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Ray Bolger

Ray Bolger

Ray Bolger

Why Advertising in Newsletters Now Produces Great ROI

May 6, 2024

[Source: article originally appeared in Medium]

After years of being considered by many as a “second tier” media format, newsletters have surged lately in popularity among marketing and advertising pros.

This renaissance stems from several key factors, including advances in newsletter publishing platforms, a global pivot towards first-party data, and new programmatic advertising markets that enable highly targeted campaigns at scale.

While it’s true that the cost-per-click (CPC) in newsletter advertising may be higher than some other types of media, the quality of audience engagement they enjoy and higher returns on investment (ROI) for marketing spend make newsletters a smart choice.

Newsletter advertising campaigns on average generate an ROI of $38 for every dollar spent, according to many industry analysts — which significantly beats out social media, Google Ads, and other SEO-based strategies.

Privacy Concerns and First-Party Data

As internet users worldwide have become more privacy-conscious and government regulations such as GDPR and CCPA force the industry to turn away from third-party tracking cookies, publishers and savvy marketers are shifting their strategies accordingly.

Newsletters that require subscribers to opt-in provide a rich source of first-party data — direct input from subscribers about their demographic details, job titles, professional affiliations, personal preferences, and behaviors. This is a great source of information to help creators shape their content, and for advertisers seeking to refine customer targeting and personalize their messages, to resonate deeply with specific audience segments.

Technological Innovations

Platforms like Beehiiv, Paved, and Substack are at the forefront of innovating newsletter publishing, providing robust platforms that allow creators to focus on content creation, without getting bogged down by backend technical details.

These new platforms handle everything from layout design to advertising sales and subscriber acquisition. By simplifying these operational challenges, they reduce barriers to entry for creators to launch and scale their publications efficiently, and have contributing bigly to the current newsletter industry revival.

The best platforms today provide intuitive tools for design, distribution, and analytics, along with built-in capabilities for monetization such as paid subscriptions and integrated advertising networks. They also facilitate deeper connections with audiences through enhanced interactivity features, enabling newsletters to encourage engaged communities.

Subscriber Engagement and Monetization

The direct relationship between newsletter creators and their subscribers offers excellent advertising opportunities. Platforms are increasingly incorporating features like polls and surveys directly into newsletters, not only to engage readers but also to gather additional first-party data that supports intelligent content and advertising strategies. And, engaged subscribers are more likely to accept calls to action — whether they’re promotional or informational.

Subscribers who opt-in to receive newsletters are typically more interested and committed to the content they deliberately choose to receive, as opposed to what they stumble upon while searching or surfing. This translates into higher attention levels and open rates, making clicks more valuable due to the overall quality of interactions. Plus, your content or ad is pushed straight to an inbox, reducing the screening layers between your message and your target audience.

Leveraging AI for Precision and Security

The advent of AI-driven programmatic advertising platforms like my own company has further enhanced the power of newsletter advertising. Such platforms use sophisticated algorithms to analyze vast amounts of data, ensuring that ads are shown only to the most relevant audiences.

Importantly, leading programmatic newsletter ad platforms are able to identify and disregard clicks from bots, ensuring that advertisers pay only for legitimate human interactions. This not only optimizes campaign budgets but also provides a clearer picture of campaign effectiveness.

Emerging technologies in AI have also revolutionized how campaigns are optimized in real-time. AI can predict subscriber behavior, adjust campaigns according to performance data, and even personalize content at an individual level. These capabilities significantly increase the potential ROI of newsletter advertisements by maximizing relevance and impact for every ad delivered.

Click Bots Versus Validated Clicks

The integration of AI into programmatic platforms has been pivotal in combating one of digital marketing’s persistent challenges — click fraud. AI algorithms are now capable of distinguishing between genuine human clicks and those generated by bots. By eliminating fraudulent clicks, advertisers ensure that their marketing spend goes toward reaching real people, which leads to more accurate metrics and ultimately, a higher ROI.

While the higher CPC for newsletter ads might initially seem imbalanced, the benefits of engaging a dedicated, well-profiled audience can far outweigh the costs. With the enhanced capabilities provided by AI and programmatic advertising technologies, marketers can enjoy unprecedented precision in targeting and genuine interaction, making newsletters a potent tool in any marketer’s kit. This combination of engaged subscribers, rich first-party data, and cutting-edge technology makes advertising in newsletters a strategically smart decision.

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