Deep Dive

How Matt Paulson Bootstrapped MarketBeat To $40M/Year and 4.3M Newsletter Subscribers

Matt Paulson is the founder and CEO of MarketBeat. He came on our podcast to break down exactly how MarketBeat:

• Is on pace for $40M in revenue this year and did ~$30M in 2023

• Grew their email list to over 4.3 million subscribers

• Spends $1M+ per month on newsletter growth

• And much more…

Matt is incredibly transparent with his numbers. This was one of the most insightful conversations I’ve had on newsletters and financial marketing.

So instead of just publishing the conversation, I’m going to share my thoughts and biggest takeaways.

Before I do…

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Okay. Let’s get into the breakdown.

Here are my biggest takeaways from MarketBeat’s growth:

How MarketBeat Makes Money 

MarketBeat primarily makes money by advertising paid newsletters or paid memberships from financial publishing companies.  

Some of MarketBeat’s biggest advertisers are MarketWise and Agora. Combined MarketWise and Agora do about $1 billion in revenue per year. 

MarketBeat mostly does performance-based advertising. Meaning they only get paid when they drive a sale for the advertiser. 

These advertisers will pay MarketBeat a $100-$250 CPA (cost per customer acquisition).

Here’s where it gets interesting:

MarketBeat is usually advertising a paid newsletter that costs $49-$99 – yet MarketBeat will get paid $100-$250 per sale.

For example, the most common price point for a paid newsletter is $79. MarketBeat will get paid a $150 CPA when they drive a sale for that product. 

Why do advertisers pay MarketBeat 150%-200% of the product price to MarketBeat as a CPA?

Simply because MarketBeat is selling “front-end” offers. The advertisers will have high-priced backend offers they upsell and cross-sell to that customer, increasing the CLTV (customer lifetime value).

It’s a win-win. MarketBeat makes more upfront from their promotion. The advertiser will make much more from the customers they get from MarketBeat over time. 

Matt says, “If they're giving me $150, they're making probably $500 on average on that transaction”.

This is essentially affiliate marketing, but better. 

Most affiliate offers pay a 25%-50% commission on sales (or less). But MarketBeat gets 150%+ commissions. 

And these “commissions” are about 90% of MarketBeats revenue.

According to Matt:

“Last year of our ~$30M million in revenue, like 90% of that was advertising and about 10% was subscriptions.”

How MarketBeat Sells Their Paid Subscription

MarketBeat has a subscription membership that I estimate does $2,400,000 in annual recurring revenue (ARR).

Matt Paulson says: “Right now about 13,000 people have a recurring MarketBeat all access subscription. The list price is $400 but we frequently sell it for $100 or $200 for the first year.”

The main way they sell subscriptions is through limited-time first-year discounts.

Matt Paulson breaks down their best conversion tactic:

“We'll do a promotion and say, ‘We applied a $300 credit to your account. It's good for a week. If you want to claim your account credit, click here to get it. Then you create the urgency and tell people your account credit is about to expire. ‘Do you want to use it or not?’ That sense of urgency really works to get sign-ups.”

Email Triggers - MarketBeat’s Best Ad Promotion Tactic 

Based on my research and our conversion with Matt, I estimated most of MarketBeat's advertising revenue comes from “email trigger” ads.

Matt breaks down how they work on our podcast:

“Where we're seeing a ton of volume is on what we call our triggered campaign system. So when we send out a newsletter, if somebody opens it, we'll send them an ad email right away because we know they're in your inbox. Those emails get like a 60% open rate.”

These email sends can also trigger based on other user actions like ad clicks, SMS message clicks, and website visits. 

Matt says, “Whenever somebody we know is active, we just send them the next offer”.

MarketBeat subscribers get these trigger email offers in a queue.  

Matt explains, “We sort the offer queue based on which ones are generating the most money in the last seven days. At any given time, we have ~200 emails in what we call our triggered campaign system and then they get sorted by performance.”

Every interaction subscribers have with MarketBeat can trigger the next offer in the queue.

Often users will be sent multiple email offers in a day based on their interactions with MarketBeat’s emails, website, and SMS messages.

For example, if you open 3 emails from MarketBeat (or one of MarketBeat's other newsletters) you’ll likely get 3 (or more) emails with an offer from MarketBeat’s advertisers.

MarketBeat varies the “sender name” so these emails don’t look like they’re all coming from the same brand or person.

Matt explains, “Sometimes [the email] is from MarketBeat, sometimes it's from the advertiser name and MarketBeat. Sometimes it might just be the name of the expert, like Porter Stansberry. When all of your emails look the same, people can become blind to them. If you vary them that tends to be a better way to go.”

How MarketBeat Grows Its Email List

MarketBeat spends over $1M per month to grow its newsletters across 22 channels.

The ad spend breakdown looks like this:

• The majority of the spend (~$800k per month) is ads in financial investing email lists and investing-specific co-registration

• ~$200k on Google and Bing ads

• ~$50k on Facebook ads

• ~$15k on SparkLoop

That’s a lot of ad spend and growth channels.

But Matt says, “It's pretty easy to manage because a lot of it is through agencies. Right now we don't even have a director of marketing. it's just me and another guy doing it.”

Organic Growth

MarketBeat gets 40k to 50k subscribers a month organically through search traffic. 

Matt told us his #1 keyword:

“We rank for a lot of stock tickers and tools. Our biggest keyword is “dividend calculator”. We get a ton of traffic just from that keyword.”

MarketBeat also ranks for many long-tail keywords that typically don’t get much volume but can rapidly grow traffic when there are big changes in the stock market: 

Matt says, “In 2021, when everyone was freaking out about GameStop and AMC, we ranked for “GameStop short interest” and “AMC short interest”. We got a ton of search traffic from stuff like that. Those are keywords you don't really think about. But then when something blows up, there we are waiting and you get a ton of traffic.”

Best Types of Lead Magnets 

The #1 way MarketBeat converts website traffic into email subscribers is with lead magnets. We asked Matt the best type of lead magnet, he explained: 

“They tend to be like Stock List. Stock lists of whatever the ‘hot thing’ is now. Last year was AI stocks. So [the leag magnet was] “7 AI Stocks To Own In 2024”.

“Then whatever the hot thing is will change. It was electric vehicles at one point, it was marijuana stocks at one point, and this year it'll be all election-based stuff.”

MarketBeat Can Turn 1 Subscriber Into 10

MarketBeat has ~7 newsletters: Early Bird Publishing, DividendStocks.com, InsiderTrades.com, CryptoBeat, and more

Matt says, “We have people that are subscribed to five or six of them and we’re trying to build this network of financial media brands.”

It’s hard to stand out in the inbox. There are millions of newsletters.

MarketBeat’s strategy to stand out is “to be 10 of 1,000,000 instead of 1 in 1,000,000”

It Takes Time To Grow

MarketBeat started its email list in 2010. What seems like fast growth now started slow and steady.

Matt says, “If you grow 30% a year and do it for a decade, you get a pretty large business.”

Invest In Your Growth 

About 90% of MarketBeat’s growth is from paid acquisition.

They add over 400,000 subscribers per month from paid ads and their average lead cost is ~$3.00.

Matt says, “Last month we spent about $1.2 million on ads to grow the MarketBeat mailing list. The lead cost will vary as low as $2 and be up to $12. What we're willing to spend per lead is dependent on how it backs out.”

Know Your Numbers

Matt knows his metrics well. He also has a clear understanding of key metrics most media founders have no clue about, like:

• Payback period 

• Return on ad spend (ROAS)

• Subscriber lifetime value (LTV)

Matt broke down many of those metrics on the podcast:

• “We're breaking even in about 90 days on our ad spend.”

• “When you exclude the fake Apple and Google opens, our true open rate is 21%. When you add fake ones back in, it's ~40%.”

• “We spent $561,000 with [After Offers] last year, 2023. That's generated 1.19 million in revenue from them so far.”

If you’re using paid ads you need to know all these metrics. 

Listen To The Full Podcast

Hope you enjoyed this breakdown!

If you liked this, you’ll love the podcast. There are many more insights from the podcast I didn’t share here.

→ Watch the full interview with Matt Paulson.

P.S. If you liked this style of content, reply and let me know. I’d love to do more interviews with founders and breakdowns like this.