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01 Jul

Email Newsletters Are Still A Serious Business

Email Newsletters Are Still A Serious Business

In late 2009, I wrote an article about the fascinating and very lucrative business behind email newsletters.  In the world of Twitter, Foursquare, and Tumblr, it’s not the sexiest of businesses.  In the past 9 months, a ton has happened in the space.  New entrants have emerged and past entrants are doing even better.  Let’s take a look:

Help A Reporter Out (HARO)-  A few weeks ago HARO sold to Vocus for a reported 8 figure sum (I’ve heard 20 million).  That’s right, a boostrapped email newsletter went from starting out as a facebook group, to email newsletter, to $1 million+ in revenue, and then a huge acquisition.

Thrillist-  This is my favorite out of the group due to their new strategy: mixing commerce with content.  Thrillist purchased JackThreads a couple of months ago in order to further monetize their audience and provide value.  More importantly, Thrillist is officially on record to be doing $10 million+ in sales this year along with 2 million+ subscribers.

Since then a few new and interesting players have come into the field, including many that have been funded by Bob Pittman:

Tasting Table-  Tasting Table has been around for almost two years, and I overlooked it last time.  That’s okay though, since it’s been growing like a weed.  It’s also Pittman backed and founded by restaurant entrepreneur John McDonald.

GeekChicDaily-  GeekChicDaily was founded by the original founder of Wizard magazine and other publishing vets.  It caters to a crowd I’m familiar with: Geeks.  I have a list of verticals that I felt needed to be tackled, and this was one of them.  They’re doing well with a claimed 425,000+ opt-in readers, along with a nice round of funding from Bob Pittman and others that totals 1.5 million dollars.

DailyWorth-  I found out about Daily Worth from its founder, Amanda Steinberg, when I asked Quora for other verticals for email newsletters.  It is a daily email newsletter for women focused on the topic of personal finance (talk about lucrative market).  Forbes even called it one of the top 100 sites for women on the net. She already has 40k+ subs (and growing), along with an angel round of 250k.

Letter.ly-  Letter.ly is a new service from the founder of Drop.io, Sam Lessin.  The point is simple:  create a premium subscription newsletter.  Letter.ly is somewhat different from the daily content based newsletters without a price attached, but it still has the same belief:  email is a lucrative and focused channel to distribute content on.  Sam explains a lot of this on his last “blog post“.  Darren Herman makes an interesting argument against Sam’s move, but also brings up another interesting point:  Since I pay for the content, I find it to be more valuable.

Daily Deal Sites-  This would have to be the huge elephant in the room.  This space is absolutely killing it.  Groupon has gone from 0-1 billion dollars+ in valuation in under 3 years.  Other sites such as ScoopSt are also dominating it.  Though I believe the use of Facebook is a primary driver of customer acquisition, the main driver of customer retention and repeat purchasing would have to be: daily emails.

I don’t think things are going to stop here by any means.  Content is a huge business and customer acquisition can be done fairly easily if you’re sticking to  a specific niche.  There’s a reason Bob Pittman continues to invest here, and we’ve just scratched the possible verticals that can be attacked.  The value for advertisers is not going anywhere either-  email newsletters are a direct opt-in channel to a valuable targeted audience.  That’s called Nirvana to a marketing pro.  Have an email newsletter+some stats on the business that I missed?  Email me.

  • Sean

    Awesome Jason. You gave me some great ideas here about my list!

  • http://www.facebook.com/selau642 SE Lau

    Good Post!

  • http://blog.steveklabnik.com/ Steve Klabnik

    Another “daily deal” success story: w00t's recent purchase by Amazon.

  • barmstrong

    Pretty cool. In a similar vein, I was surprised to see how well companies that *provide* these email newsletter services are doing. Constant Contact is on track to be a $100m plus business. Aweber.com and others are quite big as well.

    A lot of people I've seen were turning the RSS feed of their blog into an email newsletter – to capture the best of both worlds. Feedburner does this fairly well for free with some basic features. Companies like Aweber have made a killing doing this with more advanced features, but their product is ~ $70/month. FeedmailPro.com is my own solution in this space and even it (as a late comer to the game) has been growing nicely.

    Email certainly isn't dead.
    Brian

  • barmstrong

    Yep – nice one.

  • Pingback: Why Email Newsletters are so Valuable, Case study on StartupDigest

  • http://twitter.com/TylerBeerman Tyler Beerman

    Very insightful, but email newsletters also mean big business for personal branding…. Heard of Jason Calacanis? @jason has a massive newsletter with 25k subscribers!

  • Rokamic

    Thank you for your research and opinion. Your post has rekindled interest email newsletters as something i've always considered important communication channels.

  • http://blog.seliger.com jseliger

    I don’t think things are going to stop here by any means. Content is a huge business and customer acquisition can be done fairly easily if you’re sticking to a specific niche.

    This is interesting to me because my family's business, Seliger + Associates Grant Writing, runs an e-mail grant newsletter that's been far more useful to us than anything else we've done in terms of advertising and in terms of getting people's attention. In addition, we regularly look for e-mail newsletter where we can advertise but have trouble finding them—a lot of people want to sell us banner ads on their websites, which have proven useless, but relatively few have newsletters.

  • lessin

    thanks for the letter.ly shoutout :) — information is by definition valuable!

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    do you think there's a need + enough newsletters to advertise on for this to
    work?

  • http://blog.seliger.com jseliger

    I have no idea—it depends on what you mean by “work.”

    We've been looking for newsletter and not able to find many, but we're also in an unusual niche and searching for a very particular audience—nonprofit executive directors, city managers, and the like. It's not terribly easy to find venues that would be appropriate for us.

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    Anytime! I'm thinking of setting one up for longer form posts.

    Sent from my iPad Nano

  • http://blog.cahootsapp.com/ Brian Sierakowski

    Don't forget about Startup Digest, a newer email newsletter focusing on the best tech events in over 40 cities worldwide. Currently distributing to over 52,000 subscribers! Go here for more info: http://www.thestartupdigest.com .

  • Jim Rivord

    An email newsletter that I have been reading for over 6 years is ThisIsTrue.com. He also runs stellaawards.com. He offers a free and a paid version.

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    I haven't! chris and co are doing an awesome job. I should have included
    them front and center here. By the time I write the next followup to the
    post, they will be even bigger :)

  • Gus G. Sentementes

    Your post reminded me of a story I wrote for the Baltimore Sun in December, where I covered lucrative email newsletter businesses in the Washington/Baltimore area. I think you'll continue to see these types of businesses thrive at the national and regional levels. http://weblogs.baltimoresun.com/news/technology

  • lessin

    do it :)

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    Gus,

    This is an awesome article. These are examples I haven't even dug
    through yet. I think the possibilities are endless, especially in the
    b2b space.

    Sent from my iPad Nano

  • Simms Jenkins

    Jason – excellent post & perfect examples of real companies leveraging email for real revenue. you hit the nail on the head in “direct opt-in channel to a valuable targeted audience.” The secret sauce in email is permission. How many marketing channels can say their audience is seeking their content and offers? I wrote an article four years ago that still holds true: Every Company Should Have a Newsletter (http://www.imediaconnection.com//content//8273.asp)

    Additonally, you can find metrics on email newsletters (and other email areas) on EmailStatCenter.com
    http://www.emailstatcenter.com/Newsletters.html

    Regards,

    Simms Jenkins
    CEO – BrightWave Marketing & EmailStatCenter.com
    *************************************************
    Author of “The Truth About Email Marketing” (Pearson/FT Press, 2008)

  • Lkeeler

    Damn Fine Day from Rhino is a clever newsletter that delivers a daily song from their catalog. I think they have over 40K subs. VeryShortList is another great daily newsletter. If you can get by the spam filters and establish a strong niche email newsletters are a profitable way to grow a business. Many get huge premiums for ad runs vs. sites/blog

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    Any other music examples?

    Sent from my iPad Nano

  • Krista

    Groupon is amazingly successful, doing a great job — and spawning lots of competition. One of the most formidable competitors is called The Dealmap (http://www.thedealmap.com). It aggregates more than 300,000 deals from hundreds of sites, and also offers daily emails tailored to users' preference. Groupon is just one of the sites it crawls. Robert Scoble interviewed one of the founders recently:
    http://scobleizer.com/2010/06/17/two-location-c
    Worth a watch.

    Krista

  • http://www.jasonlbaptiste.com Jason L. Baptiste

    Aggregation is important here. Yippit does this well too.

  • tixlist

    Good stuff, thanks for shedding more light on the industry. I launched TixList, a daily email service connecting ticket buyers and sellers, six months ago to 25 friends and family members. Since then, it's grown to over 1600 members all via word-of-mouth. Open rates are north of 70% with a recent edition hitting 100%. Email is not dead.

  • MrLoftcraft

    You are talking here about “small” deals that happen on the market. My suggestion is to try and keep up with what Google is doing and how they are slowly creating a monopoly over internet and information. That is really interesting.
    ___________________________________
    Trianz

  • http://www.playplanit.com Laurel

    Interesting. I'd love to read about which email newsletter service is truly the best. I've looked online but haven't found objective reviews.

  • Jim

    Jason – Great insight and commentary on the success companies are having with email.  Two others to add to your growing portfolio list that I recently heard about…1.) FiGuide.com (Retirement)  2.) TriplePulse.com (mens daily fitness motivation)

    Keep up the great work!

  • http://ponte-rolante.com/pontes-rolantes ponte rolante

    yes very good and rewarding.

  • http://www.arabian-affiliate.com/ HomeBusinessGuide

    First i thought the hard part is to start build the list and get subscribers but when I did succeed I found out that the real hard part is to delver and prove to your audience that you are an expert    

  • http://twitter.com/RedTricycleMom jacqui boland

    Hi Jason,

    I can’t believe Red Tricycle isn’t on your radar? Maybe because we’re West Coast based and most of these newsletter companies are based in NY. Well, look out, we’re pedaling your way! We’re the fastest growing email newsletter for moms in 5 cities now (more on the way) and over 350k subs…NY, here we come! Love the article and have passed  it on to many! Ride on! Jacqui Boland, CEO Red Tricycle http://www.redtri.com

  • http://twitter.com/RedTricycleMom jacqui boland

    Hi Jason,

    Red Tricycle isn’t on your radar?
    Maybe because we’re West Coast based and most of these newsletter
    companies are based in NY. Well, look out, we’re pedaling your way!
    We’re the fastest growing email newsletter for moms in 5 cities now
    (more on the way) and over 350k subs…NY, here we come! Love the
    article and have passed  it on to many! Ride on! Jacqui Boland, CEO Red
    Tricycle http://www.redtri.com

  • http://twitter.com/getspotta getspotta

    Don’t forget Spotta – a daily email newsletter for entrepreneurs who want to keep their finger on the pulse of the world’s freshest business ideas and innovations and the trends that underly them. We’re similar to @Springwise – another great daily email newsletter, but cover all the stuff they can’t get to (99% of all the cool ideas, innovations, designs, and trends created in the world every day). There’s so much coming out of the firehose everyday (for us as well, believe me) that any type of high-end, intelligent curation is much appreciated and valuable.

  • http://www.mrmindfit.com/focus/ Business training courses

    Needs also tend to be very individualistic. The glib answer to the
    question “Why do you work?” is “I work for the money”, but this is a
    very crude and incomplete explanation for why people work.

  • http://www.winkslondon.com/ Palma

    I’ll definitely be coming back here to read more blogs in the future, really liked the post.

  • http://www.jfseostudio.com/ Google Rank

    constant contact is still the standard in email marketing I think. I’ve heard of free email programs like mail chimp but haven’t tried it.

  • http://hardik.practutor.com/ Hardik

    It was really great post thanks for guide us. i am interested to purchase book.