Welcome to The Newsletter Operator!

In today’s email:

• The math behind a $1M per year newsletter business

• Google launches blue checkmarks for Gmail

• Outside-the-box media business models

• And more…

Deep Dive

The Math Behind a $1M Per Year Newsletter Business

There’s a blueprint for building a $1M+ per year newsletter business.

Many have done it but few have explained it.

That changes today.

In the next few minutes, you’ll learn what it takes to make seven figures per year from your newsletter.

Plus, the 4 most common models entrepreneurs use to get there.

Starting with…

#1 - The Hybrid Model

Here’s how the Hybrid Model works:

Send 2-3 newsletters per week

The most common sending schedule is Monday, Wednesday, and Friday.

Sell 1 sponsorship in each newsletter issue.

Newsletters that follow the hybrid model are often more niche and can command a higher sponsorship rate.

Create a low-priced course

I recommend $99-$250.

This price range is low enough to drive impulse buys. Plus, buyers don’t expect dozens of hours of content from a course at this price range.

A simple 2-4 hour long course that solves a specific problem or helps students achieve a specific outcome is ideal.

Justin Welsh’s courses are a great example to look at.

The math

At 100,000 subscribers and a 50% open rate, you can sell newsletter sponsorships for $2,500 each ($50 CPM).

If you sell 1 sponsorship in each newsletter at that rate, that’s $390,000 per year in sponsorship revenue.

If you convert 2.5% of subscribers into course buyers (2,500), that’s $625,000 in course revenue per year.

Total annual revenue = $1,015,000

#2 The Sponsorship Model

This model focuses on sending more newsletter issues and selling more sponsorships.

Here’s how it works:

Send 5 newsletters per week

Newsletters that follow this model focus on news and current events like MorningBrew, The Hustle, and Stacked Marketer.

Sell 1-3 sponsorships (aka ads) in each newsletter

Each newsletter should have a primary sponsorship slot and 1-2 secondary ad slots.

Primary sponsorships are at the top of the newsletter. They include more ad space and longer copy. The sponsor may also get their logo displayed at the top and/or an image in their ad.

Secondary ad slots are usually at the bottom or middle of the newsletter and could be just 1 bullet point of 1-2 sentences with a link.

The math

At 100,000 subscribers and a 55% open rate, you can sell primary sponsorships for $2,475 each ($45 CPM).

At the same list size and open rate, you can sell secondary sponsorships for $1,375 each ($25 CPM).

Assuming you send 5 times per week and sell 1 primary ad and 1 secondary ad in each newsletter, you’ll make $1,001,000 per year.

Total annual revenue = $1,001,000

#3 The Leadgen Model

This model is mostly used by B2B newsletters. These are newsletters/media companies that write for an audience of business leaders and professionals in a specific industry.

That could be professionals working in:

Cybersecurity, marketing, HR, healthcare, banking, retail, manufacturing, etc.

Lead generation is the lifeblood of a B2B media company.

Companies that sell to businesses in the industry you cover will pay a high price per lead. That’s because they sell to businesses, not individual people.

Businesses have much more to spend on products and services that solve their problems.

And because of that, B2B product and service providers (like enterprise software companies) have a very high customer lifetime value (CLTV).

In fact, it’s normal for an enterprise software company to have a CLTV of over $100k! This makes the value of a qualified lead for that business over $100-$300.

Here’s how it works:

Send 2 newsletters per week.

Sell 1 sponsorship in each newsletter issue.

Generate leads with post-sign-up surveys, secondary ad slots, email sequences, lead magnets, and webinars.

The math

At 70,000 subscribers and a 50% open rate, you can sell primary sponsorships for $5,250 each ($150 CPM).

At 2 sends per week, that’s $546,000 in sponsorship revenue per year.

If 5% of subscribers (3,500) convert to leads for advertisers and you sell leads for $150 each, that’s $525,000 in lead gen revenue per year.

Total annual revenue = $1,071,000

#4 Courses and Coaching Model

This model is all about using a newsletter as lead and customer generation for an online course and coaching business.

The newsletter gets the prospect’s email address and builds trust.

Then you can sell your products in the newsletter, with email marketing, with webinars, and more.

Here’s how:

Send 1 newsletter per week

Sell 1 sponsorship in each newsletter issue

Sell a $999 course to newsletter subscribers

The math

At 50,000 subscribers and a 55% open rate, you can sell newsletter sponsorships for $2,000 each ($75 CPM).

If you sell 1 sponsorship in each newsletter at the rate, that’s $104,000 per year in sponsorship revenue.

If you convert 1.8% of subscribers (1,000) into course buyers, that’s $899,100 in course revenue per year.

Total annual revenue = $1,003,100

Simple but not easy

What I outlined above is designed to show you how simple it is to reach $1M per year in revenue with a newsletter.

This doesn’t mean getting there is easy.

The CPMs, ad fill rates, conversion rates, open rates, monetization tactics, and more can vary.

However, I tried my best to pick metrics that are achievable. In fact, I believe most newsletters with 50,000 to 100,000 subscribers can make much more than the revenue numbers I shared above.

Simplifying subscriber growth

To someone just starting out, 50,000 or 100,000 subscribers feels a long way away. But maybe not as far as you think…

Let’s break down how long it takes to get there:

If you add 30 subscribers per day, you’ll reach 10,950 subscribers in one year.

Or

If you add 83 subscribers per day, you’ll reach 10,043 subscribers in just 4 months.

That’s far from 50k-100k but 10k subscribers can be enough to make a living from your newsletter and put more time and effort into your growth.

And adding 30-80 subscribers per day is very achievable for someone just starting out.

If you add 137 subscribers per day, you’ll reach 50,005 subscribers in one year.

As I showed above, 50k subscribers in the right niche, when monetized well, can be a 7 figure business.

Adding 137 subscribers per day to get there is doable with consistent posting on Twitter, LinkedIn, and a small ad budget.

If you add 275 subscribers per day, you’ll reach 100,375 subscribers in one year.

If you’re new to newsletter growth, 275 subscribers per day may feel like a lot. But once you reach 10k subscribers and start making money from your newsletter, the path to 100k is clear.