Are sponsorships going to zero?

👋 Hi friends -

Welcome to The Newsletter Growth Memo. Twice a month, I share short reflections with my newsletter clients + other operators.

Zero formality, ads, or affiliate links - just a guy sharing learnings from working with media operators doing $25k-$2M+ / month with newsletters.

New reader highlights: Dylan, Founder @ Serial Sales | Nils, Founder @ Letter Leverage | Eric, Chief Brand Officer @ Trusted Media Brands

beehiiv's ad network is getting big.

You probably sell sponsorships. And beehiiv probably sells them for cheaper.

Does that help you or hurt you?

For context: They told Variety they were paying publishers $1M+ per month in ad volume as of January.

Tyler Denk just published February ad revenue was up 35%, so I imagine their network’s total volume is between $1.5-$2M per month. Big!

That’s awesome for new operators - ESP-native ad networks (beehiiv, Kit, etc.) are making blue-chip logos like HubSpot and Notion accessible to newsletters that never could have their first internet dollar alone.

But it’s a double-edged sword if they succeed at scale ($100M+ in volume, which I think beehiiv will over the next 12-18 months):

If you are big ($2-3M+): You already have deep sponsor relationships.

Your partners are obviously never going to go away, but there will be pressure on CPMs even up at the top.

This is just the open web’s history repeating itself.

The web used to run on direct sponsorships.

Then ad networks / platforms like Facebook and Google showed up.

All the publishers called them low quality inventory - they would never compete!

And look how that turned out - there are still premium publishers that do direct deals… but there are a lot fewer of them then 10 years ago.

One way to resist pricing pressure is to go multimedia so that you can offer packages people can’t get from a network, like evergreen web and social inventory (1440 Topics, Morning Brew, etc.).

Many people won’t be able to do that and that is okay.

It is very good that ESP-native ad networks are scaling to make the market more efficient.

If they outcompete you, that is on you. Don’t be mad at Tyler - there are no free lunches in life!

Many early newsletters can and should make their first $1-10k on ad networks.

But it will be much harder to scale direct ad sales.

The operators winning right now are building something to sell.

If you’re small, ironically this is actually WAY easier to do than selling ads.

There’s a guy who went through my newsletter accelerator who did $64k in sales on a 7,000-person email list in January selling digital products.

My buddy Max Sturtevant runs an agency, Well Copy, and does ~$6M/yr at 23 years old using his email list of 20,000 people to drive customers.

That’s $300/subscriber!

Sponsor-driven newsletters are incentivized to build ‘okay’ audiences.

I see way too many loading up on TrafficGrid, Sparkloop, and running Meta ads blind (not measuring reader open rate / CTR religiously).

When you sell your own product you can't hide behind open rates.

You either have people who buy things or you do not.

I'll write a full issue on what to build and how to launch, but before that here are 4 channels I consistently see lead to buyers.

The good news: By investing in these channels, your sponsor metrics get better too.

Qualified readers convert on ads. It's a good short-term outcome on the way to a much bigger one.

1/ Dream 100 outreach on LinkedIn.

Find the 100 exact people you'd most want on your list. Engage them deliberately.

There’s a good chance that’s how you got on this little email list of mine.

That’s how I got The Feed Media to $1M+ ARR in under 12 months back in 2024. I was surgical about who we were talking to from day one.

I wrote about that here.

2/ Lead magnets

Max Sturtevant built Well Copy to $600k+ a month from 20,000 subscribers posting content to Instagram and funneling people to a lead magnet.

That is his entire funnel.

You could watch the podcast we did together and replicate it for yourself.

If you prefer writing, my buddy Daniel Bustamante used the same playbook on LinkedIn and unpacked it here.

3/ Buying ads in other newsletters.

Look at who's spending on beehiiv's ad network - The Deep View, 1440, The Rundown, Workweek.

Other newsletters!

I know the revenue / growth trajectory of all of these folks and I can tell you it’s no coincidence the most successful newsletters are buying from other lists.

They understand LTV and that a subscriber acquired in the right context is worth paying for.

If you do a pilot, Chris Abraham @ beehiiv is my guy - tell him I sent you!

I make no money from this but I do get brownie points.

4/ Qualified Meta funnels.

Run a post-subscribe survey.

Ask the questions that tell you whether someone is actually your buyer.

Feed those signals (as a conversion event, not a lookalike) back to Meta and let the algorithm find more of them.

Your CPL goes up. Your revenue per subscriber generally goes up more.

I wrote an entire guide on how to do that here

That's the letter.

- Nathan