How (and when) to monetize your newsletter

Newsletters are my favorite medium. I subscribe to quite a few of them and I've got two of my own. To me, making a living off of a newsletter would be a dream.

One of my newsletters is monetized (barely) through a paid tier. The other, I hope to monetize via sponsors shortly. Needless to say, I've been digging into how indie hackers are successfully monetizing their newsletters — here's what I've found.

Newsletter monetization methods

There are a bunch of ways to monetize. Let's start with the most well-known.

Sponsors

Sponsors pay to essentially get their logos at the top of your newsletter for a week, along with whatever it is that they want to share about their product, and usually, a "this issue is sponsored by…" tag. You might also mention them again in the middle or at the end.

A few tips:

• Don't take just any old sponsor. You want sponsors who will actually benefit from being a sponsor — that way, they'll keep coming back. And you want sponsors that your readers will actually care about and appreciate.
• Keep track of metrics such as open rate, sponsor clicks, and if possible, try to understand your sponsors' ROI so that you can share that with other potential sponsors.
• Add a page for sponsors on your website. On the page, mention your subscriber count, open rate, click rate, reader locations and other demographic info you have on them, newsletter frequency, pricing, and how many slots are available per issue. Make it easy for them.
• Ask for sponsors at the end of your newsletter — your readers may want to participate.
• Trade sponsorships with other newsletters on days when you don't have sponsors lined up.

A few places to find sponsorships:

• Swapstack by @learnwithvidya
• Paved
• Sponsorgap
• Your subscribers

When to monetize:
You'll need a good number of subscribers and an excellent open rate before anyone is interested. Once you've got about 1,000 subscribers, it's probably a good time to start looking.

High-touch ads

By high-touch, I mean ads that require some back-and-forth with the advertiser (as opposed to programmatic ads, which I'll include below). These are very similar to sponsorships. The only real differences are the placement (ads won't usually be at the top), the price (lower), the number of slots that you can sell (more), and often the amount of design required.

If you've got some design chops, you can create the ads for them (thus keeping it in line with your branding and aesthetic). Otherwise, you'll just take what they give you. But provide them with guidelines.

From what I've heard on IH, most newsletters between 1,000 and 10,000 subscribers charge between $20 and $50 per slot.

A few tips:

• Discount bulk orders of ads. It's worth it.
• Keep track of metrics such as open rate, sponsor clicks.
• These companies are paying to get inside your subscribers' inboxes. Treat those inboxes with respect by choosing advertisers that will actually be of interest.
• Treat ads like e-commerce and sell the slots on your website. This will reduce your workload. On the page, mention your subscriber count, open rate, click rate, reader locations and other demographic info you have on them, newsletter frequency, pricing, and how many slots are available per issue. Share what ads should look like and what you need from them — image, title, URL, quick info about your product, and then their description of the product/offer. Give them a character count. Including a case study or other social proof couldn't hurt either.
• In each issue, make it clear what is an ad and what isn't.
• Consider a "classifieds" section where you can sell cheaper add space with just enough room for one sentence.
• Increase prices as your subscriber count increases. Also, as you start to get better at placing the ads, clicks and ROI should increase too, which means your price can go up. The more niche your newsletter, the higher the rates you can charge.

A few places to find advertisers:

• Sponsaurus by @harrisonbroadbent is an end-to-end ad management platform. It also has a pretty awesome name IMO.
• Ad Booking System by @falakdigital is a cheap Google sheet that you can use to schedule ads.
• Hecto: Ad marketplace
• Your subscribers

I've also found this ad calculator handy. Maybe you will too.

When to monetize:
You'll need enough subscribers and enough opens/clicks to actually make your offer appealing to advertisers.

Programmatic ads

While sponsorships and programmatic ads can take a lot of back-and-forth with potential advertisers, programmatic ads just get plugged in with a line of HTML. You won't have much control over what is displayed, so you won't be able to optimize the ads for your users. And you won't make as much money. But this can work when you're starting out and you don't have enough subscribers to get sponsors.

A few tips:

• As always, indicate that it's paid content.
• Use this only as a stopgap until you can get sponsors.
• If I'm being honest, probably don't use these at all. They cheapen the brand IMO.

A few places to find ads:

• Paved: Their ads seem to be well-targeted.
• PostApex
• InboxAds
• Kevel: These seem to be well-targeted too.
• Passendo

When to monetize:
If you choose to go this route, you can and should start immediately.

Premium and freemium

Charging a subscription for your newsletter will get you recurring revenue, which is fantastic. According to Substack, 5-10% of free subscribers will become paid subscribers. In my experience, that's a little high. And even at 5%, you'll need a lot of subscribers to make a significant amount of money from it.

Most premium newsletters charge $5 and $10 per month. I priced mine at $8 but I think I overshot it a bit. I'm considering moving it down to $5.

A few tips:

• Ask yourself, "Will people actually pay for this?" And be really really honest with yourself.
• Your best chance for getting paid readers is if your newsletter helps them make money.
• Offer a discounted yearly price to decrease churn.
• Some folks add other offers like swag, ebooks, etc. to their paid tiers to sweeten the deal.
• If you want to be able to take time off, specify how many issues paid subscribers can expect per year. Alternatively, Substack allows you to pause subscriptions.

When to monetize:
You'll want to have a good number of free subscribers before you launch the paid tier. 1,000 is the go-to number. But don't wait too long, as the transition to paid can be a little painful in the way of unsubscribes.

Affiliate deals

Mention a product in your newsletter, usually along with a CTA, and get paid for every click on that affiliate link. The best part is that there's no minimum number of subscribers.

In some cases, all you'll have to do is sign up and they'll give you an affiliate link lickety-split. But if they aren't set up for that, then it may require a little more legwork.

A few tips:

• It's very important that you disclose that it is an affiliate relationship — here are the official guidelines on that.
• If you're signing up with a no-touch partner (the kind where it just spits out a link for you), make sure that they allow their links in "non-public" places. Some don't, and an inbox is a non-public place.
• Promote stuff that you actually believe in, otherwise you might degrade your audience's trust in your opinions.
• This is not going to work unless you work with affiliates that your readers will actually care about.

A few places to find affiliates:

• Impact
• PartnerStack
• Cold outreach
• Google. Here's how

When to monetize:
Since you're just taking a commission, there's no risk to the affiliate, so you can start doing this from day one — you don't need to have a certain number of subscribers or wait until you can show off a stellar open rate.

Sales funnel for products/services

If you've got a product other than your newsletter, as many of us do, then you can also make money by promoting that.

A few tips:

• Don't be too salesy.
• Don't promote it frequently — be strategic with your mentions.
• A simple link in your email signature can get a reader to check out what you do
• Provide a ton of value upfront for free before offering anything.
• If you've got a sponsorship section at the top of your email, put your own product in there whenever you don't have a sponsor lined up.
• If you're going so far as to create a sales funnel, you'll generally want to add a welcome sequence in addition to the newsletter itself. The welcome sequence provides a ton of value upfront — sort of like an email course.

A few other product options:

• If you've got superfans, you could try to sell merch.
• Take your archives and turn them into ebooks
• Sell single issues

When to monetize:
You can get started on this right front the start. But as I said, don't do it too frequently.

Paid Memberships/communities

Here's an interesting spin. You can make the newsletter a perk within a paid community. So folks pay a subscription to be a member of the community, and they get the newsletter (among other things like courses, events, forums, discounts, etc.) as a result.

Since the newsletter isn't the primary focus (and much of the community content will either be evergreen or user-generated), communities require less writing. But they do require a lot of engagement.

Folks usually charge somewhere around the same price as you might expect from a paid newsletter ($5-$10/mo), but it varies widely.

This is probably easiest if you've already got a community and you want to add a newsletter, not the other way around — community building is a whole thing. @rosiesherry is a master of it, so check out Rosieland if you'd like to learn more.

Donations

And of course, there are donations. This option usually isn't going to pay the bills, but it can be a good option if your goal is to build a list as quickly as possible without monetization getting in the way.

A few tools for accepting donations:

• Buy Me a Coffee
• Ko-fi
• Flattr
• Patreon

My two cents

Start with donations. Maybe you'll be able to pay off a couple of coffees as you build your newsletter. Once you get to 1,000 subscribers, launch a paid tier, and get sponsorships and high-touch ads to monetize your free tier. If you can't find anyone interested yet, try affiliates until you have enough momentum to interest sponsors.

---

What did I miss?

---

Subscribe for more how-tos, tips, and case studies! 👇