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Let's talk about how to price newsletter ads.
Most people don't feel like they get good answers on this.
Partly because it depends on a lot of factors.
I'm going to show you the factors. And also give some concrete numbers...
Most people don't feel like they get good answers on this.
Partly because it depends on a lot of factors.
I'm going to show you the factors. And also give some concrete numbers...
As a reminder, your free newsletter is ready for ads when you have 2 of these 3:
A big audience
High engagement
Readers willing to spend $$$
Of those 3, the last is probably the most important.
A big audience High engagement Readers willing to spend $$$Of those 3, the last is probably the most important.
There are a few popular ways to charge for ads:
Cost Per Send (CPS)
Cost Per Click (CPC)
Cost Per Open (CPO)
We'll dig into each in a sec, but first, a crucial vocab term..."CPM"
Cost Per Send (CPS) Cost Per Click (CPC) Cost Per Open (CPO)We'll dig into each in a sec, but first, a crucial vocab term..."CPM"
When we talk about ad prices, we use the term "CPM".
It just means the cost for 1,000 of something.
For example, if you charge $0.01 for every person who opens the email, your CPM (cost per thousand) is $10
1,000 x $0.01 = $10 CPM
Using CPM just makes discussions easier.
It just means the cost for 1,000 of something.
For example, if you charge $0.01 for every person who opens the email, your CPM (cost per thousand) is $10
1,000 x $0.01 = $10 CPM
Using CPM just makes discussions easier.
Okay, let's dig into those pricing models
Cost Per Send (CPS)
Cost Per Click (CPC)
Cost Per Open (CPO)
For each, we'll look at...
Pros
Cons
Sample pricing chart - NOTE: I use a $50 CPM to keep the math simple. Might be a little high (but not impossible)
Cost Per Send (CPS) Cost Per Click (CPC) Cost Per Open (CPO)For each, we'll look at...
Pros Cons Sample pricing chart - NOTE: I use a $50 CPM to keep the math simple. Might be a little high (but not impossible)
Cost Per Send (CPS): You charge based on the number of emails you send.This is a VERY common way to start, and some major newsletters (like Morning Brew) still use this at scale.
Your revenue is predictable. Clients pay for emails that are sent but not opened.
Cost Per Click (CPC): You charge based on the number of readers who click an ad.This one is less common in newsletters.
Clients feel more comfortable paying only for performance Revenue unpredictable. Also not paid for all the brand awareness you create (only clicks).
Cost Per Open (CPO): You charge based on the number of readers who open the email.Common for mature newsletters to graduate to this.
Clients don't pay for unseen emails, and you still get paid for creating brand awareness Revenue / client cost can be unpredictable.
Newsletters charging on CPC or CPO usually set a timeframe for measuring (~7-14 days).
Reasons newsletters don't start with those:
Tracking / Reporting takes resources young newsletters often don't have.
It's helpful to have past open/click data to estimate client costs.
Reasons newsletters don't start with those:
Tracking / Reporting takes resources young newsletters often don't have. It's helpful to have past open/click data to estimate client costs.
So how do you pick a price?
Well, first, remember those 3 key factors:
Audience size
Engagement rates (opens/clicks)
Readers willing to spend $$$
Your ad rates should reflect how much your advertisers can earn from reaching your unique audience.
Well, first, remember those 3 key factors:
Audience size Engagement rates (opens/clicks) Readers willing to spend $$$Your ad rates should reflect how much your advertisers can earn from reaching your unique audience.
Unfortunately, there's no "newsletter industry standard" for pricing.
If you look at the old rate card for Morning Brew, at one point their primary ad CPM was ~$15 on ~2m sends.
By contrast, Dance Business Weekly has CPMs closer to $200 on ~15k people.
Lots of variability
If you look at the old rate card for Morning Brew, at one point their primary ad CPM was ~$15 on ~2m sends.
By contrast, Dance Business Weekly has CPMs closer to $200 on ~15k people.
Lots of variability
In the end, it's usually a process like this:
Snoop on the competition
Set a price you think someone will pay for
Adjust from there as you grow
You're price is always in flux. You will change it based on the customer, time of year, ad inventory, etc...
Snoop on the competition Set a price you think someone will pay for Adjust from there as you growYou're price is always in flux. You will change it based on the customer, time of year, ad inventory, etc...
If this is your first time selling ads, there are some sample emails here: http://bit.ly/3tBRSYf
They show how Sam sold the first ads at the Hustle.
Copying those is probably your best bet. Tweak pricing until you sell out. Then increase
They show how Sam sold the first ads at the Hustle.
Copying those is probably your best bet. Tweak pricing until you sell out. Then increase
If you want more, go ahead and follow me ( @damn_ethan)
Over the next few days I'll be breaking down newsletter ad sales, including:
-Sales Lifecycle
-Finding clients
-Key questions for sales calls
-Common objections and how to handle them
-and more...
Over the next few days I'll be breaking down newsletter ad sales, including:
-Sales Lifecycle
-Finding clients
-Key questions for sales calls
-Common objections and how to handle them
-and more...
