Email newsletters appear to be back in a big way in 2020. Brands, agencies, and influencers have begun to embrace them like never before. SimilarWeb reports that Substack, a platform for subscription-based newsletters, is experiencing exponential growth in 2020. Terry Godier told Coywolf that “Substack is the new Medium.”
Substack site growth
Marketers are also leveraging newsletters as a way to get around tighter budgets and increasing ad rates. David Mihm, Founder of Tidings, told Coywolf that “Facebook and Instagram are constricting organic visibility well under 1% for brands, but open rates and click rates on email have remained steady over the past decade at around 21% and 2.5% respectively.” Mihm added, “For many small businesses, these have even increased during COVID. Email remains the channel through which the majority of customers prefer to hear from local businesses and even brands.”
This Pro article explains:
- why email newsletters are making a comeback
- the surprising insight learned about newsletters after the Apple search engine article went viral
- if you can really make money from doing a newsletter
- what makes a good newsletter and things to avoid
Why email newsletters are making a comeback
There’s been a significant increase in newsletters being created and promoted on social networks lately. In particular, it seems like anyone with a decent social following and the ability to write well has made a newsletter on Substack. There are several reasons why I think this is happening now.
The pandemic has changed a lot of things for a lot of people. Almost everyone’s livelihood has been affected by it to some degree. Many brands have smaller advertising budgets, agencies have fewer clients, and consultants (along with agencies) are looking for additional income sources.
Email newsletters present an opportunity to reach and engage with targeted audiences without a large budget. They can also become a significant source of revenue if they’re subscription-based.
There’s an endless flow of news articles and blog posts that flood social media feeds. It’s exhausting trying to keep up with everything and then determining which content is worth your time.
Information overload is one of the main reasons email newsletters are gaining in popularity. Respected brands and thought leaders are using newsletters to filter out the noise and curate the best content.
Normalization of subscriptions
Now that software, video, and music subscriptions are common, consumers have become more accustomed to subscribing to written content. For example, GigaOM and The Information provide in-depth tech news and insights that require a subscription. Additionally, newspapers like The Washington Post, The New York Times, and The Wall Street Journal have moved to a subscription-based model. All of them appear to be thriving using this model.
Services like Substack and Memberful have helped extend the subscription model to email newsletters. They also make it easy for thought leaders, industry experts, and brands to create a subscription-based newsletter without any technical expertise.
Cheaper than advertising
More focus is being given to newsletters because they’re more affordable. David Mihm told Coywolf that “ad rates are going up on social and search, and companies are facing higher acquisition, retention, and remarketing costs.” Mihm said they’re focusing more on email because “companies realize that their marketing time and dollars are better spent growing and nurturing an audience that they own, as opposed to renting.”
Email newsletters are also appealing because email service providers such as Campaign Monitor and Mailchimp have made it inexpensive to intelligently and reliably send mass emails.
Traffic from newsletters drive newsletter signups
On Coywolf News, I have an unoptimized, truly basic email newsletter subscription form. It’s the last thing on the page before the footer. It’s not something I’m proud of, and as excepted, it doesn’t perform very well.
Imagine my surprise when newsletter signups started pouring in about a day after my Apple search engine article on Coywolf News went viral. After reviewing my site analytics on Fathom, it became apparent where they were coming from. The article was being shared in multiple email newsletters, and their subscribers were reading the entire article and then subscribing at the end of it.
Even though I never expected it, It’s a phenomenon that makes sense when you think about it. People who subscribe to newsletters that curate content will likely read the entire article, and they’re also more willing to subscribe to another newsletter.
Based on this experience, if I ever want to grow my newsletter subscribers or capture email addresses, I will research and sponsor as many relevant newsletters as possible. I will also optimize the email signup form and make it prominent on the page.
Can you make money from doing a newsletter?
Part of what’s driving the influx of email newsletters is the subscription model. While several platforms support paid newsletter subscriptions, Substack appears to be the market leader for those who want a hosted service. Whereas, Memberful is used by those that want to self-host and include additional features.
It’s easy for people to assume that people are making money from paid newsletters when they seem to be everywhere. That’s especially true on Twitter, where many thought leaders mention and link to their newsletters on Substack from their profile. The big question is how much money one can make.
Benedict Evans’ newsletter sent a lot of traffic to Coywolf News for the Apple search engine article. One look at his subscriber count and pricing would lead one to believe he’s doing exceptionally well. He claims to have 150,000 subscribers, and it cost $100/year to subscribe. Quick math makes that $15,000,000/year. It’s unlikely that all 150,000 subscribers are paying customers.
Evans likely built up his subscriber count over several years and then saw an opportunity with Memberful to charge new subscribers for access by leveraging his existing audience. Realistically, at his best, 5% of his subscribers are paying customers. If that is true, then he would have 7,500 subscribers paying him $750,000/year. That’s pretty darn good.
Even if 5% isn’t remotely true and his paying customers account for only 0.5% (750) of his subscriber count, he’s still bringing in $75,000/year. For many people, that’s plenty of money to quit their day job and continue growing the newsletter and other endeavors.
It’s exciting to see people like Evans successfully running a paid newsletter, but is that realistic for the rest of us? Terry Godier, who has done a significant amount of research on paid newsletters and recently sold his IndieMailer paid newsletter community, doesn’t think so. He told Coywolf that the proliferation of paid newsletters isn’t scalable.
You can’t subscribe to 200 paid newsletters. You can’t afford it, and you can’t get enough time to read it all. The average price is somewhere around $8/mo, and the average cadence is four times per week.
He was also skeptical about people’s ability to produce content. “The reality is that very few people can write something worth reading 4-5 times per week, and even fewer can write something worth paying for.” After studying Substack, he determined that it takes about two months for most newsletters to die. He expects that a year from now, most newsletters will have died, and only a tiny percentage of successful newsletters will remain. However, he does see hope in a bundled model, something that writers are starting to experiment with, and we may see added to platforms like Substack.
The bottom line is that people can make money with paid newsletters, but it’s by no means a sure thing. If you think you can create something that provides enough value and will be sustainable if you’re able to achieve a certain number of paid subscribers, you should consider trying it.
What makes a good newsletter
There are many different types of newsletters. Some newsletters contain articles that you would typically find published on a blog. Others pick a new topic for each issue and provide a deep-dive into the subject. However, I will focus on best practices for curated newsletters since that best fits one of the main reasons for their resurgence; information overload.
It’s essential to be upfront about how often newsletters are sent. If you state the newsletter will be sent weekly, but you send a new message every other day, you’ll probably get many people unsubscribing. Similarly, if you state that it’s a daily email and only send one message per week, you’re probably losing subscribers.
Send frequency doesn’t have to be regimented. It can only be when there’s something important to share. However, if you state a specific cadence on a newsletter signup form, it’s best to try and stick to it. That’s especially true if people are paying subscribers for a curated newsletter.
Content diversity and patterns
Readers want something that continually piques their interest. While that’s partly achieved by how well the curation is done, it’s also done by breaking up content into unique sections. What you will end up discovering via your ESP’s click-tracking data is that different subscribers will gravitate towards different sections.
Over time, and assuming the content is good, subscribers will expect these sections to always be in the newsletter. They will also develop what psychologists refer to as a dopamine-induced loop as they feel rewarded each time they engage with it.
The Morning Brew newsletter creates these types of sections. They always have their main stories at the top, followed by a group of diverse sections at the end that is repeated daily. These are sections that subscribers become dependent on and look forward to each day. I also know that they’ve been read and interacted with because my Apple search engine article was mentioned in the “What else is brewing” section near the newsletter’s end. It was one of my highest referrers after Google, Reddit, and Hacker News.
Refinement based on engagement
The purpose of curated newsletters is to provide a refined list of stories that subscribers want. A key indicator of success for a curated newsletter is if subscribers click on links to articles. If subscribers aren’t engaging with the content, then the newsletter isn’t providing them with what they want.
Analyzing what people click can reveal what subscribers want most. If particular topics get clicked on more often than others, consider finding and monitoring more sources related to those topics. The result should be increased recommendations for those topics and higher engagement from subscribers.
Avoiding growth schemes
Marketing techniques exist because they work. For example, the interruption marketing technique of displaying a modal window over the content and then asking for an email address results in more email addresses. However, it ruins the user experience for most people who don’t want to give the site their email address. While it’s not something I’ve seen any research on, I think those techniques do more harm than good.
Fear of missing out (FOMO) is one marketing technique I’ve seen being used with newsletters. One of the newsletters I signed up for when researching this article sent me an email stating I was eligible to unlock their special weekend edition newsletter. They had a big “Unlock” button in the message, so I naturally clicked it.
The “Unlock” button took me to a page that said I needed to sign up three friends to unlock the weekend edition. I’m not too fond of this kind of artificial, self-serving marketing tactic. They’re asking me to spam my friends for their newsletter, and at this point, I expect that if I were successful, I would then be told I have to pay for it. They sent additional messages with other annoying “opportunities” that quickly got me to unsubscribe.
These schemes can and do work. The question you have to ask yourself is if this is how you want to grow your newsletter. And if it is, will you be attracting the right kind of subscribers. The answer for you might be yes, but for me, it will continue to be no.
Where to go from here
For those who already have a newsletter, I hope that some of what I wrote resonated with you. If it prompted you to start a newsletter, please share your experience in the forum. I would love to hear about it. Additionally, there are a lot more services for managing newsletters than I mentioned in the article. Please feel free to share your experience with services that have worked well for you in the forum too.