Newsletter lessons from a billionaire

👋 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 Tim Huelskamp (1440), Ryan Heafy + Ryan Johnston (6AM City), Colin Richardson (Smooth Media), and Ellen Hyslop (The Gist)

In April I joined a good buddy and mentor of mine to speak at a digital marketing / social summit at Red Ventures.

Red Ventures (RV) is a media juggernaut… for those who don’t know, RV:

Working with some of the media giants during my consulting days, RV was by far the most common “we need to be more like them” example that came up among execs.

They’re like McKinsey had a baby with Agora - top-notch strategy people with insane marketing chops.

And it shows.

They have a massive, ultra-modern campus.

On-site housing/condos.

A lake.

I remember taking a walk after we wrapped deep-dive sessions with each RV brand and seeing 2 albino squirrels scampering around.

“Shit, these are Ric’s squirrels,” I thought.

Alright, you get it - RV is cool. Let’s get to brass tacks.

I’ve got 3 reflections for you from the day:

Every SEO-driven media company is hungry for 1st party data and diversification beyond Google.

RV’s brand teams have been given a flexible mandate for how they deal with this.

Mobile apps, log-ins - there are plenty of things the teams are experimenting with.

But newsletters look like they’re going to be the crown jewel.

Broadly speaking, with big media co’s I’ve asked, newsletter subs have 3-4x the LTV of web visitors.

I think that means we’ll see more acquisitions down the road.

Keep your books clean!

Red Ventures (reportedly) makes ~30% of its revenue from 3 partners.

Crazy fact, right?

Here’s another.

Jesse Pujji (the Batman to my Robin at this social summit + guy whose company RV bought 20% of back in ‘15) doubled his profits getting rid of 50% of his customers.

Instead, he went all-in on his top logos like Uber and Dollar Shave Club (based on Ric’s advice).

See, customer concentration isn’t so bad when you prioritize long-term relationships you know you generate ROI for.

But most media brands don’t have that clarity or relationship with their advertisers.

They do no follow-up to understand their sponsor’s post-click funnel and how they compare with other brands.

Did you know newsletters are in Hubspot’s top 3 performing channels?

I bet a lot of folks here have had Hubspot sponsor their newsletter and didn’t know that.

Jesse + Ric both have companies that do a relentlessly good job of communicating.

Obsessing over the customer is never, ever a losing strategy.

If you’ve been a reader for a while you’ve heard me talk about how incorrect it is to buy subscribers on a cost-per-lead basis.

It’s the equivalent of running an e-commerce company that optimizes its ads for add-to-carts, hoping those users check out.

You need to send click events back to Meta.

That’s where the money is.

Even RV is guilty of this (for newsletters, at least - they run plenty of direct-to-offer ads to get folks to open up credit cards via their website).

For many folks, optimizing to the cheapest lead is a technical limitation of their ESP.

But that will change - when it does, the folks already thinking about this (namely the media operators we’re working with) will be at a big advantage.

Alright, before we wrap -

There are so many gold nuggets you can learn from Ric as a founder.

Jesse knows the guy way better than I do, so I’ll let him tell you more.

P.S. - Red Ventures’ origin story is fascinating. Ric nearly quit the business and survived a plane crash on his way to building one of the best ‘under the radar’ companies in the US.

That’s the letter.

- Nathan May