work my way down:

Paid placement in other newsletters

The best way to acquire a new newsletter subscriber is to be recommended by another newsletter. Not only are they self-selected as newsletter readers, but they already have their inbox open, which means they’re more likely to see and click on a confirmation email after they’ve signed up.

Lots of newsletters sell sponsorships now, but there are also marketplaces like Paved and Sparkloop that have paid referral programs you can sign up for. The way it works is that you set the maximum amount you’d be willing to pay per subscriber – say, $3 – and then individual newsletter creators can go in and grab customized links that track those conversions. This arrangement can be ideal because you only have to pay for the ads when they actually work. 

Paid social promotion

As you mentioned in your question, more and more newsletters are buying native ads on social media. There are two approaches to this.

The first is to create some kind of call to action that attempts to entice the person into directly signing up for the newsletter, usually by explaining  its value proposition. I definitely wouldn’t go this route unless you’re retargeting the ad toward people who already consumed your content but neglected to sign up.

The second kind of ad actually promotes a specific piece of premium content. These are not only better at driving clicks, but can also lead to organic sharing that you don’t have to pay for. Snigdha Sur, founder of the paid newsletter The Juggernaut, spoke to me previously about how she leverages internal analytics to choose which articles to promote with paid spend:

Paid [marketing] is usually not a sustainable growth strategy unless you have signal. The way you get signal is to *not* do paid at first and see how your articles perform. Wait about 1-2 weeks. Then put paid marketing spend behind your best performing articles. This might be obvious but I feel that marketing departments often are too quick to put spend behind something. You want to figure out if it is truly a global vs local maximum first. …

…The results? Content is often a hit driven business. Sometimes one article can lead to hundreds and even thousands of subscribers long after you’ve published it. Oh and our strategy is to do about 90-95% evergreen and 5-10% news cycle related. That increases the longevity of each piece to basically infinity. 

Influencer marketing

This isn’t as common, but I have seen newsletter publishers work directly with influencers on Instagram, TikTok, and YouTube to recommend their newsletters.

When done well, this can be pretty effective. On a recent Office Hours Zoom call with my subscribers, the political blogger Taegan Goddard mentioned that one of his biggest jumps in paid subscriptions came when a random TikTok star devoted an entire video to talking about his blog, Political Wire. He didn’t pay for the placement, but it certainly opened his eyes to TikTok’s ability to drive real engagement.

The Daily Upside, a finance-focused newsletter, also experimented with influencer marketing. Here’s how founder Patrick Trousdale described it to me:

“We're kind of a scrappy media upstart, and that resonates with a lot of creators on TikTok and Instagram. So when we reach out to creators, it's not as some big stodgy brand, it's kind of like we’re fellow creators.”

Some of this creator outreach resulted in collaborations. “Sometimes we'll almost license out some of our content or story ideas. A TikTok creator will make a video about it as if they came up with the content, but then give us a shout out at the end of the video, because it was our legwork that they used to make the script.”

Overall, I wouldn’t recommend diving into influencer marketing unless you have a substantial ad budget and the resources to monitor the results. Mileage can vary widely depending on the influencer’s dedication to the sponsorship and the engagement level of their audience, so it’s an easy way to waste a lot of money if you’re not constantly optimizing for which influencers actually drive signups.

What do you think?

Do you want to reach my audience of creators, media operators, marketers, and tech workers?

On January 1, I plan to increase my sponsorship prices significantly, which means that if you’ve ever thought about buying an ad on my newsletter, now is the time to do so. Go here to learn everything including list size, open rate, audience demographics, pricing, and ad availability.

Quick hits

Are esports a growing market with a huge amount of future potential? Yes. Did investors get too far out ahead of their skis with assuming that esports would quickly overtake traditional pro sports in market value? Definitely yes. [Bloomberg]

It turns out media companies don’t make for very good tech companies. [The Rebooting]

Will a recession bring direct-to-consumer brands back to podcasts? [Bloomberg]

How BookTok is fueling a resurgence in fiction reading. [Vulture]

How to price your paid newsletter

The next question comes from Krystal Knapp:

What are current subscription pricing trends for B2C newsletters? I talked to dozens of journalists over the summer and many didn't have a rationale for their pricing. They assumed X was the going rate and priced theirs accordingly. How should creators determine a price? What should they factor in (including inflation and the fears of a recession)?

A lot of writers struggle with the question of subscription pricing, mostly because the per-unit cost of sending a newsletter is basically zero. At least with physical products you can start with the price of production and then calculate from there. But how do you determine the financial value of an item that costs you nothing but your time?

Well, the answer is that you perform a bunch of math problems. Start with setting a revenue goal, and from there you reverse engineer the number of subscribers you’d need to reach that goal.

Many writers settle on $100,000, both because it’s a nice round number and also because it’s widely considered to be a decent middle class income. From there, you can map out various price points and their corresponding subscription numbers:

$100 per annual subscription = 1,000 subscribers 

$50 per annual subscription: 2,000 subscribers 

$150 per annual subscription: 666 subscribers 

Ok, one more piece of math: you need to figure out how many free subscribers you need in your sales funnel in order to hit these numbers. Most newsletters struggle to convert more than 3 to 5% of their free audience into paid subscribers. So let’s add that to the figures:

$100 per annual subscription = 1,000 subscribers = 20,000 free signups

$50 per annual subscription: 2,000 subscribers = 40,000 free signups

$150 per annual subscription: 666 subscribers = 13,320 free signups

So once you’ve done all this math, then it really comes down to assessing the feasibility of hitting any of these numbers. Here are some questions you should be asking yourself:

How exclusive is your content?

If you’re a political opinion blogger or film reviewer, then you’re not producing highly differentiated content. Sure, you might have a unique voice or point of view, but you’re essentially competing against every other social media user who posts their political and pop culture opinions. The average reader is unlikely to pay a high premium to access your content.

On the other hand, if you’re consistently publishing breaking news or original reporting, then your content is highly differentiated. Readers would naturally be willing to pay a higher price to access content that they can’t get anywhere else.

How narrow is your niche?

You’ve probably noticed that extremely niche publications tend to price their subscriptions higher. That’s partly because the total addressable market is much smaller.

If you write about national politics, there are tens of millions of people who follow that topic, so reaching 50,000 free subscribers isn’t unfeasible. You could therefore afford to price your subscription lower and make up for it in volume.

But if you write about, say, molecular biology or private equity? The number of people who care about those topics is infinitesimally smaller, and so you’ll need to price your subscription higher if you want to reach your revenue goals. The upside is that you’ll likely have a much smaller universe of competitors; that’s why many content entrepreneurs choose extremely narrow niches where there’s virtually no competition at all.

Is your newsletter B2C or B2B?

I know your question specified B2C, but I like to broaden these answers out so they address more readers. There are two main reasons that consumers are willing to pay a higher price for B2B content:

1. It’s perceived as helping them with their careers: They’ll therefore value it more because of the potential to increase their income.

2. It’s a legitimate business expense: If you work for a company, then you can expense it to your employers. If you’re a freelancer, then you can write it off on your taxes.

Are you monetizing your content in other ways?

Let’s go back to that initial goal of $100,000 in annual revenue. If you’re monetized solely through subscriptions, then you need to convert 1,000 free readers into paying subscribers at $100. But what if you’re already generating $50,000 in advertising revenue? Then you only need 500 subscribers at $100, or 1,000 subscribers at $50.

This is why I’m always a big advocate of revenue diversification: you can squeeze out far more revenue with less scale. It makes it much easier for you to offer competitive pricing, which then makes it easier for you to convert your free readers into subscribers. It makes the economics of online publishing much less brutal. 

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Obviously all of this isn’t an exact science, but I think these are good frameworks to use when pricing out any digital product, whether it’s a subscription, ebook, or online course.

Have a great weekend!