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.