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Is ad revenue actually holding up for newsletters?

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Hey newsletter friends,
this is Mark from Revue welcoming you back 👋 to another edition of The Week in Newsletters.
I got a lot of great feedback again last week about my advice on newsletter naming. A really interesting story was by Mike McPhate. Many of you probably know his amazing newsletter California Sun, which has been going strong for years already. What I didn’t know was that the newsletter actually started out as the Golden Stater, another great example that newsletter names can be changed.
Please do keep those great replies and stories coming. About today’s topic “newsletter ad revenue” or anything else you would like to share or have questions about. You can reply to this email ↩️ or contact me at Also invite your friends to join.
Enough intro, time for my story of today.

Newsletter ad revenue
The pandemic has been absolutely brutal on publishers. So bad that even The Atlantic had to join a long list of publishers having to resort to layoffs as Sara Fischer writes for Axios:
The Atlantic joins The Hollywood Reporter, Fortune, Billboard, The Economist Group, Group Nine Media, BuzzFeed News, Vox Media, Bustle Digital Group, Cheddar, Maven Media, G/O Media, Protocol and others who have resorted to layoffs and furloughs.
That’s even after The Atlantic scored a few big hits about the coronavirus, which propelled it to record traffic. But traffic is not enough if it cannot be monetized. And several monetization options have taken a big hit, especially events and ads. Ad revenue, for example, has been down by more than 50% according to some numbers.
But surprisingly, there was one part of the ad business that was holding up - newsletter ads. In fact, last week there were three bullish reports about newsletter publishers that run ads.
The first was a case study about 6AM City by Dan Oshinsky in Not a Newsletter.
Here’s something I didn’t expect to hear when I got on the phone a few weeks ago with Ryan Heafy, co-founder and COO of 6AM City, publisher of seven newsletters across the southeastern United States: “April was our highest grossing revenue month ever.”
You read that right. Ad revenue is up for 6AM according to the case, thanks in part to a few key strategic decisions:
  • The newsletters are hyper-local, focused on readers and advertisers from just one community.
  • The newsletters are focused on reader engagement instead of list size.
  • Newsletter ads are native and sold on a cost per open basis.
More evidence of this came in a post by member-funded media company Study Hall, which covers journalism and turned a tweet storm into a great post about why publications are doing layoffs right now:
There are three alternative models that have been gaining steam recently. Those are: Podcasts, newsletters, and nonprofits.[…]
Newsletters: Newsletter companies like Girls Night In, Morning Brew, or The Skimm are still doing well because they have a more direct relationship with advertisers and readers and they have much smaller staff numbers because the work is often more about aggregation than creating original content. This isn’t a model for a major newspaper, but it is a bright spot.
What stands out to me here is the direct relationship with the advertiser. Similarly to 6AM, newsletter publishers like Morning Brew or The Skimm have a very clear idea of their audience and create native ads that provide value to that audience and blend in perfectly with the editorial newsletter content.
The third piece of good news were some numbers reported by MediaPost about email marketing platform LiveIntent.
In late March, email marketing platform LiveIntent began a study of how its local media newsletter clients were performing. What it found is newsletters among that group report a 45% increase in impressions and a 32% increase in revenue, despite the COVID-19 pandemic.
Again we see ad revenue holding up in a group of local newsletters.
Those are three examples only and I’m sure it’s not all good. But I do spot a trend that ads or sponsoring are still viable under a few conditions:
  • A clear definition of the audience and focus on providing unique content for that audience.
  • Highly engaged and loyal readers.
  • Native ads that blend with the rest of the content.
Since newsletters are well suited to provide all of the above, it might not be too surprising to see ad revenue hold up well for some of them.
An example of where things are not going well is Quartz, which has several great newsletters such as Obsession.
Jacob Donnelly did an in-depth analysis of the situation at Quartz in his newsletter A Media Operator. He first present the facts:
Quartz’s owner, the Japanese financial intelligence firm Uzabase, announced the layoffs in a public filing Thursday. The company said about 40 percent of Quartz staff members would lose their jobs, with the cuts focused on the advertising department. Quartz had 188 employees at the end of last year, Uzabase said.
Then analyses the situation and comes to the following conclusion:
I just don’t understand what Quartz is trying to do. It’s stuck in this weird middle ground where it’s trying to be everything for everyone, so it’s not focusing on any one audience.
This seems to confirm the conditions I outlined above. Where 6AM, Morning Brew, The Skimm and other local newsletters using LiveIntent have a laser focus, Quartz is after a much broader audience and scale, which got it in trouble on the revenue side.
So clearly the ad business is in big trouble overall, but newsletter publishers might be OK if they are able to truly connect advertisers with engaged readers.
The week in newsletters
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