How Much to Charge for Newsletter Advertising

Congratulations! You’ve done it. You’ve built a loyal, dedicated newsletter following. So now what? 

Naturally, I’ll bet you want to cash in and get paid for all the effort that you’ve put in. Get some sweet, sweet ad dollars out of that newsletter you’ve worked so hard to build. 

Newsletter advertising is a beautiful relationship for advertisers and creators. The creator brings an engaged following, the advertiser brings a great product that they want to sell. Bada-bing, bada-boom. 

But if you’re an average creator, you probably have no idea where to start. You want to make sure you get it right—charge too much, and you won’t close any advertisers. Charge too little, and you’ll get taken advantage of. 

So who do you go to for advice? Each creator’s journey is different, spread out across different niches, genres, and industries. And going to them for advice might just make you more confused. 

Some creators are going to recommend that you charge a cost per mille (charging your clients a flat fee per thousand subscribers that you have). Others will say that you should charge by CCP (cost-per-click) exclusively. Still others will say “It’s the Wild West mate. Take what you can get.” 

It’s worth mentioning that using a service like beehiiv’s ad network can take a lot of the guesswork out of what to charge. 

Today, we’ll be exploring the wild world of newsletter ads in depth. By the end of this guide, you should walk away with a more solid idea of how to set the right rates and cash in on the newsletter that you’ve worked so hard to build! 

Understanding the Value of Newsletter Ads

Newsletter ads are truly a win-win for advertisers and creators. Email newsletters are far less crowded and noisy than other social media channels, and consumers are 16 times more likely to interact with ads in a newsletter vs. anywhere else on the web.

It makes sense. Email newsletter creators are curators. In a noisy internet full of silly, useless content and cringy corporate memes, newsletter creators build trust with their audiences by writing and finding good content. It’s one of the best channels that advertisers can leverage. 

Let’s say I’ve started a world-class ultralight tent brand. I need to get the word out about my products. I could take my chances with Search Engine Marketing (SEM) and social media ads, with their ever-diminishing returns and confusing UI. But I want to make tents, not get bogged down in these silly details. So what should I do?

The easiest, most logical path for me to take is to leverage the audiences of creators who talk about ultralight backpacking. This is a far more targeted reach for my products than I’m going to get on the PPC ad marketplace.

The more targeted and specific the newsletter is towards my product’s niche, the more I’ll likely be willing to pay. I’ll need to see some ROI over time, but I’ll happily pay more for advertising in this creator’s newsletter than I would for general advertising. 

Evaluating Your Newsletter's Audience

Newsletter ads are only as good as the audience they get sent to. If I’m subscribed to a newsletter about baking the world’s best sourdough bread and the creator starts slinging makeup, how likely do you think it it is that I might purchase the new lipstick?

That creator has wasted clout with their audience and their advertiser’s dollars. 

On the flipside, there may be a subsection of that creator’s audience that’s actually very interested in makeup. The creator can absolutely find out who those people are with well-worded surveys, and target them with separate ads! 

If you’re a newsletter creator with a following, it would serve you well to find out as much about the demographics of your audience as possible. This will help you find exactly the right advertisers to collaborate with! 

If you have well-structured data on your audience that breaks down their demographics, you’re a lot more likely to close the perfect advertisers. If you’re using beehiiv, you can easily gather this kind of data with surveys, quizzes, and forms. 

Understanding Newsletter Ad Formats

Some common types of email newsletter ads include: 

1. Banner Ads

• Description: These are large, eye-catching images or graphics placed at the top, middle, or bottom of the email. They often include a headline, visuals, and a call-to-action (CTA).

• When to use them: Ideal for promoting special offers, new products, or major announcements.

2. Native Ads

• Description: Similar to sponsored content, native ads match the style and tone of the regular newsletter content. They are designed to be less intrusive and more engaging, leveraging the tone readers are used to hearing from the creator!

• When to use them: To deliver an ad experience that feels like a natural part of the newsletter.

3. Sidebar Ads

• Description: These are smaller ads placed in the sidebar of the email layout. They often include an image, a brief description, and a CTA.

• When to use them: For secondary promotions or products and services complementary to the ones mentioned in the banner.

4. In-Line Ads

• Description: These ads are embedded within the body of the newsletter content, appearing as part of the text flow. They are typically text-based but may include small images or CTAs.

• When to use them: When you want to maintain reader engagement without disrupting the reading experience.

5. Footer Ads

• Description: Ads placed at the bottom of the email. They usually contain a small image, text, and a CTA.

• When to use them: Great for additional promotions or reminders, catching the reader’s attention as they finish reading.

6. Pop-Up or Lightbox Ads

• Description: These ads appear in a pop-up window when the email is opened, after a certain period, or when the reader has scrolled past a certain point.

• When to use them: For urgent announcements, special offers, or collecting sign-ups.

7. Coupon Codes

• Description: These are special offers included within the email, often in the form of a code that readers can use to get discounts or special deals.

• When to use them: Highly effective for driving sales and encouraging immediate action if used sparingly.

8. Video Ads

• Description: Embedded videos within the email content. These videos can showcase products, provide tutorials, or deliver messages from the brand.

• When to use them: Ideal for engaging readers with dynamic and interactive content.

9. Interactive Ads

• Description: Ads that include interactive elements such as polls, quizzes, or surveys that engage the reader directly within the email.

• When to use them: To increase engagement and collect valuable user feedback or data.

10. Personalized Product Recommendations

• Description: Ads that suggest products based on the reader’s previous interactions or purchases.

• When to use them: For upselling, cross-selling, and providing personalized shopping experiences within an email.

11. Countdown Timers

• Description: Ads that include a countdown timer to create urgency for time-sensitive offers or events.

• When to use them: They are effective for driving immediate action and conversions. DO NOT overuse them; they have diminishing returns. 

Factors That Affect Newsletter Advertising Rates

Obviously, if you have a huge audience, brands are going to want to work with you. But that’s by no means the end-all-be-all. 

Think of the size of your audience like a digital billboard on the highway. It’s what’s going to get customers in the door, but it’s not what’s going to close the deal. 

They’re going to want to see that your audience is engaged. If you have 100,000 followers, but only 10% of them open your newsletters, they’re probably not going to want to work with you (unless your click-through rates are through the roof). 

If a brand is investing in newsletter advertising, they want to know that: 

1. They’re getting their product in front of the right people

2. The creator who sends the newsletter is the right person to represent their brand

If you have high open rates, click-through rates, and a pile of replies from interested readers, you’ll be able to charge a premium. 

Analyzing Newsletter Performance Metrics

The most commonly cited email performance metric is open rates. But these are notoriously unreliable and not a great measure of engagement. 

If someone opens your email but doesn’t even look at it (as I often do when clearing my work inbox) that counts as an open. If someone hits “mark as read” on Gmail, that counts as an open. 

A little list cleaning can go a long way to boosting open rates. 

Pro Tip: Delete people that haven’t engaged with you in a long time, or at least put them in a seperate cadence for re-engagement! 

Click-through rates tell you a lot more. They indicate that someone has interacted with the email, which means they opened and read at least part of it. 

To raise click-through rates, test to see what kind of elements your audience likes clicking on! The sky’s the limit here. Just make sure that whatever you choose is authentic to you. 

Reply rates are the gold standard. If someone has above-average reply rates, it means that their audience is invested in talking to them! 

If you’re cultivating an audience, investing time into your replies is key. This is easy to maintain—if someone replies to one of your newsletters, write back! This will encourage future replies and help boost your rates. 

How to Calculate Your Newsletter Ad Rates

Calculating newsletter ad rates involves understanding your production costs and desired profit margins.

Now, if you're a new creator, you might be thinking, "What are you talking about? I just want to write my newsletter and get paid.”

Sorry, you're in the big leagues now. It's time to step up, know your worth, and get what you deserve. Especially if ad dollars are the only way you plan to monetize your newsletter! Here's how you do that: 

Step-by-Step Process to Calculate Newsletter Ad Rates

1. Determine Production Costs

   • Content Creation: Include costs for writing, editing, and designing the newsletter content. Set an hourly rate that you want to hit and stick to it. You don't want to write this sucker for free forever, do you?

   • Email Platform Fees: Account for the costs of your email marketing platform.

   • List Management: Consider the expenses associated with managing and growing your subscriber list, like paid ads to acquire subscribers. 

   • Distribution Costs: Include any costs related to sending out the newsletter, such as email service provider fees.

2. Know Audience Size and Engagement

• Subscriber Count: Know the total number of subscribers on your email list.

• Open Rates: Have the average open rate of your emails ready. Bonus points if you have a graph that shows it going up over time. 

• Click-Through Rates (CTR): Record the average CTR of your newsletter over time.

• Reply Rates: Measure your reply rates, and come prepared with your ten favorite replies from engaged subscribers.

3. Define Your Ideal Profit Margin

• Decide on the profit margin you want to achieve over your production costs. Email lists do not generally cost much to produce, so shoot for 80%-90% in the beginning (unless you’re spending on paid ads). 

Setting Up Tiered Pricing Structures

Setting up tiered pricing will be a lot easier for you once you gain some experience with different advertisers. You’ll have a lot better handle on what it is you can actually offer to clients! 

The tiers you can create will depend on your frequency of sending and audience engagement. 

Let’s say that you send out a newsletter 5 times a week. You could designate one big, juicy tier for a “platinum sponsor,” and feature banners of their product in three of your weekly emails. Then you could designate the other two days for “gold sponsors”, and sell them on a PPC package. 

If you have an engaged audience that loves clicking on things, then a PPC tier makes sense. You’ll be able to get your clients high ROI. 

If you have a huge list, then a cost-per-mille model might make more sense. If you can negotiate a high price per thousand subscribers, this model is a lot simpler. 

Ultimately, it will take some testing to figure out what needs to be done. 

Adding in tiers is a great way to appeal to different advertisers. If you have three pricing tiers with different offerings, you can easily price anchor with the highest tier, and sell sponsors on the median-priced one. 

Best Practices for Selling Newsletter Ad Space

The number one most important thing here, before you even think about rates, is making sure the products you’re advertising make sense for the brand and rapport you’ve built with your audience. 

Reach out to potential sponsors that are authentic to you and your brand. If you have a travel tips newsletter, consider working with a luggage brand. If you have a newsletter about sober living, an advertisement for White Claw probably wouldn’t fly. 

When reaching out to sponsors, you’re going to want to make sure you have an eye-catching media kit. 

Media Kits

Key Elements of a Media Kit

A media kit is a presentation you can use repeatedly to pitch advertisers on the value of working with you. Think of it like a pitch deck that shows your brand's value.

A great media kit should include:

1. Introduction and Overview

   • Description: Provide a brief introduction to your newsletter, including its mission, vision, and unique value proposition.

   • Tips: Use a strong, engaging opening statement to grab attention.

2. Audience Demographics

• Description: Detail the demographics of your audience, including age, gender, location, income level, and interests.

• Tips: Use charts and graphs to visualize data. Highlight unique or valuable audience segments.

3. Engagement Statistics

• Description: Showcase key metrics such as open rates, click-through rates, and subscriber growth.

• Tips: Include testimonials or case studies that demonstrate high engagement and successful ad campaigns.

4. Ad Placement Options

• Description: Detail the different types of ad placements available (e.g., banner ads, sponsored content, sidebar ads).

• Tips: Provide examples or mock-ups of each ad placement within your newsletter layout.

5. Pricing Information

• Description: Clearly outline your pricing models, including CPM, fixed rates, or tiered pricing.

• Tips: Offer package deals or discounts for long-term commitments to attract more advertisers.

6. Case Studies and Testimonials

• Description: Include success stories from previous advertisers that highlight the effectiveness of advertising in your newsletter.

• Tips: Use real data and quotes from satisfied clients to build credibility.

7. Contact Information

• Description: Provide clear contact details for inquiries and bookings.

• Tips: Include a call-to-action encouraging potential advertisers to get in touch.

Negotiating Deals with Advertisers

Negotiating with potential advertisers is a delicate art. It means walking in, knowing your value, and backing it up. 

This is why it's so crucial to pack your media kit with data to support your rate proposals! Highlighting audience demographics, engagement statistics, and past success stories can convincingly demonstrate the value of advertising in your newsletter. 

By showcasing high open rates, click-through rates, and the relevance of your audience to the advertiser's target market, you can justify your pricing and build a strong case for the partnership. 

Advertising With beehiiv

If your eyes are glazed over and you feel a bit overwhelmed after reading all of that, have no fear! beehiiv’s Ad Network makes the whole process we just outlined much, much simpler. 

You can choose from some big-name, premium advertisers and put the whole process on autopilot. Sit back and let beehiiv do the hard stuff, like finding sponsors, vetting them, generating tracking links, and keeping track of how effective your newsletter is at generating clicks for clients. 

All you have to do is sit back and let the money roll into your account. 

Sound compelling? Then it’s probably time you start your free trial of beehiiv.