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You want to sell ads in your newsletter. But you have no idea how to price them.
I feel you.
That was me 14 months ago. I sold my first newsletter ad for a whopping $25. 8 months later, I started making $1k/month in newsletter ad revenue. I share this not to brag, but to show you what’s possible.
Newsletter advertising has become more and more common.
It’s a recent phenomenon that little guys like us could promote a brand in our newsletters — and actually get paid for it.
But there’s a problem: we don’t know how to set our ad rates because we don’t know…
Like everything, there’s nuance in newsletter ad rates. Just because someone got $250 for a newsletter ad to their list of 1,000 subscribers doesn’t mean you will, and vice versa.
Sites like Sponsorgap.com share who is advertising where. But you’re still left guessing what brands are paying. And you won’t know — until you start experimenting.
The 4 strategies I’m going to cover below aren’t an exhaustive list of ad pricing strategies. But I hope they’ll give you some ideas about ad pricing and how you can start making the ad dollars rain down.
tl;dr — I’m going to cover the following ad pricing strategies, their standard rates (if any), and which rate is best for you:
Pricing with CPMs is big media stuff.
Newsletters and other media channels with hundreds of thousands of impressions often charge with CPM rates.
CPM = Cost Per Thousand Impressions
They do it because it’s easy, it’s comparable, and makes assumptions:
So it makes sense for a big newsletters like The Hustle, theSkimm, Morning Brew (etc) with millions of subscribers to charge at a CPM rate.
¹The higher the open rate, the higher CPM rate you can charge.
According to this article by Influencer Marketing Hub:
ad rates over $30 CPM are probably not worth it.
I’ve read other articles suggesting newsletter CPM ad rates should be between $50–75. Here’s what it looks like if The Hustle — with over 2M subscribers — would charge at $30 CPM:
(2,000,000/1,000) x $30 CPM = $60,000 ad
(Calculation: [Total Subscribers/1,000] x $CPM = Cost of Ad)
But what does it look like for a smaller list like mine with Growth Currency⚡? Rounding to the nearest hundred:
(2,400/1,000) x $30 CPM = $72 ad
Not really worth the hassle for me. More importantly, I’d be under-pricing myself.
Why? Supply & demand:
I was consistently selling out my ads at $100 for a premium, top-of-newsletter ad spot when I had ~1,400 subscribers. So I increased the rate to $125. I continued to sell out. If I was charging CPM back then, it would have been $104 CPM — “probably not worth it” for my advertisers.
The cop-out answer: maybe, and it depends.
A lot of it is perception: advertisers might see $104 CPM and run in the other direction. While others would have no problem paying a $100–125 flat rate for my newsletter ad spot with 1,400 subs.
On the other hand, it’s more appealing for an advertiser to read “Ad rates start at $30 CPM” instead of “Ad rates start at $60,000”.
Chances are, most newsletter publishers reading this will use one of the following ad pricing strategies first, like Flat Rate.
For more on CPM ad strategy, check out this article by Paved.
Flat rates are easy: one price per ad insertion.
A flat rate is simply the price to place an ad in your newsletter. No calculators required to figure out actual ad cost.
The pros are all in the simplicity. An advertiser doesn’t have to do math to figure out your ad rate.
The cons are when the advertiser wants to quickly compare your flat rate with another. Most advertisers are quick to check:
This gets hard when advertisers have to compare different ad rates, different list sizes, and different open rates. So basically… always!
A CPM rate accounts for that: Advertisers will still have to do math to figure out total ad cost using CPM — but they can quickly compare prices from one newsletter to another.
But CPM doesn’t tell the whole story. Open rate is needed to figure out how much you’re really paying per impression. In the CPM rate example, Newsletter A looked like the better deal.
But what if Newsletter B has a better open rate?
Despite having a list 1/4 the size, Newsletter B’s open rates are much better. And as an advertiser, you’re paying less per open.
That’s the problem with flat rates: there isn’t a standard.
Here’s how I figured it out:
After all, the price someone is willing to pay to reach your newsletter audience is the market rate for your ads.
At the beginning? Probably.
Keep in mind, a newsletter under 1,000 subscribers could struggle to get more than $50 for an ad spot.
But you can differentiate yourself from other advertisers with similar sized newsletters and similar flat rates by increasing the value of your ads by…
While some publishers have been growing their lists for a while and can command a higher Flat Rate for their ads, many are still working to get to their first 1,000 subscribers.
Which leads us to the next ad monetization strategy.
CPC clearly works. It’s how Google’s made billions for decades.
Yes that was with search ads, but same concept.
And it’s become more and more popular amongst newsletter publishers & advertisers alike — for good reason…
Because there’s a big-ass elephant in the room with CPM & Flat Rate models: the newsletter gets paid regardless of ad performance.
But with a CPC model, the advertiser only pays for clicks on their ad.
It’s great for advertisers as they don’t have to worry about open rates or list sizes (but they *should* budget accordingly when buying a CPC ad in a larger newsletter).
And it reduces newsletter publishers’ anxiety about ad performance: you won’t sweat an under-performing ad. Once the reader clicks, the newsletter has done its job. If there’s no conversion on the advertiser’s end, that’s their problem.
But there is still a huge issue with CPC…
One of the biggest issues is verified clicks. Not all clicks are created equal, and a shady newsletter publisher could game the system, setting up fake accounts that click on hundreds of links. It’s less likely, but still possible.
According to this Paved article, CPC rates can vary from $1 to $5 — and if you find someone paying $5 for a click, send ’em my way please and thanks.
Unfortunately, you’re not likely to get a $5 CPC — or too close to it.
With CPC rates, you can do a little backwards math:
What’s that worth to your advertiser?
→ Are they selling a high-priced product?
→ Are they trying to acquire new subscribers?
→ Are they selling a monthly membership?
The more you know, the more you can negotiate the optimal rate.
For most newsletter starting out, this could be one of the quickest paths to monetization.
Especially if you’re a skilled copywriter who can coax clicks out of your readers. And if you’re willing to do some backwards math, you could make even more money.
It’s low risk for both parties.
Remember — there can be some sleazy tactics used with CPC. Be ready to prove & verify your clicks. If you can’t, you should consider a different ad pricing model.
For a verified Programmatic (CPC) Ad Network, check out Paved’s Ad Network.
You’re probably already familiar with affiliate marketing & sales.
Well, in the context of newsletters, affiliate ads are the same… but different.
The newsletter publisher optimizes for ad clicks — much like the CPC model, but only gets paid when a conversion (or sale) happens on the advertiser’s end.
The risk is now flipped all on the newsletter publisher: your ad spot has no guarantee of bringing in revenue. The advertiser gets the benefit of impressions (brand awareness), ANd they only pay the newsletter if the click converts to a sale.
They only make money if you do.
You only make money if they do.
But neither of you may make anything.
That’s not to say you shouldn’t try this strategy, but understand what you’re getting into.
The amount of leverage you have as a newsletter publisher (size of captive audience) *should* help you negotiate a higher affiliate rate.
As mentioned, the advertiser is also benefitting from getting their brand in front of your audience, even if that audience doesn’t buy. Brand awareness accounts for something.
It’s also worth considering the ticket size of the product advertised: 20% of a $500 course is a lot more than 20% of a $49 eBook. You’d have to drive 10x eBook sales compared to ONE course sale.
Ultimately, it comes down to what both parties are comfortable with and agree to.
Smaller newsletters who may struggle with CPM or Flat Rate ads — because their audience size isn’t where it needs to be — could find affiliate rates as the most lucrative option.
If you have a small-but-hyper-niche newsletter, you could make more money with an affiliate ad strategy if you partner with the right brand or business.
CPC or CPM? Flat Rate or Affiliate?
The answer is boring: it depends!
Try different strategies until you find something that works for you — and for your advertisers. It could be a blend of each, or maybe something entirely different.
And remember: you can always pivot.
The strategy you choose today will likely be different than the one you’re using in 6–12 months from now. But always be open to trying something new — especially if what you’re doing isn’t working.
What ad strategy have you experimented with the most? And did it work? Let me know in the comments!
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