This guide is designed to help customers considering third party email newsletter sponsorship as an acquisition channel.
Here are the main factors that influence email ad costs.
Whilst the number of subscribers is obviously a key factor, it is definitely not the most important metric. A newsletter can have 500,000 subscribers but less than 5% open rate, which indicates very little audience engagement. As a result number of subscribers is meaningless without open rate and click-through rate.
Note: in general more formal advertising rate cards and media packs start on list sizes of at least 10,000 subscribers.
2. Open Rate
Open rate is a good proxy for how well engaged an audience is. A good email open rate is 25% and average around 20%. An open rate of below 20% indicates the community and audience is disengaged.
|HubSpot||All (Cross Industry)||32%|
|Mailchimp||All (Cross Industry)||20.81%|
|Mailchimp||Information Tech & Services||38%|
|Mailchimp||Business & Finance||20.47%|
|GetResponse||All (Cross Industry)||24.82%|
Ensure you understand the average open rates for your industry before considering email sponsorship.
3. Click Through Rate
Just like open rates, click-through rate (CTR) numbers vary based on the industry. As a sponsor aim for lists with a CTR higher than 7%. Below 5% again indicates a disengaged audience.
|Mailchimp||All (Cross Industry)||2.43%|
|Mailchimp||Business & Finance||2.59%|
In general the more specific a newsletters audience, the more the owner can charge. Sponsorship costs increase with a more niche audience e.g. Business Subscribers -> Technology Subscribers -> IT Security Subscribers. Factors that influence ad costs include:
- B2C v B2B
Additional questions to consider:
- Is this a niche newsletter targeting a niche email audience?
- Is this a popular niche?
- Is there a lot of competition within this niche and audience?
5. Dedicated v Sponsored
Advertising to a newsletter audience generally falls into one of three categories:
- Dedicated Email
- Single Sponsored Email
- Multiple Sponsored Emails
Dedicated email sponsorship is where the email is entirely dedicated to your message. The sponsor effectively “rents” the audience. Dedicated emails are (for obvious reasons) more expensive than sponsored emails. A sponsored email features a small ad (or ads) within your own newsletter content. Exclusive sponsorships with just one sponsor will likely cost more than sitting alongside 2 or more other advertisers.
Regardless of the option you choose, have a sample article (dedicated) or ad copy (sponsored) ready for the newsletter owner.
6. Ad Format
High quality email newsletters tend to opt for more organic sponsorship formats, where the content is part of the original content as opposed to inserting large banner ads within the content. Most people don’t mind advertisements when they are valuable and non-intrusive.
Ensuring your sponsorship feels like part of the existing newsletter format, and that it adds value to readers, is (generally) best for everyone. Consider potential ad formats:
- Text-only Ad
- Traditional Banner Ad
- Image-Based Ad
- Rich Media Ad (e.g. video)
7. Ad Location
If an email newsletter places your ad at the very bottom this ad would likely see much lower click rates than a layout that positions the ad in the middle of the content. As an advertiser you should consider:
- Will you have a paragraph or ad at the top of the newsletter?
- Will it be at the bottom of the email?
- Will it be written in bold, or in a different color?
- How many links will be included within the newsletter? *
* Always use UTM codes for tracking clicks. This will help you measure the effectiveness of the campaign without having to rely on stats sent to you by the newsletter owner.
8. Sponsorship Length
Larger lists may required sponsorship deals over a longer period of time, rather than a one-off email send. It is generally recommended to sponsor at least 2 or 3 email sends or “editions”.
Whilst smaller newsletters tend to negotiate and sell ads for a flat-fee, sponsorship of lists with hundreds of thousands, or millions of subscribers is typically calculated on a cost per thousand subscribers (or “CPM”) basis. CPM is a way of measuring advertising rates on an even level, even when newsletters have a vastly different numbers of subscribers. It does not take into account open rates or newsletter niche/quality.
CPM is calculated by dividing the amount charged for an email send by the number of subscribers, and then multiplying that number 1,000.
CPM = (Cost of Email Send / Email Subscribers) x 1,000
- (£50 / 10,000) x 1000 = £5 CPM
- (£1000 / 100,000) x 1000 = £10 CPM
- (£5000 / 100,000 x 1000) = £50 CPM
- (£5,000 / 50,000 x 1000) = £100 CPM
Whilst CPMs can vary widely, between £20 and £50 is realistic for most email ads. For newsletters in which there are multiple sponsors, CPM can fall as low as £5. At the high end premium newsletters can charge between £50+ CPM though you want to see a niche audience with high open and click-through rates.
“We’ve found that they generally like to keep their dedicated campaigns under $30 CPM. If you’re aiming higher than that number, you should have a very niche audience or very high open and click rates.”Paved.com
Visible CPM (also known as Effective CPM) has gained traction in recent years across all aspects of display advertising but is particularly relevant when it comes to selling email ad units. Visible CPM is based on the number of subscribers that actually open the email though tends to be used as a benchmark for campaign performance, rather than when negotiating ad costs.
- You pay $1,000 to include a 468×60 banner ad in an email to 250,000 subscribers. The CPM is: £1,000 / 250 = £4.00
- Only 20% of the subscribers (50,000) actually open the email (an open rate that is about average). Effective CPM paid for actual views of that ad becomes: £1,000 / 50 = £20.00
When paying for ads based on the CPM model ensure you understand the difference between CPM and vCPM.
Larger newsletters often provide media packs for sponsors. Here are some cyber security sponsor pack examples:
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