Newsletters Should Be Step One for New Media Companies
Over the past couple of weeks, there has been a lot of talk about the newsletter boom dying away. Things were rip-roaring when the pandemic was at its worse. Everyone was launching a newsletter, Substack was dropping six-figure advances, and for a minute there, I thought newsletters might become a top 10 industry in the United States.
There was also a lot of talk about how media companies would die because all of the best talent was going to leave to go solo. This was the existential crisis. “People don’t trust brands, they trust people” was the rallying cry. Let’s look at The New York Times, which now has 9.17 million paid subscribers. I think the brand’s fine.
When the world reopened, people realized there was more to do than reading derivative thoughts about Web3 or the latest rage-inducing political rant, and newsletter after newsletter faded away. Of course, the big ones still exist, primarily because they were making a boat load of money, to begin with. But your average writer who was trying to do something? They’re gone.
But newsletters are not gone. On the contrary, the cat’s out of the bag now. People understand far better now than they ever did just how powerful a tool a great newsletter can be.
Originally, most media company newsletters were just an RSS feed of the stories they had published the previous day. It was an afterthought because money was made on the website. They just wanted clicks.
Politico was an early player in the “newsletter as a product” phenomena. Mike Allen’s Playbook generated over $3 million a year in advertising. The Skimm and Morning Brew proved that you could have fun in the inbox while still reading important news.
Now there are media companies that are legitimately investing in creating great newsletters. The boom helped publishers to understand the value of email. And it helps that Axios just sold for $525 million. It started as a bunch of niche newsletters. Yes, the website was also a priority, but there’s a reason its star talent all write newsletters.
Going forward, I would be shocked if every media company that launches doesn’t first begin as a newsletter. It’s too straightforward a strategy.
Look at the recently launched FoodFix. Helena Bottemiller Evich was formally at Politico and recently launched FoodFix as a solo newsletter. It’s the same path that many reporters took. But I can see a future where FoodFix expands beyond just food policy in Washington. I’m sure each state has its own policies. Then there’s the non-policy side of the food industry. FoodFix could grow into a legitimate, b2b media company serving the food industry. But it’ll have started as a newsletter.
There’s Puck, which launched about a year ago. This is an amalgamation of newsletters across a variety of topics. This is similar to Axios’ model. It hires well-known reporters who have big followings and has them write newsletters. In this case, the newsletter is the product, but it’s easy to see how this could expand to become so much more.
Jake Sherman and Anna Palmer took the daily grind of Politico Playbook and re-created it with their own media company, Punchbowl News. It immediately had a team rather than just a solo operation, and has expanded into other types of content, but it was grounded in its newsletter.
Payload, a b2b publication about the business of space, also started as a newsletter. It has some web content and a podcast, but by and large, the bulk of its revenue and its audience engagement comes through the inbox.
I talk about all of these because, even in 2022, a technology as old as email remains one of the most impactful distribution channels that exists in media. The primary reason for this is that the publisher controls when it pushes information to the reader. But if we take a step back and look at email more broadly, it allows for two other things as well.
A richer user profile
One of the big reasons email can be monetized so nicely is because we know more about who is receiving the newsletter. Since we can push information to their inboxes, we can also directly ask them to tell us who they are. That has a major impact on our ability to sell advertising.
But more than that, it allows us to build a richer user profile about these people. One of the reasons I advocate for media companies to get CDPs is because you want to know as much as possible about your readers and a CDP allows you to do that.
Ultimately, though, you need to relate that data to a person and an email address is one of the best ways to accomplish that. Unlike a cookie, which is device-specific, an email address can sit across devices. I check email on my computer and my phone.
By using email as the core of my data profile and then building around it, I can start to build a richer user profile. This is what I pound my chest about on a weekly basis when it comes to gathering 1st-party data. But, by starting with the newsletter, you’ve already got that central data point figured out since readers have to give you their email to receive it.
And so, if I have dreams of building a future media company, starting with a newsletter is the best way to start capturing that initial required data point: email.
Where I think many of these newsletter-to-media company upstarts could struggle is in not prioritizing that data capture early enough. If the dream is to grow one day, begin early and start expanding the user profile. But starting with a newsletter gives you a headstart.
Expansion into new products
I said above that email is one of the best distribution engines because the publisher controls when they push information to the reader. For marketers, desperate to get their message in front of people, email is a great channel to work with.
That’s why expansion into new products is easier when you have a strong newsletter. The ability to send a marketing note to all your readers—either as a dedicated send or as part of the newsletter—increases the likelihood that people will see it considerably.
I think this is why a smart evolution for most newsletters is to launch an event. You’ve already got a loyal audience. Now you can much more easily tell your readers that you’re now doing an event rather than needing to just hope they see a house ad on the site. There’s a reason that my first hire at Morning Brew was a head of events. I knew we had loyal readers; now I wanted to find new products to launch that would engage them.
What about subscriptions? For many media companies, newsletter subscribers are some of the highest converting readers from free to paid. Since newsletter subscribers are reading you on a regular basis, they are more likely going to see a piece of content they want to pay for.
In many respects, it’s just an awareness play. And with newsletters, you have a great channel to make sure your readers are aware of you.
Start with email
When starting a new publication—an expansion of your portfolio or something totally new—starting with a newsletter should be a must. Having a podcast, website, events, or whatever else you want is fine as well. But start with the newsletter. This will give you a foundation that will help you grow. Having an audience that you can push information to on your schedule is media’s superpower. Few things beat it.
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