👋 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 $25-500k+ / month with newsletters.
New reader highlights: Welcome to Alex Pattis (Last Money In), Francis Zierer (Creator Spotlight), EJ (beehiiv), and Sean Devlin (Nice News)
If you’re running paid ads for your newsletter - do you turn an ad on or off mostly based on its CPL?
If you do, it might be a big problem.
See, everyone on newsletter Twitter talks about cost per lead as the holy grail of paid marketing success.
But CPL as a success metric sucks for sponsor-monetized newsletters. Here’s why:
Imagine this - your friend running an e-commerce company comes up to you.
He’s super excited… there’s been amazing news.
“We’ve been running ads on Meta and have our add-to-cart cost down to just $5!”
That’s cool! I think. But a little odd, no?
I mean, what does an add-to-cart do for your friend until the visitor buys his aluminum-free Peruvian hand soap?
The answer is not a damn thing!
And a lead hasn’t done anything for your sponsor-monetized newsletter until they start opening and clicking.
So E-commerce companies track cost per purchase (CPP).
And newsletter companies track…. what exactly?
There’s not really a great metric out there today.
Maybe you’re looking at your analytics and turning off ads with flagrantly low open or click rates.
But even ads that look strong at first can lead to bad paid media decisions:
In May, The Feed Media competed side-by-side against another agency in the ad account of one of the top AI newsletters.
That agency came in with lead magnets at lower CPLs than we did (which looked great at first + scared your buddy Nate).
We responded by testing lead magnets of our own, which drove a similar CPL to the other guys but significantly higher engagement.
We won the account and decided to keep testing lead magnets to see if they would make sense long-term.
Well, 8 weeks later it turns out that 20% of the lead magnets are really good.
Problem #1 is the other 80% (which looked amazing at first) had a much faster decay in open rate and CTR as those reader cohorts became older.
Problem #2 is that even if you were eyeballing their engagement today, it’s not 100% clear if they should be turned on or off.
There’s too much to look at - you need one metric that takes into account:
Cost per lead
Click-through-rate
Unsubscribe rate
I call that metric a ‘click score’ and we look at a snapshot of it 30 and 90 days into an ad running to make sure that winning ads still hold up.
I show you exactly how to use it (including where to grab the data) and an example using the lead magnet ads we ran below.
That’s the letter.
- Nathan May
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