Having built and run email products that have generated millions in direct-sold advertising revenue, I get asked a lot of questions about how to sell ads on email.
There’s no one formula, but here are some basics that can get you started.
1) How big does my newsletter have to be to sell email ads?
There’s no minimum size your newsletter subscriber list needs to be to sell ads. But there are some guidelines that may help you decide if you’re ready to give it a go — and whether it’s worth the effort given your current list size.
If you’re in a general-interest space, it is going to be hard to move much inventory with a list smaller than 50-100K. That’s not to say it’s impossible, but it’s going to be tough to get advertisers to pay attention. And even if you get on their radar, you will probably need to get creative — cutting deals for bulk ad buys, etc.
If you’re in a more focused space — say, a niche space or a B2B space — you can do well with a much smaller list, even in the low 4-figures. Everything will be determined by how unique your audience is and how valuable it is to the advertisers who need to reach it.
2) What kinds of ads should I be running?
This question is a lot easier to answer: Native email ads. I went over these in some depth here (see point No. 8). In short, these are the ads you see in most modern newsletters, with a sponsor logo up top and a newsletter item that’s sponsored by a brand.
Why go with native ads? They work for the advertiser, getting the best response rates. They work for you, the publisher, because they pay well and they’re the least disruptive to your product. And they work for your reader by blending into the user experience — and, one hopes, by being relevant and useful.
What you should avoid, if possible: Programmatic ads (from companies like LiveIntent and PowerInbox). These can bring in some “easy” revenue for media companies with big lists and insufficient sales staffing. But they pay low rates, and they make your email product look cheap.
The other kind of ads I recommend: Classified ads. If they make sense for your niche, they’re a cool feature to add. You may not make a ton of money on them, but it could be a little contribution to your hosting/ESP costs — and, honestly, if they’re relevant to the users, they’re more of a service than a distraction.
3) How do I price ads?
At the end of the day, this is Capitalism 101: Your ad space is worth what someone’s willing to pay for it. You won’t know much until you test the market.
That said, a very rough range to have in mind is a CPM (cost per 1,000 readers) of $5-$30.
Say you have 200,000 subscribers. Divide that by 1,000. Then multiply 200 by the CPM you want to charge. Say you go with a $10 CPM. Then 200 x $10 = $2,000. You would charge $2,000 for a native ad in your newsletter.
Keep in mind: While you may calculate your CPM starting from your number of subscribers, advertisers will be doing the math about your open and clickthrough rates. If you’re open rate is low (say, 10%, as opposed to a healthier 25-40%), advertisers will be discounting for that.
In general, it is far better to run a clean list with a healthy open rate than to try to pad out your subscriber numbers.
Most email advertising is about direct response (as opposed to squishier metrics, like ‘brand awareness’). Advertisers will always be working out how many opens, how many clicks, and how many conversions your email inventory can yield them.
Start modest in your pricing ($5-10 CPMs). If your results are good enough, you’ll be able to move prices up on your email ads over time.
4) What things do I need to sell ads?
To talk to an advertiser, you honestly don’t need much. Big publishers will have fancy media kits and reams of audience surveys. But you can do business with a lot less.
All you really needs is: list size, open rate, clickthrough rate, sponsor clickthrough rate (if you’ve run ads before)… and the ability to describe your audience.
It also helps to have mockups of what your ad spaces look like (which can be a good reason to practically give away early ads to build up your credibility and sell more profitable ads later).
With those data points and a good outreach email, you’re in the game.
5) Where do I find potential sponsors for email ads?
This is where you may need some creativity. The easiest route is to look at who’s sponsoring other emails in your space.
Subscribe to every newsletter in your topic area, and see who pops up. Are you in the Health space, and you see lots of ads for different fitness trackers? There’s a list of prospects you know should be interested in your audience and which clearly spend some money on email marketing.
You can also follow accounts related to your space on Instagram and see what the algorithm starts serving you in terms of Instagram ads. Now you know some more companies that are spending money on digital marketing.
Think creatively. Identify potential advertisers. Track down someone at the company who manages digital marketing. And make your pitch.
Fill then build…
When you’re just starting out, the most important thing is just to start running ads. Not to hold out for a specific price.
Just get the ball rolling. Get some good results for clients.
And build from there.
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