👋 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 Alana, Senior Director of Audience Development @Dotdash Meredith | Jon, former CEO @Ampush | Elizabeth, VP of Sales @1440 | Louis, Co-founder @Sparkloop
I want to talk to you about why $100M+ companies (outside of media, too) should care more about newsletters.
From 2020-22 I spent a large portion of my time at The Boston Consulting Group working with media companies and private equity firms investing in media/ad-tech.
This was the height-panic era around what Google would do with 3P cookies.
If you don’t know much about 3P cookies, they’re effectively what powers personalized advertising across the web (e.g., you visit Banana Republic and later see a BP ad on the New York Times website).
And they make web publishers a ton of money.
One day Google announced it was getting rid of cookies.
Yikes!
The industry rushed to find ways to protect what could amount to 20-30% of some publishers’ revenue.
And then earlier this year Google more or less said “Ha, kidding, we’ll keep em”.
And that’s great - obviously, this is a win for publishers.
The point I’m making is this was such a watershed moment because many publishers have built their traffic sources and monetization on rented land.
SEO is rented and this year Google decided its AI search results were more valuable real estate than you are.
Programmatic advertising like Adsense is rented, too - you take the RPMs you get.
You’ve been renting an apartment smack dab in the center of Venice and the water level is rising, folks!
Enter newsletters.
They are the #1 way to own your audience + monetization funnel.
And it’s never been easier to create/scale them.
Back in the days of Morning Brew you needed 2 engineers and an ops person just to get a newsletter off the ground that allowed you to design/write/edit/send.
Platforms like beehiiv handle all of the above plus referrals, paid acquisition analytics, automation, etc. all in one place.
And the monetization? Much better than web-based media.
In April I went with my buddy Jesse to do a summit at Red Ventures for his mentor & RV’s founder, Ric Elias.
We sat down with each of their teams across brands like Bankrate and The Points Guy.
One takeaway (further confirmed by our other media hold-co conversations): Newsletter subscribers are easily 3-4x the LTV of web visitors.
In fact, the monetization can be so good that many product companies are deciding to become media companies.
Hubspot purchased The Hustle in ‘21 and Mindstream in Oct ‘24.
Robinhood acquired Chartr and Snacks under its Sherwood Media brand
JP Morgan acquired The Infatuation to support its credit card business
These brands see the trust that a newsletter builds.
And they want that to be the front end for their own products.
I call this the “Media mullet”.
Simple, free (but ad-supported) newsletter in the front as your 1P data magnet
A network of high-LTV products or services in the back
Media companies are growing out their mullet, too.
Software + events: Jason Yanowitz’s Blockworks is doing over $10M from its events business (Permissionless / DAS) and has launched digital asset analytics software for financial institutions
Communities: Workweek hit $12M in revenue, 50% of which comes from communities for professionals across niches like healthcare / HR
Niche premium content: Axios launched a $1,000 annual membership behind its Communicators newsletter and has seen a 1-2% conversion rate
So to-recap:
For media companies addicted to search traffic, newsletters are one of the most practical ways to build 1st party data
Media companies (largely, but not exclusively B2B) are building out a back-end of high LTV products + services
Industries outside of media are realizing they already have the high LTV back-end and should just purchase the distribution
You can pay a BCG / Bain / McKinsey half a million dollars for a fancy strategy deck.
But, really, it should just say two things - media mullet :)
That’s the letter.
- Nathan May
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