How to Monetize Your Newsletter With Ads

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Some newsletters sell subscriptions or memberships. Some ask for donations. Some sell products, like merchandise or books. Some sell courses or offer consulting. Some sell tickets to events.

There are many ways to monetize an email list, and not every strategy will make sense for your newsletter. 

But one strategy works for many newsletters, from large publishers to independent writers: Advertising.

The key word is “many” — not all newsletters are a good fit for advertising. In this guide, we’ll answer a few key questions:

• Why do ads work for newsletters?
• How big of an audience do you need to run ads?
• What should you charge for an ad?
• What kind of ad formats work for newsletters?
• What data do advertisers want?
• What platforms can you use to help you sell ads for your newsletter?
• Are there other tools that can help with your ad business?
• Can you run an ad business alongside another revenue model?

Let’s dive in.

Why do ads work for newsletters?

Imagine you’re a yoga studio in a local community, and you’re trying to get the word out to potential customers. Where should you turn?

You could advertise through print, radio, or TV, which might reach a wider audience, but there’s no guarantee that your ideal audience will actually see the ad.

You could advertise on billboards, but proving that those ads worked is hard.

You could advertise through channels like Facebook or Google, but you’ll likely need to hire an agency to help run those ads.

But newsletters offer a variety of appealing features. By advertising in a local newsletter, your yoga studio could:

• Reach a targeted and highly engaged audience.
• See who opened the newsletter and clicked on the ad.
• Track the customer through their funnel, from click to purchase.
• Place and run the ad without having to hire an agency.
• And do all of this at a reasonable rate — without any surprises or unexpected costs.

That combination of things — reaching an ideal audience at a reasonable cost and with the ability to track everything — is pretty unique to newsletters. It makes newsletter advertising a good fit for many brands, particularly those like a yoga studio, that might want to convert newsletter readers into paying customers.

How big of an audience do you actually need to run ads?

Not every newsletter is a great fit for advertising. For instance, many non-profits won’t accept advertising — it distracts from their regular fundraising efforts.

However, many newsletters could be monetized with ads. That local newsletter could be filled with ads for local businesses trying to bring in new customers. That indie newsletter about parenting would be a great fit for an advertiser trying to sell their product to new moms and dads. If you have a specific audience — one that advertisers need help reaching — you can sell ads in your newsletter.

The real question is: Does your newsletter have enough readers to be valuable to an advertiser?

As a general rule of thumb, you can start advertising with a smaller list if you’ve got a niche audience. Imagine you write a newsletter aimed at chiropractors — you write every week about the latest news and research in the space. Many advertisers want to reach those chiropractors to sell them expensive medical equipment or software. It doesn’t matter that you may only have 500 readers; those are the exact people these advertisers are desperate to get in front of, and those readers may become customers who spend thousands of dollars per year buying their product.

Niche audiences include newsletters aimed at readers in a specific line of work or products aimed at readers in a specific geographic area. The harder it is for the advertiser to find readers like these, the smaller the list can be. In most cases, 500 to 1,000 readers is the absolute minimum you’d need — you can still charge high rates for your ads even though the audience is smaller.

For newsletters that cover more general topics, you may need a larger audience — a minimum of 5,000 to 10,000 readers — before you can monetize it with ads.

Audience size isn’t the only key metric, though. Engagement matters, too.

The higher your newsletter’s open rate or click rate, the better. A list with a million subscribers will get an advertiser’s interest — but only if it comes with open and click rates above industry averages.

What should you charge for an ad in your newsletter?

It all depends on what kinds of ads you run and how you choose to price them. Some newsletters use a Flat Fee model, where an advertiser pays a set rate for the ad. Some use a CPM (Cost Per Mille) model, where the advertiser pays based on how many readers actually opened the email. Others use a CPC (Cost Per Click) model, where the advertiser pays based on the number of clicks in the email, or a CPL (Cost Per Lead) model, where payment is only made if the ad leads to a specific action for the advertiser, like a reader filling out a contact form. Lastly, there’s the Affiliate model, where payment is only made when a reader becomes a paying customer.

We wrote more about each of these models here — and why you’d want to use (or avoid) each.

Understanding Five Different Ad Pricing Models

But as a general rule of thumb, most newsletters charge about $20 to $40 for every 1,000 readers who open their newsletter. So, for a newsletter where 1,000 readers open the email, an ad would only be worth $20 to $40. If your newsletter sees 10,000 opens per send, the ad might be worth $200 to $400. And as the newsletter audience grows, the ad could be worth more and more.

That $20-$40 estimate may also be too low for many newsletters. The more hard-to-reach the audience for your newsletter, the more valuable the ad will be. For instance, B2B newsletters can sometimes charge $75 to $150 per 1,000 opens.

What kind of ad formats work for newsletters?

There are lots of different opportunities out there, but I’ll focus on the five formats I see used most often:

Native ads

These are ads within the body of an email that utilize the voice and tone of the newsletter. The ads might include an image, a few hundred words of text, and a button linking back to the sponsor’s site. (Native ads also pair nicely with the sponsored articles or videos you might run on your site.) Some newsletters that run native ads will also include the sponsor’s logo at the top — ”Today’s newsletter is presented by…” — to give the sponsor even more promotion.

These ads work particularly well with destination newsletters, where the reading experience largely occurs within the inbox. But a caveat: Since the content is written and the ad is designed to blend in with the rest of the newsletter, it’s even more important that native ads are clearly labeled for users.

Banner ads

Banners were among the original newsletter ad formats. There’s nothing fancy here — just an image with the sponsor’s ad placed within the top, middle, or bottom of a newsletter. Sometimes, newsletters work directly with the sponsor to sell, create, and place the ad within the newsletter. Other times, these ads are served programmatically, where a newsletter uses a third-party ad tool — Broadstreet, Jeeng, LiveIntent, and Passendo are four big ad players in this space — that can automatically place an ad within a newsletter. (Sometimes, the tools themselves sell these ads. In those cases, the newsletter gets paid for every ad shown, but the rate is typically a fraction of what they could get if they worked with the advertiser directly instead of using a middleman.)

Secondary sponsorships

These ad formats, which include job boards, classifieds, or event listings, allow a newsletter to sell additional ad placements within a newsletter. These ads are typically just imageless text and may be anywhere from 25-150 words compared to a longer native ad. Many teams use these alongside native ads — there will be a native ad at the top of the newsletter and a handful of smaller ads towards the bottom.

Secondary sponsorships represent an interesting opportunity for brands who want to buy an ad but have smaller budgets since these ads are typically sold at a low, flat rate. Newsletters can also bundle multiple secondary sponsorships together in the same block. For instance, a B2B newsletter might have a job board with several featured jobs all listed in the same section. Instead of selling a single ad at a higher rate, they can sell each listing for a lower price — say, $100 each — but by running multiple listings within the section, they can maximize the revenue from that ad slot.

Sponsored sections

These are where an advertiser decides they want to be the featured sponsor for a recurring section of the newsletter, like the weather forecast or a calendar of upcoming events. Advertisers for these sections aren’t usually as interested in clicks — this is more of a branding play since they’ll be featured regularly within newsletters. As part of the ad, the advertiser might only get a logo or a link within the section.

If you’re going to have sponsored sections in your newsletter, try to sell the ads over a longer window of time. Since these ads are more about branding than clicks, running just one or two of these ads probably won’t be useful for the advertiser in terms of giving them a good return on their investment. Most sponsored sections are sold over the course of a month, quarter, or year.

Dedicated sends

These are special sends sponsored entirely by an advertiser. The upside with these is that you can typically charge much higher rates than for any other type of ad — there’s no content in the email except the ad. It’s the email equivalent of a TV infomercial.

But you need to be very cautious with these. Readers, unsurprisingly, unsubscribe from these types of emails at far higher rates than a normal newsletter. I always encourage clients to label these emails clearly — have a disclaimer at the top of the email explaining that this is promoted content — and to link to a preferences center so readers can opt-out of marketing messages like these. (Readers should easily be able to remove themselves from these dedicated sends without unsubscribing from all newsletters.)

The more targeted you can get with a dedicated send, the better. Instead of sending an email to your entire list, try sending it to a specific segment. For instance, if the advertiser wants to reach parents in your community, you may want to target just your parenting newsletter list with the ad.

What data do advertisers look for?

I think about this in two different ways: What advertisers look for when they buy the ad and what they look for after the ad runs in the newsletter.

When you first talk with the advertiser, they’ll probably ask to see a few pieces of data. This is all stuff you should add to a media kit that you can share with the advertiser:

• The size of your email list(s)
• Average open rate
• Average click-to-open rate
• Average number of clicks on an ad
• Demographic data about your readers (age, level of college education, average income levels, where they live, job title)

The data you share may vary based on the type of newsletter you have. For a newsletter like mine, advertisers care a lot about what types of jobs my readers do. That sort of information may be less important for a more general interest newsletter.

After the newsletter goes out, the advertiser may want a few other things:

• The open rate and click rate within the newsletter
• How many clicks the ad got

But one thing to note: Clicks on your newsletter may be inaccurate due to bot clicks. (I wrote more about what’s happening in this article.) Make sure to ask your advertiser to share a unique link that they can track — most advertisers use what are known as UTMs — so they can cross-reference your data against their own reporting.

Are there platforms you can use to help sell ads?

There certainly are. A tool like Who Sponsors Stuff can help you identify advertisers who like to sponsor newsletters and then provide the contact information for that advertiser so you can get in touch directly. Some email platforms, like Beehiiv, offer a built-in ad network. They sell ads on your behalf, and you can choose to accept or reject an ad for your newsletter. There are plenty of third-party ad tools you can explore as well, like Paved or Wellput.

A better question might be: Should you use these ad networks? For that, I’ll turn things over to Dan Barry, an expert in the newsletter ad space:

TLDR: Yes, if you have a broad audience or you can’t be bothered to sell. Or to backfill unsold slots.

If you’re looking for some revenue, ad networks can be a really low-effort way to get paid. Nowadays, the ads are quality too, in terms of creative and company quality.

But getting a $1.50 CPC or $4 CPM will leave a lot of potential revenue on the table (versus selling flat fee). If you’re small or have a broad audience, that delta can be digestible.

But if you have a large or quality audience, the delta of lost revenue potential will just become too much. It’s up to you to decide at what point in your growth journey the extra work of direct ad sales becomes worth it.

Many newsletters also use these ad networks to sell unsold ad inventory at the last minute. You’re not going to make as much as you would have if you sold the ad yourself, but you’re still getting some revenue for that newsletter. As Dan put it to me: “Something is better than nothing!”

Are there other tools that can help with my ad business?

Yes! A few that I like:

Sponsy — If you send multiple emails per week, it can be incredibly hard to keep track of which ads are going into which newsletters. Sponsy solves that by creating a calendar of all your newsletters and all the ads that need to run in those newsletters. It can help you collect the copy, images, and links from advertisers, build a self-serve store for advertisers to book their ads directly, and integrate with several email platforms to pull reports for your advertiser automatically. 

Glueletter — Glueletter is another data reporting tool, and it makes it easy to track clicks and engagement on your ads, and then you can share those reports with advertisers with just a few clicks. For a newsletter operator who wants that kind of data — plus lots of other newsletter reporting — Glueletter is a great option. 

Megahit —This tool scans your newsletter list to identify where your readers work. If you’re trying to reach out to a specific advertiser, you can use Megahit to figure out if you already have a reader who works there. The hardest part about selling ads is often getting your foot in the door, but Megahit makes that easier. 

Can you run an ad business alongside another revenue model?

Absolutely. Many newsletter operators use advertising as just one of their revenue streams. Newsrooms often run newsletter ads alongside a subscription, membership, or donation business. Indie newsletters can combine it with just about any revenue stream:

• Ads + books, courses, or workshops
• Ads + consulting
• Ads + events
• Ads + merch
• Ads + subscriptions, membership, or donations

Ads can be a great secondary revenue stream for a larger newsletter operation. It’s possible to have it as your sole revenue stream, but advertising can be fickle — when economic times are tough, advertisers tend to spend a lot less. Running ads alongside another revenue stream allows you to weather any potential storms and build a strong business in the long run.

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