Newsletter Advertising 101: A Brand’s Guide to Newsletter Ads

As main advertising channels like search are getting expensive - many brands are looking for more efficient ways to reach new customers. In this fray, newsletters are emerging as the silver bullet that helps build a brand and convert leads at efficient costs.

Newsletter advertising is not like a public banner ad where you pay for a space and then cross your fingers hoping for a result. The difference in the ad space is simple: it's targeted and trusted. When you get a billboard, you're putting yourself out to be discovered by people who might be interested in your product, however with a newsletter advertising campaign, you pick a targeted audience who is more likely to show interest in your service.

The total number of email users worldwide is approximately 4.5 billion in 2024 and this number will only grow. Having newsletter adverts in your marketing strategy is a great way to get an unfiltered entry point to your customers. So, let's understand newsletter sponsorships a little more.

What is email newsletter advertising?

Imagine this: you're scrolling through your inbox, and amidst tons of emails, you spot one from your favourite media publication.

You open it eagerly to catch up on the latest news and insights, but wait... what’s this? A sleek banner ad promoting a new product. A product you may have heard of before but disregarded is promoted by the team that you trust for your news and life tips. Could this be worth checking the product out?

That is email newsletter ads in action.

Sometimes, you'll come across terms such as email marketing and email advertising. You'll think 'advertising, marketing? that's the same thing.' Unfortunately, no. Both the terms have their own meanings and cannot be used interchangeably. Let us explain

Email Marketing:

This is when the brand builds its own list of subscribers to communicate with its customers. It usually acts as a lead magnet where the customer has to opt to be part of the newsletter, receive promotional emails etc. With email marketing, the aim is to have access to the customers and  keep them in the loop with the latest news

Email Advertising:

With email marketing, you're only reaching out to users who have either shown interest in your product or have previously been customers. But, when it comes to attracting a new audience and reaching your target audience, email adverts play an important role.

Email advertising is when brands pay newsletter publishers to place ads in their emails. Through this, the brand gets visibility in front of a new bunch of customers. But once the campaign ends, they can no longer access those subscribers (unless you pay for the ad placement again).

Newsletter sponsorships involve partnering with creators and media companies that run a newsletter to place promotional content and reach their newsletter’s audience.

How effective are newsletter adverts?

60% of consumers prefer to be contacted by brands through email. This frequency is likely expected to remain as 81% of Gen-Z check their emails at least once a day.

Newsletter audiences are a carefully crafted group of people who share similar interests and values - they have literally opted in to receive updates from the newsletter. Having ad placements in newsletters is like landing straight in the inbox of subscribers who are in the market for your product.

Newsletter ads also present a cost-effective opportunity for marketers, with a CPC of $2.00, making them significantly cheaper than some other popular advertising platforms. For instance, Instagram ads, despite their wide reach, come at a higher CPC of $3.56, and LinkedIn ads are even more expensive at $5.26 per click. This cost efficiency, combined with the targeted nature of newsletter audiences—who have opted in due to shared interests and values—makes newsletter ads an irresistible choice.

Unlike the noisy world of social media where your message can get shuffled, lost and buried in the algorithm, a text ad in email newsletters is the best way to reach new leads.

Don't trust words? Trust the statistics. 60% of consumers say they’ve made a purchase after reading a text ad in the email they received.

Benefits of Email Newsletter Advertising

Now that we know they’re effective, let’s check in on some of the main advantages of newsletter ads:

1. Cut through the noise: With traditional ad placements, you target a set of users based on their activities on the platform and end up in their feed based on where the algorithm puts you. With newsletter adverts, you land directly in the inbox of users who have a high chance of becoming your customers.

2. Engaged Audience: These newsletter subscribers are people who have willingly signed up to receive these emails. They are avid readers and show interest in the topic thus are more receptive to engaging with the newsletter ads.

3. Higher Returns: By going direct to a targeted and engaged audience, businesses are able to reach a niche audience with higher intent. In fact, 41% of officials identified newsletter advert to be their most effective marketing channel as compared to traditional channels. This makes newsletters a great pick for B2B companies selling more advanced products.

Cracking the Code of Newsletter Ads: Understanding Costs and Earnings

Now, let’s talk money: how much does it cost to get in on the newsletter advertising action? Well, it varies.

Some publishers charge a flat fee for ad placement, while others operate on a pay-per-click (PPC) or pay-per-impression (PPI) basis.

• Flat Fee: This is a flat rate for working with the newsletter publisher. Both parties agree, and your ad gets a placement in their newsletter for a specified period.
• CPC (Cost per Click): With CPC, you only pay when someone clicks on your ad. It’s like a personal assistant who charges you based on the number of tasks they complete for you—fair and square!
• CPM : CPM is all about visibility. You pay a certain amount for every thousand times your ad is displayed to subscribers.

How much should you pay for a newsletter ad?

The cost of a newsletter ad varies depending on factors such as the size of the publisher's audience, engagement metrics such as open rates and click-through rates, and ad placement type. Some publishers may charge a flat fee, while others can charge based on clicks or impressions. Let's understand some jargon to better understand an ad placement's costing:

What is CPC?

CPC stands for cost-per-click, where advertisers pay each time a user clicks on their ad. It is a performance-based pricing model commonly used in newsletter advertising.

With flat rates, the brand has to pay the publisher no matter how the ad performs, but with CPC, the brand pays based on the click rate on their ad.

How to calculate CPC for a newsletter advert?

A good newsletter CPC rate can vary from $1 to $6. To set a reasonable CPC rate, you should know two metrics

• Total number of people in the publisher's subscriber list
• Average click-through rate (number of people clicking on the links mentioned in the email)

For example, if a person has 10,000 people on the list and an average of 3% click rate. That means you can expect 300 newsletter subscribers to click on your ad.

If the cost of your ad is $1500, your CPC would be 2000/300 = $5

Now you know how to calculate the estimated cost per click of a newsletter!

What is CPM?

CPM refers to the cost per thousand impressions and is another common pricing model in newsletter advertising. It represents the cost advertisers pay for every thousand times their ad is seen by a user. Newsletters and media channels with hundreds of thousands of impressions often charge CPM rates as it is a more effective way to pay for advertising. Gauging the value of 1 impression is quite binary nor statistically significant - but valuing 1,000 impressions is more plausible. Hence: CPM.

What is a good newsletter CPM?

The key point to remember when considering a newsletter sponsorship is that CPM does not equate to performance. It includes all possible ad views and the potential frequency of your ad delivery. Therefore, metrics like open rate and click-through rate are crucial for evaluating the real effectiveness and cost of sponsorships.

According to the article by Influencer Marketing Hub, ad rates over $30 CPM are probably not worth it. The average CPM rate is usually between $15 and $30.

How do you calculate a newsletter CPM?

To calculate the CPM of a potential newsletter ad, you need to know the audience size of the newsletter and open rate.

Say a newsletter has 20,000 subscribers with a 50% open rate and is charging $200 for an ad. Your CPM would be:

20,000 x 50% = 10,000 impressions / 1000 = 10k impressions

$200 / 10k = $20 CPM

Different methods for advertising in newsletters

Within a newsletter itself, you can have various placements.  Newsletter advertising offers multiple methods for brands to promote their products or services, such as:

• Banner ads: Ads that are placed in the hero section of the email. They are the first thing that the reader sees as soon as they open the email. It goes without saying, these types of placements are usually more expensive.
• Text ads: As the name suggests, these are text only ad copy with attached hyperlinks. No ad creatives are associated with text ads. This sponsored content is usually cheaper and incorporated in the middle of the email.
• Native ads: To make the promotional content align with the email, native ads come into play. These ads match the rest of the newsletter, integrating seamlessly into the content.
• Dedicated Email: All the above adverts are promotional content placed within the newsletter. However, the newsletter publishers can also write an email that is all about your service. While having a section in the ad space can bring in new leads, having an entire email about your product increases your brand awareness and reaches a larger newsletter audience.

What are some metrics to evaluate a Newsletter’s quality?

One of the additional advantages of newsletters is that they provide great branding power. Therefore it’s good to check the quality of the newsletter before sponsoring. When evaluating the quality of a newsletter you should consider the quality of the content and the quality of the subscribers of a newsletter. This will give you the best indication of how much results you can expect.

To measure the quality of content you should look at the open rate. This tells you if most subscribers are reading each week - which is a great signal for how well-regarded the publication is by its subscribers.

Referring to an industry report from Mailchimp, researchers found that an open rate above 10% is usually considered above average. When contacting newsletters, you should look for an:

• Open rate between 25% and 40%
• Click-through rate (CTR) between 2% and 5%
• Unsubscribes around or under 0.1%

59% of digital marketers admit that email is more than twice as effective at lead generation than channels like paid social media and search advertising.

To measure the quality of subscribers you should look at the engagement rate and distribution of subscribers. If the click-through rates are high, it means that the people open the newsletter are actually engaging with the content.

Important tip: Make sure to pay attention if it is a general CTR or ad CTR. Often times newsletters may overstate how many clicks you’ll get by stating the total clicks the email gets - rather than the ads in the email. This should help you manage your expectations of click.

In addition to CTR - you should also assess the subscriber base. If you know you are looking for affluent people for an investment product - you’d likely prefer to have them be Americans working in white-collar jobs.

In general, subscribers from certain countries like the US are worth more than subscribers in countries like India due to purchasing power discrepancies. This should impact the CPM or CPC you are willing to pay

Must remember practised for newsletter ads

To maximize the effectiveness of your newsletter ads, you need to make sure of certain practices.

1. Target your ads to relevant audiences: Each newsletter has an industry they cater to - be it fashion, healthcare or technology. While choosing to newsletter advertising, make sure to opt for a newsletter publisher whose ideas align with your vision. You can even ask the published if they segment their lists further, for example, a person running a tech newsletter can break down their email list into people who are interested in knowing about AI or the latest software. This helps you in further segmenting your target audience.
2. Design quality matters: Most people read emails on a mobile device, keep this in mind when creating any visuals for your ad. Make the most of the ad space you are given by writing a crisp ad copy and removing any unnecessary text that takes up space. You only have a couple of seconds to grab the reader's attention, make sure to grasp the moment.
3. Direct users to a single page: It can either be a landing page of your website or a page for a specific offering. Double-check the links you want to redirect the users to For example, if you're promoting a new product, make sure to redirect the users to the product page to cut the hassle of the user discovering it themselves.

In conclusion, newsletter advertising presents a valuable opportunity for brands to reach engaged audiences, drive traffic, and achieve their desired marketing objectives.

Are you looking to do newsletter advertising? Then you’ll definitely want to check out Passionfroot which helps you achieve industry-leading returns in 90% less time.

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