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How to monetize your newsletter

How to monetize your newsletter

The exact playbook leveraged by some of the worlds most successful newsletters.

Tyler Denk
September 24, 2024

If you have a newsletter, or are even remotely interested in learning how to leverage newsletters to generate revenue — well you’ve come to the right place.

I’m going to share the exact playbook I’ve seen work for some of the most successful newsletters, including a step-by-step guide as to how I took Big Desk Energy from launch to revenue in just a few months.

But why listen to me?

At Morning Brew I sat next to the brand partnerships team, built tools for them, and participated in Morning Brew’s ascent from $100,000 in advertising revenue to well over $20M.
Since founding beehiiv, I’ve witnessed hundreds (thousands?) of journalists, creators, and businesses scale massively successful newsletters.
Big Desk Energy in itself is part passion project, part dogfooding… so I can live and breathe the same thing our users experience. I launched this newsletter from scratch in January, and now have over 20 brands in the pipeline waiting for an opportunity to sponsor it.

So let’s tango.

Let’s start by debunking the #1 misconception about newsletter monetization: that you need to have a large audience.

Sure, that may have been true several years ago, back when most brands and advertisers weren’t actively leveraging newsletters as a formidable acquisition channel. And those that were, were pretty concentrated in only the largest publications. But the newsletter ecosystem has come a long way — monetization has never been more accessible to the masses.

Now I promise this entire post isn’t just me hyping up beehiiv… but I am damn proud of how easy we have had made it for anyone to monetize their content literally from day one:

beehiiv Boosts: users can passively recommend other newsletters to their readers, and in return earn upwards of $5 per lead. Even if you’re growing just a few subscribers per day, that could translate to hundreds of dollars each week without needing a massive audience.
Paid Subscriptions: publishers can launch newsletters that their readers pay for directly… and beehiiv is one of the only platforms that doesn’t take a cut of revenue.
Ad Network: opportunities from premium brands (Netflix, Hubspot, Roku, etc.) are delivered directly to newsletter operators on beehiiv. Brands get access to tens of thousands of the world’s top newsletters (i.e. billions of monthly impressions), and publishers get access to premium sponsors without having to manage all of the bullshit.

The world’s most successful newsletters typically leverage some combination of the above. But in order to really maximize the earning potential of your newsletter, you need to be able to answer two specific things:

What’s your story?
What game are you playing?

When it comes to monetizing your newsletter via sponsorships, it’s important to remember that brands can advertise anywhere. Historically a ton of marketing dollars went to TV, radio, and out of home (like billboards). Lately most of that spend has shifted online to Google, YouTube, Facebook, etc. Ultimately, companies are looking to acquire the highest quality customers at the lowest possible cost.

Your job as a newsletter operator is to tell a story compelling enough to have them divert their spend away from these proven channels and instead allocate those dollars towards sponsoring your newsletter. There are plenty of ways to tell your story.

BCAP is a simple framework that I created (literally while writing this):

Brand: Would the advertiser benefit from being associated with the brand or person? Is it recognizable, trusted, and desirable?
Content: Would others consider the content to be high-quality? Would the ad placement match the context of the content?
Audience: Who are the people who read it (i.e. demographics)? How many people read it (i.e. size)? How engaged are they (i.e. engagement)?
Performance: Can the newsletter and writer influence purchase behavior? Have previous sponsorships performed well for advertisers?

So what’s the story for Big Desk Energy?

Brand: Written by me, a startup founder and CEO, who has raised nearly $50M and is quickly scaling beehiiv.
Content: I share the behind-the-scenes stories, strategies, and milestones in real-time as I build the company (i.e. it’s unique 1:1 content).
Audience: Read by over 50,000 founders, startup employees, and decision makers in the tech ecosystem. The newsletter boasts a 46% open rate and 7.5% CTR, both many multiples the industry average.
Performance: I only recommend products and brands I genuinely use and love, which has built trust with my audience. This current newsletter is sponsored by Oceans because beehiiv has leveraged them to scale our operations team. I’ve also hosted two high-ticket Masterminds in Costa Rica, each time with over 50 applicants.

tl;dr — Big Desk Energy is a trusted resource for over 50,000 highly engaged founders and decision makers in the startup ecosystem. Now, if you’re a B2B SaaS company looking to acquire new customers, would you be interested in getting in front of this audience? That last question was rhetorical.

Which leads me to the second question: what game are you playing?

Morning Brew covers general business news and pop culture, which leads to a fairly broad audience: ranging from doctors, to investment bankers, to students in high school. That means their advertising pool is also fairly broad, but typically yields a lower CPM.

💡 CPM (cost per mille): what advertisers are willing to pay for 1,000 impressions (or opens).

Morning Brew is in the size game. They can offset a lower CPM by scaling the size of their audience.

💡 Revenue = CPM * Impressions

On the other end of the spectrum, some publishers go very niche. A newsletter that is read by 5,000 CTOs would yield absurdly high CPMs because advertisers know that they are penetrating a highly concentrated audience of decision makers in the technology industry. These newsletters could generate more revenue with a much smaller audience.

So what game is Big Desk Energy playing?

Because my audience is mostly founders and startup employees, ideal sponsorship partners include B2B SaaS platforms and other technology and talent service providers. The customers of these companies often have a high LTV (lifetime value), meaning each conversion is very meaningful for the advertisers.

To keep numbers simple, let’s say that I charged $10,000 per month for sponsorships.

Brand A sells a product for $100. I’d need 100 of my readers to purchase their product for them to just break even on their investment.
Brand B sells an enterprise product for $20,000 per year. I need just a single reader to convert for them to see a 2x ROAS (return on ad spend). And that doesn’t even factor in that customer potentially renewing for a second or third year (i.e. $40,000 or $60,000 of lifetime revenue).

I want to play the game that serves Brand B… and be damn good at it.

Which leads us to the final part: how?

First, I created a survey to better understand who my audience actually is.

beehiiv has a native survey feature that allows you to collect first-party data directly on your website. Even better, using the custom signup flow feature, you can designate the survey to be a part of your signup process so each new reader is prompted to complete it.

Vertically integrated surveys FTW 🙌

There’s no one size fits all as to what data you should collect — it will vary from publication to publication. This is where you need to understand the “what game are you playing?”

To better tell my story and serve B2B advertisers, I wanted to understand the seniority, roles, and skillsets of my audience.

I also leverage beehiiv’s automation features to build a welcome series that does two things:

Sends a welcome email to new subscribers.
Sends a reminder to complete the survey, only if they haven’t already.

What a smoking hot welcome series looks like

That reminder email has an absurdly high click-through-rate of 33%. In total, almost a quarter of my readers have submitted the survey, which is a very large and representative sample.

Next, I leveraged all of this first-party data (along with engagement data from my newsletter stats) and created a media kit using Figma Slides.

A media kit is an asset that tells your story, which you can send to potential sponsors. A great media kit should do all of the “selling” for you and help them come to a very simple conclusion: yes, I need to sponsor this newsletter.

If you’re curious, here’s the (already-outdated) media kit I created last month.

Lastly, I began reaching out and sending the media kit to companies that I already use and genuinely love. I value this approach for a few reasons:

It makes copywriting simple because I can just share my real experiences using the product.
I feel like it’s a natural extension of the newsletter that provides value… because I would genuinely recommend it to other founders anyway.

At beehiiv, we have used Oceans to hire a handful of incredibly talented people from Sri Lanka to do everything from sales, invoicing, billing, and tons of other admin work. They were one of the first companies I reached out to to sponsor Big Desk Energy.

And the cherry on top of it all — I’ve had a handful of founders reach out to me and rave about the people they’ve hired via Oceans since they initially saw the sponsorship several weeks ago. If I’m going to run ads in this newsletter, I want them to genuinely drive value for you all 🤝.

The newsletter industry has come a long way, but we’re still just getting started.

If you enjoyed this post or know someone who may find it useful, please share it with them and encourage them to subscribe: mail.bigdeskenergy.com/p/san-francisco

Oceans is home to some of the most talented knowledge workers in Sri Lanka. Think MBA-level, fluent in English, with companies like Ogilvy and KPMG on their resumes.

They connected us with Dulara and Udaiyanee about a year ago, and now they handle everything from sales, invoicing, billing, and tons of other admin work.

Best of all — these are full-time hires that we pay $3,000 /mo.

Oceans is a founder’s best friend. Take advantage of $500 OFF your first month because you’re a reader of Big Desk Energy.

Credit: Laura Cano

This rig for sure needs another monitor, but I understand not wanting to ruin the views of the waterfall.

Shoutout to Laura for the reader submission 🫡.

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This Redbull ad is mesmerizing (LinkedIn)
Michael Jordan owns one of the greatest watch collections of all time (GQ)
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