Newsletter monetization techniques with Louis Nicholls


In this episode, Louis shares how to effectively monetize and scale your newsletter business. He also talks about diversifying revenue streams beyond ads and subscriptions, calculating lifetime subscriber value, and aggressive paid acquisition tactics used by the largest newsletters.

Key Timestamps

00:27 – Intro to Louis Nicholls and Spark Loop

02:45 – Louis talks about the payback period and subscriber lifetime value and how they interplay.

06:51 – What are some common ways to decrease the payback period?

11:44 – The 2×2 matrix for revenue streams

13:12 – How do huge subscriber lists under-monetize?

16:30 – Would you encourage having both donations and subscriptions?

19:57 – How do you categorize different revenue streams?

23:08 – The difference between donations and tips vs subscriptions?

25:14 – Intermission questions

28:41 – What are some products or services newsletter operators sell that you’ve seen really take off?

37:04 – Do you think publishers should diversify into more products/services?

41:41 – How would you monetize the top 1% of a publisher’s audience?

45:50 – How is newsletter advertising different from website advertising?

47:18 – Best practices for optimizing and getting more revenue

Show Notes



Chiz Media

James Clear




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Louis Nicholls – Twitter



Lesley Sim Twitter

Lesley Sim Website

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If you’re a news or media publication running on WordPress, check out Newsletter Glue. It cuts your newsletter publishing time in half, and enables you to manage your entire newsletter ops in WordPress. Go to to learn more. Welcome to Sticky, the podcast that helps you build a must-subscribe, must-read newsletter through actionable case studies and playbooks. Today’s guest is Louis Nicholls. Louis is the co-founder of Sparkloop.


Sparkloop has a suite of tools to help you grow your newsletter, including email referral and giveaway tools. Prior to Sparkloop, from what I could uncover from the depths of the internet, Louis used to focus on sales, and I vaguely remember a while back him talking about being a swim coach as well. But right now, he focuses all his time on Sparkloop, and I’ve been watching Sparkloop from the sidelines since it started, and it’s been super impressive to see the company grow.


I can’t wait to have Louis on today, not to talk about growth, which I know he can do for hours on end, but on newsletter monetization. So with that said, hey Louis, so glad to have you on the podcast. Thanks so much. It’s great to be here. Excited to nerd out about newsletters and monetization and all that fun stuff. Awesome. And did I get the swim coach thing right? Or was I remembering wrong? Yes. I had a very brief…


stint after high school before college where I didn’t know what I wanted to do. And I used to be a, not quite a pro swimmer, just not quite good enough to be a pro. And so when you’re not quite good enough, you turn to the next best thing, which is you get out to the pool and you start shouting at people in the pool. So I did almost a year of coaching and worked with some people who no longer are famous because swimming is such a short lifespan. So it’s about 10 years ago, but there were some, some Olympians in there. Oh, nice.


I used to be a swimmer as well, like a school national level swimmer. So probably a lower level than you. But yeah, I used to do breaststroke and I had the same kind of like, I don’t know what I want to do and was briefly a swim coach as well. Like I think I only lasted a couple of months. Well, very cool. Yeah. I was, I was just under a year, but I definitely knew what I didn’t want to do was breaststroke. I was terrible at that. My legs didn’t work in that way. And I always thought of.


I think most swimmers think of breaststroke swimmers as the weird ones because they work in a different way to all the others. So we’re slightly afraid of you. All right, so let’s move into the main part of today’s episode, which is newsletter monetization. So I watched your masterclass on Spark Loop. Listeners can find that on YouTube if you just search SparkLoop and monetization, I’m pretty sure it’ll pop up.


and I was really excited to talk to you about it. I really liked the presentation and kind of the way that you broke down monetization. So at the start of the presentation, you talked about three metrics or ways to look at monetization, total revenue, payback period and subscriber lifetime value. So we all kind of know what total revenue means, right? That’s just how much money your newsletter makes. But can you talk to us a little bit more about what…


payback period and subscriber lifetime value is and how the two interplay? Yeah, definitely. They’re tricky ones. So I think the easiest place to start is with subscriber lifetime value, right? Which is very simply, if you take all of your subscribers and all of the money you will ever make from those subscribers and you divide the one by the other, you end up with the subscriber lifetime value, right? Which is basically just how much revenue on average will you make from…


an average subscriber who joins your email list today before they stop being a subscriber, before they unsubscribe or before you shut down the newsletter or whatever happens, right, before you stop monetizing.


And that’s obviously really useful to know because it tells you basically, if you have a huge amount of money to invest upfront, what is the most you could invest to acquire that subscriber and to do that profitably. If you know that a subscriber on average that you acquire today is going to a new, let’s say $25 throughout their lifetime as a subscriber of your newsletter, then theoretically you could spend $24 to acquire that subscriber and


it would still have been a plus. It would still have been, you know, a net positive for you. And you’d come out with a dollar of profit. Now, obviously, most of us aren’t sitting there with a huge sort of big war chest. Exactly. War chest behind us, just counting all of the gold coins in the in the cellar in the basement. So


That’s where the payback period comes in, right? Which is where you break down that lifetime value and you say, okay, how much do I make from an average subscriber? Or how much extra do I make per subscriber in the first 30 days after I’ve acquired them? In the first 60 days, 90 days, and so on month by month. And you try and break that down. And these are vague numbers. You won’t get an absolute sort of exact.


metric for that. It’s a bit of a range and it’s a bit fuzzy, but that’s okay. You’re just trying to get that directionally down. So if you have a subscriber who, let’s say their lifetime value is $25 over their lifetime as a subscriber, well, if all of that is coming from purchasing a paid product and it normally takes them, let’s say three months to purchase that paid product and it’s a one-off purchase, that means in the first month you’ll make zero dollars from them on average. In the second month…


zero dollars on average and then in month three you’ll make $25 on average and Then it will always have been $25 from then on right so in that case you basically know that your payback period So the amount of time it will take you to pay back what you’re paying to acquire that subscriber If you need to make that money back within the first month


whatever you’re paying, you can afford to pay $0 to acquire that person because you’re going to make zero back in the first month, right? The second month zero again, and then in the third month, $25. So that really gives you an idea when you’re thinking about what you can invest into growth of how long it’s going to take to pay that back and then therefore how aggressive you can be with your acquisition. And it’s something that most newsletters, they tend to slightly underestimate.


what their payback period is and they tend to slightly overestimate what the lifetime value is in most cases. So people are just a bit too optimistic? Well they’re a bit too optimistic about the lifetime value of a subscriber and they’re very often a little bit pessimistic about the payback period basically. We tend to see that a lot of the newsletters we work with at Spark Loop, one of the biggest things on the growth side because obviously…


your payback period defines how aggressive you can be with growth. And when we actually crunch the numbers with newsletters, we tend to find two things. Number one, that it’s really, really easy to find ways to decrease the payback period, so to make it so that you’ll get paid back what you’re paying for acquisition earlier, so that you can spend more on acquisition. And also just that the numbers are a lot better than they thought they were on the payback period part in the first place. What are some ways, or some common ways, to decrease the payback period?


Good question. So it depends on how you’re monetizing your newsletter, really. If you’re monetizing your newsletter through advertising, not only through advertising, then there isn’t really that much that you can do directly to tweak that without adding in new sources of revenue, because you’re probably selling your ads in advance. If you’re doing a good job of it, you’re probably already factoring in how the newsletter will grow. And those subscribers won’t then start factoring into it for another two or three months in most cases. So you can’t really change things there.


But what you can do if you’re in an advertising situation is to take something like our Upscribe program that we have at Sparkloop for example, not to turn this into an advertising thing, but this is probably the best example of this where with with Upscribe or there are


other similar things available. When someone subscribes to your newsletter, you can recommend other newsletters that they might like immediately after they subscribe, and for each of those newsletters that they opt into, you’ll get paid, you know, a couple of dollars US, so on average two to three, two to five, I should say, dollars per subscriber. So what that means is


Okay, if your lifetime value per subscriber is, let’s say 30 or $40, an extra $3, it’s a 10% increase, it’s nice, but it’s not, you know, it’s not huge, just in terms of the lifetime value you’re adding, right? It’s not a game changer for your newsletter. But if that $30 is coming on average over 12 or 24 months.


and you’ve suddenly added in an extra revenue stream that nets you an extra three dollars on average in week one, all of a sudden that means you can afford to pay an extra three dollars.


almost per subscriber that you’re acquiring, which is a huge amount. That means you can probably spend double what you were spending before. So that’s a really good source on the advertising side. If you’re monetizing primarily through subscriptions, you can still do subscribe and similar things like that with, with affiliates in the first week. But you can also do things like be slightly more aggressive in terms of asking for annual payments or quarterly payments upfront.


a quarterly if you switch from a two-week free trial to a two-week money back guarantee so the cash is coming in earlier all of those things even if they’re slightly reducing the lifetime value of the subscriber if they’re letting you be a more aggressive in growth then those are probably net positive things because you’ll be able to spend more to acquire more subscribers and then even though you’re making slightly less over the lifetime of those subscribers


you’re getting a lot more of them a lot faster. Yep. So the net profit, the net revenue works out to be more favorable. Right. And you just have more cashflow, right? Which allows you to deploy the cash. Yeah. Rather than kind of wait for it to come and then kind of later on, think about what you can do with it. Yeah. And it’s interesting, you know, cashflow is something I’ve, I’ve, I’m one of those weird people who’s run a software business, a consultancy, uh, info products, and actually a physical DTC brand. And.


DTC brands are the only ones that really, really think very heavily about cashflow because it’s the one where you have to invest the most into your cost of goods sold. So they are so on the ball with that because you can actually, it’s hard to imagine as a sort of a…


you know, a digital business or a publishing business with a physical product, like an e-commerce store, you can actually sell too much and basically kill your product and kill your brand because you can’t afford to stock all of the orders that you’ve sold. Right. So it’s one that you have to think a lot about. So you can’t actually fulfill what you’ve sold. Exactly. Yeah. It’s quite interesting how different, I guess, the economics are with digital products versus physical products. Yeah. Can you talk a little bit more about how…


So you have this really cool two by two matrix with the payback period and subscriber lifetime value and how kind of there are different types of monetization or revenue streams that fit within the different boxes of the matrix. Can you tell us a little bit about that? Yeah, definitely. I mean, I think we’ve, we’ve sort of skirted around it a little bit already, just in other words. So really what I like to do there is, is just break this down into


the payback period and into the lifetime value per subscriber, right? Where you have different revenue streams that you can have as a newsletter. And I think most newsletters, almost publishing businesses, they tend to not really diversify too much on the revenue stream side of things. They tend to find one or two sources that they’re happy with, and then they fixate on how they can improve those rather than trying to, I guess, price discriminators is probably the right word, on all of their audience, right? So that the purchasing potential of all of their audience.


I think the interesting part of this is where it pertains to the growth of your newsletter audience, right, and what it can unlock for you there. Because what everybody wants to get to is obviously a large audience where you’re making a lot of money per subscriber that you have in that audience. So a lot of subscribers, a lot of money. Ideal, everybody wants to get that. But you can only get to a large audience where you’re making a lot per subscriber if your payback period is low.


if you can afford to spend a lot on acquisition because you’re making a lot of money in the first month or the first two months as well from those subscribers because that’s what defines the growth rate, right? So what you tend to find with newsletters is that, well, most newsletters traditionally, because they come often from sort of the blogging indie scene rather than from a business where they’re super under monetized, they’ll be in the super long payback period and also the low value per subscriber.


even most sort of viable newsletter businesses and publishing businesses, they tend to be not in the good payback period, high value per subscriber segment, they tend to be in one of the other ones where they either have a lot of money that they’re making per subscriber, but it takes them forever to earn that money and that revenue from those subscribers, or they tend to be very good at having a relatively quick payback period, but they tend to be terrible at actually monetizing those subscribers long term.


in that space where you have people who are growing huge newsletters very quickly, where they make very little per subscriber, and then also newsletters where they make huge amounts per subscriber. And we’ve seen newsletters that make, you know, on average over a thousand dollars per subscriber, but they grow super slowly because it takes them a long time to nurture those subscribers into becoming paying customers. And so for both those extremes, can you talk about how they are monetizing their subscribers?


So let’s say the ones that are growing really, really big, but under monetizing, how are they typically getting their revenue? Yeah. So the ones that are growing really, really quickly, they tend to be really good at finding very affordable sources of growth, right? So they’ll tend to have some sorts of competitive advantage, whether that’s a huge audience of their own, whether that’s inbuilt sort of referral growth, word of mouth, whether that’s SEO they’ve built up.


Sometimes they’ll just have collaborations with external partners that sends them huge amounts of traffic and audience that isn’t available to a lot of us. And sometimes they’re just really, really good newsletters. They’re great at writing and really bad at business. So you tend to see that on that side and they will almost invariably be monetized with ads or occasionally with affiliates. Right. But on a pure, we do a lifetime value calculator at Spark LoopWay that you can go and plug in to find out.


what the expected sort of lifetime value of your subscribers is and how that can change based on different revenue streams. And we’ve had thousands of different newsletter publishers use that and we look at the data and our period and far and away the newsletters with the lowest lifetime value tend to have just one or two revenue streams and they tend to be advertising or sponsorship based and affiliate based as well. So purely affiliates or advertising.


And then on the other end, the newsletters that tend to make the most, they almost all have multiple diversified revenue streams. So three, four, five or more revenue streams. And they’ll tend to have a high ticket item that they’re selling directly to their audience. That could be info products. It could be events. It could be premium subscriptions. It could even be recruiting. In some cases, there’s lots of different things, you know, for different businesses.


but they all invariably have some sort of product for that sort of top 0.01% of subscribers who would be very happy to spend, you know, a thousand or ten thousand dollars a year on something from your brand. Right, and so if I’m understanding this correctly, what you would recommend is whether you’re on one end or the other to kind of have a diversified portfolio of revenue streams. And so if you’re on the…


huge subscriber list side of things with ads, affiliates, sponsorships, stuff like that. You should also start selling products or events. And then if you’re on the other end and you’ve got the premium products, then you should also add advertising and sponsorships and affiliates. Is that kind of how you’d approach it? I would never give sort of blanket advice to everybody with a newsletter saying you should add in ads or you should add in affiliates or you


mind-blowing to me is that you have people who’ve been growing these, you know, often very professional brand name businesses with newsletters for 10 years or more and they’ve never once recently sat down and thought about, okay, where are we weak? Do we not make enough revenue per subscriber or do we not make enough revenue in the first 30 days or the first 60 days to be able to grow aggressively?


which one of these is the issue here? Are we bottlenecked on what we can spend to grow because we’re not earning soon enough? Or is the bottleneck the real opportunity, just what we could be earning long time and diversifying those revenue streams? And it’s something, it’s one of the first questions whether I’m helping a newsletter with growth, whether I’m helping them with monetization. It’s basically the first question that I try and drill down to is like, where is the weakness here? Cause it’s gonna be one of the two or both, and which one is most urgent? And I think that’s…


definitely something to start thinking about because once you clarify that, it’s much, much easier to improve the newsletter and improve the business behind it. So assuming someone has a payback period issue, what are some typical either next questions or stuff that you would recommend? I think working out why you have a payback period issue is the first thing, right? So is that because the acquisition costs you have are just…


very high compared to what you should be expecting or is that because you’re making way less per subscriber in the first 30 or 60 days for example than


than what you’d be, you should be expecting. And often it’s a mix of both, but what you’ll tend to find is that because newsletters are thinking about the lifetime value and they’re thinking, you know, oh, well we can afford to spend $10 to acquire a subscriber. And actually they, in a sense they can if they had infinite cash, but in another sense, you know, they can’t, even though the math does work out long-term, they can’t afford to keep doing that scale. They can’t keep saying, okay, we can spend 10 because we’ll make 11 back, you know, within two years.


Getting that into their heads is the first thing. And then from there looking at, okay, well, if you’re spending $10 to acquire a subscriber, which is for most people way too high, but we do see it, why? Where are those coming from? How can we look at other acquisition sources, acquisition channels on the subscriber acquisition side to decrease that?


and if they seem to be in a ballpark that should make sense. So let’s say, you know, in the US, maybe they’re in that sort of 250 to $4 per engaged subscriber ballpark, which is where most people tend to be. Well, if you’re already there, you have diminishing returns when it comes to reducing that. You can only get that 250 down to close to zero. It’s much, much harder to change the way that you’re growing and acquiring subscribers such that you go from 250 to $2.


than it is to change the way that you’re monetizing your newsletter to earn an extra 50 cents because, you know, there’s literally the sky’s the limit when it comes to growing the revenue, whereas it’s very, very difficult to reduce a small number, even smaller. Talking about the sky’s the limit in terms of how to make money, how do you approach different revenue streams and categorize the different ways you can make money? Good question.


I tend to think about it really as three ways that you can monetize a newsletter in general. They tend to fall into three buckets for me. So you have selling a product or service of your own, leveraging the authority or the trust you have to sell or recommend product or service or something from someone else and just asking for support. So


you can do all three at the same time, that the lines are a bit fuzzy. You know, this isn’t sort of a nice grid where things slot only into one. There’s often elements of all of them. But I think that is getting relatively clear on that and why people are monetizing with you or purchasing from you is very important because what we tend to see is that a lot of publishers.


more on the solo side, but often also on the more professional media brand side as well, they get confused between people are purchasing from us because they want the product or the service and people are purchasing from us because they want us to exist and they want to support us. And so often we’ll see it’s very easy to increase the revenue you make from essentially the same product just by repackaging it slightly differently.


So from saying you want this premium subscription or this premium newsletter because the content inside of it is really great. It’s gonna change the way you start your morning, you know, every five minutes, you’re gonna be the smartest person in the room, that kind of thing, which is fine. And the content probably is great, but if you dig down into why people are supporting you, it’s really because they just want you to keep existing. They want to be in a world where this exists. They want to be in a world where they’re sort of…


associated with you and part of the reason for your success. You know, you see it with podcasts where you have premium podcasts, where they don’t really want that extra sort of bonus content necessarily. They just want to be close to you and to support you in your mission. And they want to live in a world where you exist, right? Same with Twitch streamers, same with all kinds of different things. And I think in the newsletter space, we because a lot of it comes from that sort of more journalistic background, where we want to think that the content we’re creating is.


you know, this piece was worth people paying $5 or this piece was worth people paying $10. I think it would be useful for a lot of publishers to start to think more and realize more that a lot of it’s just about the support angle and people wanting it to exist. Cool. Okay, so going into different revenue streams, so I feel like the one that you’re talking about is kind of almost donations and tips kind of thing and like being able to, I guess


between donations and tips versus a paid subscription? So would you say it’s the same thing, just repackaging, or would you actually encourage people to have two different products, so to speak? Like have the donation over here, but then also have the subscription product. That’s a tricky subject. I think there are, depending on the way that your organization and your business is set up, there are tax advantages and reasons to…


be pitching things as support in terms of charitable donations, for example. Right. So it’s different based on where your business is located and how you’re set up, whether you’re a nonprofit and all of that kind of stuff. And that’s not my own expertise. So there will be very valid reasons for doing or not doing that. In general, my point is more about less about saying, okay, well, we want you to donate. We want you to leave a tip and things like that, which is great. And more about.


this quote is from, but you know, it’s, it’s that classic of people by


with emotions and then justify the purchase with logic and with reason, right? Yeah. And I think we often believe our rationalization a little bit too much and we should lean more into, okay, this person is paying me $10 a month for my premium subscription. They’ve rationalized that purchase with, oh, well, I’m going to get this extra content and I’ll get early invites to events and stuff like that. And that’s great. That’s how they justify and rationalize that purchase decision. But…


really a lot of the reasoning for why they’ve done that is just the emotional closeness. They want to be supporting you. They want to feel like everyone else who’s also supporting you. They want to be part of that inside group. They want to be in a world where this exists and where they’re one of the people who’ve been lucky enough and successful enough in their own life to be able to support something like this, right? And I think we forget about that in the marketing and the positioning of these products. We sort of believe our own sort of Kool-Aid around the rationalization a little bit too much.


Let’s go into our intermission. I have a bunch of quick questions that I’ve prepared to get to know you better. Feel free to answer in a word or a sentence or however much you want. Awesome stuff. Let’s do it. Question one, UK or Portugal? Ooh, for almost everything, Portugal, I would say. What’s your favourite ice cream flavour?


That’s a really good question. I don’t have a favourite ice cream flavour. It really annoys people when they ask me. I would say it’s very situational. Right now it’s very hot here in Portugal and a little bit humid. So I’m looking for something less heavy and more of like a sorbet. Like there’s a place close to my apartment that has basil ice cream and also mango ice cream, which is very good. That sounds delicious.


Outside of work, what’s something you’re really, really into? Um, gym, going to the gym, weightlifting. Love that. Very classic, just once a day, go pick up heavy things, get it all out of my system. And other than that, I just started properly learning Spanish. So I’m in a big sort of, I guess, Spanish learning phase right now where I’m learning it like a toddler and I can just about have conversations, but I noticed that I’m pretty bad at it, so it’s a, that’s a fun one. How does it compare to your Portuguese?


Oh my, I can’t speak. I don’t believe that Portuguese is a real language. I’m convinced that people are just, that they’re making it up just to confuse me. Spanish is so easy and it’s basically the same words, but the Portuguese accent is so difficult. What’s one favorite book from your childhood? Good question. So I’m probably going to have to say Harry Potter.


I mean, there’s lots of other books that I like. I used to read a lot. I used to read almost a book a day as a kid all the way through high school. But Harry Potter is definitely the one that left a lasting impression. Nice. Which was your favorite one? It’s a long time since I’ve read them. Probably the third or the fourth one. Yeah. I think. If you could only drink water and one other drink for the rest of your life, what would that other drink be? Good question. So I basically only drink water at the moment anyway.


I don’t know, it’s a toss-up between tea, coffee, and very occasionally, for me there’s nothing better than if it’s a really sort of warm day, just like a Coca-Cola Zero. Very rare, but there’s nothing better than that very very cold Coke from a glass bottle.


Maybe that. Nice. Kind of like the classic ad where someone’s really, really parched in a desert and they… Exactly. Yeah. Cool. So while we were talking, I’ve been adding some of your answers into ChatGPT and asked it to write you a limerick. Oh no. Okay, here we go. Okay, so here goes. There once was a guy named Louis whose taste buds were certainly woozy.


He craved bezel ice cream, thought Portuguese a dream, while lifting weights and sipping Coke Zero, how doozy? Not bad, it encapsulates me perfectly. I’ll have to start introducing myself like that as I can go on my dating profile. Sure.


So you’ve talked to a lot of newsletter operators, what are some products or services they sell that you’ve seen really take off? And I know this obviously differs drastically from industry to industry, but if you’re talking about the world of online publishing, media companies, stuff like that, rather than e-commerce, for example. Oh, definitely, yeah. So I love how over the last year or two, we’ve started to see media brands being a lot more creative with this and really waking up to…


the value of their own brand and their own relationship with their audience, which is something that podcasters had done before. YouTubers have been doing really successfully, even influencers, you know, sort of classic Instagrammy influencers, really, really early on those trends. And then in the newsletter publishing space, obviously we lag behind and it’s taken us a while to wake up to that. But if you look at, for example, at Chiz Media with their newsletter, they’ve…


launched a brand of canned cocktail drinks, for example. We’ve had James Clear with his huge 321 newsletter. He sold a physical pen. Oh, I didn’t know that. Which he partnered with a brand to produce, which I don’t know what the sales were on that, but they must have been ridiculously high. And then the big one, I think, from a more traditional publisher’s perspective is probably events, right? We’re seeing, after a tough couple of years with COVID, we’re seeing the event space.


rebound dramatically, amazingly. Everyone has budget. Everyone is realizing, especially in a professional space, we aren’t in the office, we aren’t networking and making connections in the way that we used to be doing. We need some human contact. We need to be, you know, connecting with other humans in our space. We need events, right? So that’s a huge one that I’m seeing at the moment is access to primarily physical events, but often digital as well. And then really premium offerings.


collaborating with third-party brands to produce stuff, and also just adding in like Axiosted with their premium subscription, these subscriptions that are aimed at that top sort of 0.01% of your audience. Cool. And is it the same thing when it comes to selling someone else’s product? Are you seeing people selling the same sort of things like events, conferences? Yeah, so it’s an interesting time, right? I think anyone in the publishing space knows this.


better than I do, that budgets over the last six-ish months have been very tricky on the advertising side. You know, there’s not a lot of what we call sort of brand exposure dollars floating around where people are willing to just sponsor the newsletter and say, oh, well, you know, we don’t care too much about the clicks, but we just want to be in front of your audience and eventually that’ll do good things for us brand-wise. So we’re seeing a real shift into performance-based advertising, performance-based sponsorships and collaborations.


which is a double-edged sword because if you have a very large newsletter that isn’t particularly highly engaged, that’s going to be an issue for you because the brand performance was paying you a little bit too much and they didn’t know that. If, on the other hand, you have a very engaged audience and you’re doing most of the sales outreach yourself to those potential sponsors and advertisers, that actually can turn out to be a very good thing for you because if you’re being paid on a performance basis and you’re performing better than average,


then you will earn more. So it has its positives and its negatives, but it seems to be a trend that isn’t going to stop, I think. Just because it’s so easy to track the performance in newsletters as opposed to podcasting and TV and those more traditional mediums, I think it’s gonna become more and more of a thing. And I don’t think there’s any sense in not leaning into it. And I think the approach that I like to see is people being even more proactive with that and saying, okay, well,


I will do performance, but I’m not going to do it based on clicks or based on these metrics that you’ve said. I want to embrace this. I want to become an official partner of yours. I want us to partner up on this and I’m going to promote it more heavily to my audience because it’s actually a really good fit for them. But I want a much bigger cut of performance of revenue that I want us to take this sort of more seriously as a lasting partnership. Cool. And I imagine that means that the pool of…


partnerships that you can then take on are much smaller, but then potentially revenue-wise that increases a lot as compared to just kind of taking ads from anyone and having a wide pool, but then not having as much revenue per advertiser. Definitely, yeah. And I think it’s one of those areas where you, you just have to be realistic with yourself about.


the value of your recommendation and the relationship that you have with your audience, right? And that’s one of the big differences of those media brands and newsletters that have grown over the past seven to eight years versus the ones that were around for the most part in the late 2000s and early 2010s is that the newsletter became, it’s this dramatic


links to stuff you’ve written online from that to this is written by a real person with their tone of voice, there’s an editorial style to it and there is a direct relationship with the reader and the reader probably can visualize the person who wrote the newsletter and knows their name and their voice and all of that stuff. And I think if you’re in the former, firstly, you have to start thinking about, well, how do I change this because I’m missing out on this huge opportunity to have, you know,


really powerful connection with my most dedicated readers. But secondly, you know, if you are in that group of newsletters, well, your recommendation just it’s not worth that much, right? You probably don’t have that leverage. So in that case, maybe you do need to be going quite broad and doing more programmatic advertising in your newsletter and leaning into affiliates and monetizing that way while you change things. Do you have an example of newsletters who have successfully made


broad programmatic advertising to more specific partner based advertising? Ooh, not a traditional one. No, I don’t. Not off the top of my head. I know that a lot of everyone copies, right? Everyone just blindly copies what the people before them who are currently seen as successful were doing, right? We see it on the referral program side with everyone copying Morning Brew’s referral program, which…


worked despite their rewards really rather than because of the rewards and the strategy they had to be completely transparent and everyone copied them and it huge issues for all of them because of that. I think you see the same with a lot of the newer publishers and newsletters that we’ve worked with over the last couple of years where they saw these newsletters previously doing you know programmatic advertising and slapping in ads for anything and doing those ads as uh


you know, they would be written by the brand and they would be often just an all image inside of the newsletter and it would be sort of just inserted there like a banner almost and they saw that and they thought, well that’s how they’re monetizing, I want to be big and successful like them so we should try that too so there’s a lot of those newsletters that have turned around and said, hey, we have you know, only 20 or 30,000 subscribers in our free newsletter audience and we’re making


nothing, you know, $500 maybe percent, maybe even less, you know, $200 percent with this sort of advertising that we can get from these arbitrage marketplaces and this programmatic stuff. But I can turn around and find just one or two really good brand partners, often from inside of my audience, who are willing to grow with me, who are willing to become headline sponsors and presenting partners and all that kind of stuff.


and to spend, you know, because they’re so targeted, to spend a thousand, two thousand to send and to commit for six months, right? Yeah, that makes sense. So our audience is mainly publishers, media companies and newsrooms, and they commonly have three ways that they are making money. So the first is donations, second is subscriptions and the third ads, which we’ve covered a whole bunch. So I kind of want to move and talk a little bit more about donations and subscriptions. But I guess like before we go into that,


I also kind of want to know what you think of this triumvirate model and whether you think that these publishers should be diversifying into maybe either more affiliate sales or developing their own products and starting to sell that. Yeah, well, I mean, you work with them every day. What do you think? I think it’s difficult. So I think it has to do with the way the organizations are built. So a lot of them, you know, it’s like 20 journalists in a newsroom, right? And asking…


a journalist to then come up with, let’s say, a course, right? Even if it was like a journalist course, which they know all about, it’s still kind of hard when they’ve spent a lot of time kind of just doing reporting day in, day out. So I think for me, I would say that that’s kind of the main hurdle. So less about whether they can and should, which I think they can and should, but more just…


It’s really hard as a company to develop new products as both you and I know running product companies. Yeah, definitely. I think that’s very fair. I think there’s often that lack of a clear person, especially in more of a newsroom, who would be responsible for sourcing and taking ownership of those revenue streams.


so focused on the business model that they have that they’re not looking outside of that, even as maybe there are limits that they’ve sort of artificially imposed on themselves because of the business model that they’ve chosen and limits to how that’s going to develop in the future because of, you know, the way the market’s going. So firstly what I’ll say is again, it comes back to figuring out where you’re weak, right? So if…


you’re currently making a lot per subscriber and you’re making a lot of that upfront, then maybe focusing on mixing up revenue isn’t the main thing to be doing right now. Maybe you should be focusing on growth, you know, whether that’s growth of audience or templatizing what you’ve got that’s already working and expanding into new markets or into new verticals. There’s lots of different ways to be thinking about that. So I don’t think necessarily everybody should be just blindly, you know, listening to this and then…


Trying to R&D and do new stuff. Exactly, yeah.


Newsletter Glue cuts your publishing time in half by enabling your team to publish newsletters the way you publish articles in WordPress. Find out more at Now back to the episode. I think the place that I would be starting, especially as a newsroom is on the advertising side of things, if you’re not doing advertising and on the events and the premium subscription side of things. So if you’re good at subscriptions.


if you have a you know that classic sort of three to to $20 a month subscription you’ve probably spent a lot of time wondering how you can improve that and how you can optimize it and you’ve tried different trial periods and all kinds of things and lifetime deals and all that kind of stuff but by doing that you’re talking really there to that top sort of 10 percent of your subscriber base


the ones who like you most, really that sort of 5 to 10% who’d be potentially be willing to pay you in that range. Right. So you’ve completely, almost ignored the 90 to 95% of your audience who will pay you nothing, but that can be monetized very effectively. You know, they still like you, they still trust you, they still want recommendations from you, they just don’t want to get their credit card out to spend money on what you have. You’re missing out on revenue from that 95%, which is, because there’s so many of them, turns out to be very significant.


even though the numbers are very small per subscriber. And you’re also under monetizing the top 1% ish and the top 0.1%, right? Because those are the people who would happily, if they could be spending a thousand, 10,000, even more per year on you. And at the moment they have maybe have like a sort of premium subscription where it’s 200 instead of a hundred or whatever it is a year, but they’re nine times out of 10, they’re being under monetized as well. So.


I would start thinking, you know, if you imagine almost as like the letter T, some of the capital letter T, you know, you’ve got that bit in the middle. Now try and branch off to the left and the right for the ones who’d pay more and the ones who will pay less. Let’s brainstorm a little bit. What are some ideas that you have for people who are willing to pay more? So like that top 1%? Yeah, well, let’s take a…


What’s a good example of a newsletter or publishing business so that we can think a little bit about it? It depends so much, right? I think it’s what I think it needs to be unique and in line with the audience, right? Right. So let’s just say like a typical online publisher like TechCrunch or Vox or something like that.


Yeah. Putting you on the spot here. I enjoy Armjack World of Akin, but I also know that it’s always wrong because you don’t have the context for inside, right? So this will all be wrong, but I think it’s a fun process to go through, even though this will be useless too. So the actual people who have boxed in TechCrunch. Yes. I mean, I think they already do events, right? TechCrunch, for example. I don’t know too much about how they monetize, but I think leaning into the events and the premium events is a big thing.


leaning into hiring could be really interesting, you know, to executive hiring. We’ve seen Workweek recently, we’ve seen some other more sort of newer publishers lean very heavily into the talent acquisition, talent sourcing game because they have those audiences. And if you’re TechCrunch, you do have those audiences. So leaning into that part of things could be really interesting. Just for some context for people who don’t know what Louis is talking about. So there are some bigger publications who have started


I want to call it side businesses or side revenue streams providing hit hunting business so you can then go to them and they will, well, I’m not sure exactly how they’re doing it, but basically they’ll source and find people for you to hire. Yeah, exactly. I think just again, finding the value in that relationship with the audience, right? So curating opportunities, having people who


are of that sort of correct audience profile in your audience. And then being able to leverage that to get those opportunities in front of those people is super valuable for sure. I think those probably would be the places that I’d be looking on the premium side. You know, a lot of that premium parts of your audience will be looking to hire or will be looking to be hired, whether the money is really significant on those ones and on the event side of things. I mean, people are really willing to spend a lot of money on travel and experiences and events right now.


We’ve seen with COVID people take almost the opposite approach where they’ve started reducing prices and making those digital tickets. Yeah. And making things like that. I would love to see more publishers be very aggressive and do more of the, you know, well this ticket’s going to be, it’s going to be $5,000 or it’s going to be $10,000. And it’s going to be in person. You’re going to need to be there for three days, but it’s going to be really fun and you’re going to meet a lot of cool people. I think those are awesome.


And then on the lower end, you know, 95% of people who are never going to subscribe and pay you, would it just be advertising? I like advertising. I don’t think there’s anything wrong with advertising. I definitely think if you’re not doing advertising in your newsletter for anything at all.


That’s probably, unless it’s within sort of like your nonprofit guidelines, I think that’s probably a mistake. Yep. So I would definitely be exploring good relevant advertising, whether that’s advertising in the traditional sense of partnerships with brands, whether that’s.


recommendations of products and services that you’re partnering with, whether that’s something like through our partner network at Spark Loop where you’re recommending just other newsletters for example. I think there’s lots of places now over the last couple of years where you can go and find relevant brands and products to pitch to your audience without too much work, at least to test it out. And then, you know, if you have an engaged audience that’s willing to…


pay for a subscription or for a product of yours already, then there will be a lot of people who want to get in front of that audience. And a lot of them will already be in your existing audience. So it’s quite easy to get started there, I think. Just for some crossover episodes. So in a different episode, we had Tyler Channel talk about subscription flows for local newsrooms. And one of the things that he also talks about is advertising and how…


Newsletter advertising is quite different from site advertising. And with the local newsrooms that he’s been working with, a lot of them don’t realize that there’s a difference. And so for them, they either don’t do the ads in the newsletters, or they don’t value the newsletters that much, and they’ve either tried doing Google ads on their site, or even trying to sell ads to their site and with limited success. And what he’s found is encouraging them to start advertising in their newsletter.


is that there’s actually a huge payoff, I guess, for the advertisers. And the difference is just that newsletters live in the inbox, so it feels a lot more personal and it goes straight to the actual subscriber as compared to on the site where it can feel a little bit more disconnected. You have significantly less control over who’s going to your site. They might not be as specific. And I think that’s something that a lot of people don’t realise.


because when you talk about advertising, and if you’ve had a web publication for 10, 20 years, and you’re like, oh, advertising doesn’t really work, I think it’s important to know that newsletter advertising is actually quite different from web advertising and not to lump them in the same bucket when kind of considering starting advertising if you haven’t already. Absolutely, yeah, absolutely. It’s completely different animals, completely different games, yeah. The last question that I wanted to ask is,


When it comes to subscriptions, do you have best practices for optimizing and getting more revenue out of the way people are running their subscription game? So we’ve helped, you know, sort of informally a number of publications do this, mainly as part of acquisition stuff we’re working on with them. So if we’re helping them set up a referral program or if we’re helping them with paid acquisition.


then we’re often looking very closely at how we can optimize what they’re spending and what they’re earning per subscriber and that’s the door into discussions that they haven’t had for a long time around pricing and packaging of those subscriptions and whether they do a free trial or they don’t do a free trial and things like that. In general the two biggest levers that I tend to see


or underutilized, well, actually, let’s do three, because one we’ve touched on very quickly. So the first one we’ve already touched on is just not having something at that very premium level for the people who would be willing to pay 10 times as much. I think having something there is super important. Number two is also relatively easy, is leaning more into team and bundle subscriptions. So that could be internal. For example, if you…


have a newsroom that sells in more of a b2b.


setting. It is a huge miss if you don’t have someone on your team who is relatively going through new paid subscribers and checking for the email domain and checking for their profile, whether you’re doing that automatically with a third party tool that will enrich the data to know that person is. So some kind of like sales CRM like magically give you all the data of the person type of thing. Yeah, if you’re enriching using one of those tools online, like Clearbit for example, on the B2B space, very popular in the software space.


If you’re seeing those page subscribers coming through and they’re signing up with a corporate email and that corporation has multiple team members, you should be reaching out and offering them a tailored package, whether you can, you know, get…


10 people on their team or 100 people in the organization to be signed up. Same thing with students and also same thing with other paid publications. I mean, if you have people subscribing to your publication, you should be asking them what other publications they read and which ones of those are paid. And if you start noticing similarities over time, you should be figuring out ways to, to bundle up with them as well. Right. So you can start saying, look for an extra $5 a month or $3 a month. You can add in this, this package, which gives you access to these other ones as well, which is something that,


Substack is increasingly doing for their publishers and also something that the team at Evry has done really well as well I like the way that they’ve both thought about that and then the other thing that I think is really worth playing around with is Leaning more into the idea we were talking about before of people wanting to pay you To support you and rationalizing it with the value that they’re being given rather than actually paying for that premium content


And I really think that you want to take quite a strict approach on this and either make everything paywalled and it’s just, you know, if you want to get access to any of this it needs to be paid or take the opposite approach and try and be much more generous and give away as much as you can for free and really add in those sort of token premium things so that the people who want to support you for what they’re already getting for free can do.


I don’t like how sort of stuck in the middle, a lot of publishers tend to be there. Yeah, it’s hard to kind of make a decision, a decisive decision and change your entire business to follow that whichever philosophy you choose to go after.


It definitely is, yeah, but I mean, the lucky thing is that with a lot of these things, you can experiment quite easily. You can set up a separate landing page. You can, you know, send traffic to that from a particular source and see how that works out over time. You don’t have to, like we do in the, in the software space very often, you know, we can’t.


play around with the pricing too much without affecting it for everybody. We can’t tell people coming to one page, you know, oh, this is going to cost you a lot more or a lot less, but you can do that a lot more easily in the publishing space. Yeah, that’s a good point. Cool. Thanks, Louis. So we’re going to wrap up with some quick recommendations from you. So three quick questions. The first one is what’s an underrated ESP you wish people talked about more and why?


Oh, okay, now I don’t get into the ESP game. We partner with 20 plus ESPs, and all I will say about ESPs is two things. Number one, nobody who knows what they’re talking about is happy with their ESP. I’ve spoken to 10,000 easily newsletter operators from the biggest publishers in the world to the smallest, and nobody is happy with, you know, sort of perfectly happy with what they’re on.


with the exception of people who really don’t know what they’re talking about. So that’s what I say, is if someone’s happy, that’s the only opinion you should sort of discount. And the other thing I’ll say is that there have been situations over the last five years where I think I’ve recommended almost every ESP to somebody for a specific reason. So there’s no best one that I’ve seen, it just depends on what you’re trying to do, and the grass will always seem greener.


There’s an interesting phenomenon I see where people, especially this happens more in the indie and the creator space, rather than in the publishing, you know, more traditional space, is that people sort of leapfrog from cheap and free platform to the next new thing and to the next new thing and so on and so on. And they spend so much time doing that that they actually never get anywhere because they’re just upping sticks and jumping to the next cool thing every couple of months. Next question. What’s your favorite must-subscribe, must read newsletter?


Ah, good question. You know, the sad thing is I have to read so many newsletters for work that it’s really difficult for me to say which one my personal favourite is. One thing I will say is I think in terms of doing things that are interesting, I think Katelyn Burgoyne’s Why We Buy newsletter, especially if you’re in the marketing space, is really, really good. The content in it is super original.


It’s very, very useful, very well written. It’s clearly really well researched and it’s made to be, you know, it’s clearly newsletter and audience first, rather than being something that’s just available, you know, as an afterthought or a repurposing of something that she’s written somewhere else. And what I really like about it is that she is, well, more than almost anyone else I know, her Why We Buy newsletter is having fun with the format of newsletters in a way that others aren’t. So she does regular sort of


A or B, you know, vote, give us your opinion, take part, which should we do next kind of things. It’s more interactive. And I think it’s a good sort of exploration of what the newsletter format and relationship could be. So I definitely give that an explore either if you’re a marketer, because it’s a really, really good and useful read. And if you just want to check out someone doing something interesting with newsletters in a fun way, I think that’s a great example of it. Nice. What a great recommendation.


And last one, what’s your favorite piece of advice for newsletter publishers? Ooh, I think be more aggressive. I think is that there’s an overarching theme. It’s quite vague, but of the last couple of years is realize the value of a newsletter subscriber, understand that you can monetize them very well and probably a lot better than you currently are doing, and then be way more aggressive about growing that audience.


The thing that I have to spend the most time getting out there is that a lot of the stories you hear about how large newsletters grew so quickly are, not to put a too fine a point on it, they’re very embellished. They’re not necessarily quite, you know, exactly what happened. Because everybody, when they grow their newsletter, if they find an acquisition source that’s working, especially if it’s paid,


They keep very quiet about it. They don’t want everyone else to know about what’s working really well for them. So they’ll say things like, oh, well, we just focus on writing amazing content, or it was all word of mouth, or we got really lucky with SEO or something like that. And the truth is that I can’t think of a single really large, really effective newsletter that didn’t get a huge amount of its growth from paid acquisition. And


Nobody really up until recently, you know, a couple of months ago, nobody’s wanted to talk about that paid acquisition has been. It’s been a thing that everybody has done who’s growing very quickly. And it’s been really, really obviously successful and there’s nothing wrong with it. But they’ve all kept very quiet about it. And you end up in this situation where you have lots of people who have smaller newsletters and what they read about how the


largest and most successful newsletters grew is that they were, you know, just writing really great content and somehow magically growing for free and it’s just not true. What I’ve heard is that in order to go from let’s say 100k onwards it becomes largely about paid. Very often, yeah it’s the challenges that as your audience gets larger your unsubscribe rate starts to matter, right? So people who stop


reading and just become cold subscribers that you need to remove yourself or people who actually just unsubscribe themselves even if it’s only you know 0.5% which is roughly where a lot of people will be


you know, if you have a hundred thousand subscribers, you have to be adding 500 a day or 500 a week, a thousand a week, just to even not shrink, basically, right? So as you get up into the hundreds of thousands and the millions, you know, you have to be adding 50,000 subscribers a week just to stay where you are, basically. And that is a challenge and you will definitely need some paid in the mix to do that for sure. Yeah, that makes sense. If people are interested in learning more about you and Spark Loop, how can they find you?


They can find me on Twitter. I’m at Louis Nicholls with an underscore after my name, because I think someone else took my, my Louis Nicholls a long time ago. So I’m still very angry about that. Or at is a great place to find us as well. Nice. And I want to say one thing, which is you seem to be on all the newsletter related Telegrams, Discords, Slacks, Facebook groups as well. And weirdly engaged, like you’re actively keeping up with all of them. And so, you know, anyone who.


wants to talk to Louis as well, I think. If you’re on a Discord or a Slack or a Facebook group related to newsletters, it’s likely that you’re going to be able to find him there and talk to him there as well. Yep, you’ve added to me. It’s a bit of a newsletter nerd. I like to be talking to newsletter people. It’s really fun to help them and I like to talk to as many as I can. Cool. And we’re done. Thanks so much for coming on the show, Louis. It’s been awesome to have you. Yeah. Thank you so much for having me. It’s been great. Really fun to nerd out on newsletters.

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