📈 When You Should Run Paid Ads For Your Newsletter

Welcome to BetterLetter 🫡 

In today’s email, you’ll learn:

• 💰️ The 3 main use cases for when you should use paid ads to grow your newsletter

• 🏙️ 4 takeaways from the Newsletter Conference in NYC, including why you shouldn’t always listen to your audience

Helpful Links 🔗 

• 💸 How this newsletter grew from $0 to $400k in 1 year (link)

• 📩 How a niche VC firm can replicate Bullet Pitch’s newsletter success (link)

• 🤔 The surprising number of emails it takes for someone to actually buy (link)

• 👀 My favorite newsletter-related follow on X these days (link)

• 🐝 The best ESP in the game: Get 20% off of a beehiiv subscription for 3 months (link)*

• ♻️ Get paid to make money: Get a $100 bonus if you make $100 in paid referrals within 2 months when you sign up for Sparkloop (link)*

_{*This is an affiliate link}

Let’s dive in.

I’ve seen this question pop up all over Twitter and the newsletter communities.

Today, let’s answer it.

3 Use Cases for When You Should Run Paid Ads 📈 

Growing your newsletter organically works, but it can be a grind (and has a ceiling).

SEO is worthwhile, but a longer-term play.

That’s why paid ads are the top channel the biggest newsletters leverage to fuel most of their subscriber growth, including ones like:

• Morning Brew

• 1440 Media

• The Hustle

• Milk Road

• The Gist

• Chartr

Here are 3 common scenarios where running paid ads to grow your newsletter makes sense:

1. To validate an idea 🤔 

2. To play the long game 🚀 

3. To profit now 💰️

Let’s break each of these down.

1/ To validate an idea 🤔 

This use case is typically most relevant for larger brands who want to launch or grow a newsletter.

When you have the budget, you can use paid ads to speed up the process of learning whether or not a newsletter premise is actually valuable.

Using paid ads to validate a newsletter idea will help you:

• Save money + effort: You can do this pre-launch before you commit any time and money into writing an ongoing newsletter

• Get answers quickly: You can gather data from the market quickly, which means you can iterate and test more ideas in less time. This increases your chances of finding a winning value proposition.

Serial entrepreneurs do this all the time.

They come up with an idea for a business.

But before investing time into it, they validate the idea.

Here’s how entrepreneurs do it: they run paid ads to a landing page for a product that doesn’t actually exist yet.

Then:

• They measure how many people go to the checkout page, OR

• They accept payments (and refund people immediately, telling them it was a test)

For newsletters, you can do the same thing.

But instead of looking for purchases, the metric you want to measure are subscribers.

In practice, here’s how to do it:

1. Craft a simple landing page on beehiiv or Typedream (a landing page is the perfect forcing function for you to articulate the value proposition in as few words as possible)

2. Run FB ads directing your target audience to your landing page: the ad creative should quickly articulate the same core value proposition described on the landing page (here are video ad ideas and static image ad ideas)

3. Measure the ad click-through-rate, landing page conversion rate and cost per acquisition. Your goals should be at least:

   • Ad CTR: > 1.5%

   • Landing page CVR: > 40%

   • CPA: < $2-$3

4. Iterate and repeat until you’re hitting those benchmarks (CPA being most important)

This use case for paid ads makes the most sense when:

• A creator or a brand has an idea for a newsletter and wants to gauge whether or not there’s an audience for it

• You have more money than time, and want data quickly

Note: If you’re short on money but have plenty of time, you can validate your value proposition organically. It’ll just take longer. Validation is tied to traffic and eyeballs, not time.

2/ To play the long game 🚀 

This use case applies to both larger brands and people building personal brands or solo businesses.

Newsletters can do more than just generate sales in the short term (we’ll talk more about this in #3).

They’re a way to build a long-term relationship with people who, over time, become raving fans of you and your work.

So use them to play the long game.

Examples of this in action:

• Tyler Denk (founder of beehiiv) shared monthly investor updates from day 1, which helped their team generate inbound requests to invest in their company and raise millions of dollars.

• He also writes a personal newsletter (Big Desk Energy), which played a role in beehiiv crowdfunding over $2M from users within a few hours of launching on WeFunder.

• Cam Houser used his newsletter to build a brand around innovation and using video to sell ideas. When he wanted his next role, he used his newsletter audience to create dozens of inbound job opportunities within weeks.

The point? 

Building a brand (corporate or personal) is a powerful way to open future doors.

When you become trusted, liked and valuable to people over time (your newsletter should be accomplishing that) -

- it’s like depositing money in a bank account you just haven’t withdrawn from.

I like the strategy James at Sweet Fish Media (whose post I shared above) advises larger companies to use 👇️ 

He recommends building 3 brands:

1. Media Brand: For growth and nurturing. Create value and serve the majority who aren't ready to buy…yet.

2. Personal Brands: For connection. The human touch. Authentic, expert stories that resonate on a personal level.

3. Corporate Brand: For conversion. For the 3% who are ready to buy, make the sell.

Play the long game 🚀 

Media brand for growth. Personal brands for connection. Corporate brand for conversion.

→ Larger companies should use a newsletter (or many) to execute #1. Creators can can execute all 3 with a single newsletter.

3/ To profit now 💰️ 

This one is obvious.

For most of you reading this, your newsletter is a means of driving profit. At least, it should be.

If your newsletter is profitable enough, paid acquisition is a no brainer.

What is “profitable enough”?

Classic answer - it depends.

It depends on your goals, LTV (lifetime value of a subscriber), your desired payback period and how much it costs to acquire subscribers.

If you want a rough idea, here’s a back-of-the-napkin way to answer the question: “Should I run paid ads?”

Take your subscriber count and multiply it by 5.

Have you made at least that many dollars in the past 12 months from your newsletter audience?

• If no, that's what you should work on.

• If yes..read on.

You should definitely be growing your audience with paid ads.

Why?

Chances are, you could be making more money without having to change anything else about your business.

Here's what I mean: 

(some terms, the math + an example) 

• CPA (cost per acquisition): How much $ you spend to acquire a new email subscriber

• LTV (lifetime value of a subscriber): How much $ you make on average per subscriber during their lifespan of being a subscriber

A general rule of thumb is that you want your LTV:CAC ratio to be 3:1 or higher.

I think most creators and brands can reach a 5:1 ratio or higher (which is why I had you multiply your sub count by 5).

If you do, you have a repeatable model. The more you grow your audience, the more money you will make (assuming you have the systems in place to fulfill new sales).

So for example, if: 

• You have 1000 subs

• You made $3k in the last 12 months

• The average subscriber stays subscribed for 1 year

Your LTV is $3.

And if you acquire a new subscriber via paid ads for $1, your LTV:CAC ratio is 3:1.

Here's a real-life example to demonstrate:

Frank left his day job a year ago to start a fitness coaching business.

He has 2000 email subscribers he got organically via IG.

He sells 2 things:

1. A course for $500

2. A 1:1 coaching package for $4,000

This year, he sold:

• 25 courses ($500 × 25 = $12.5k). This is a 1.2% conversion rate.

• 15 coaching packages ($4k x 15 = $60k) This is only a 0.70% conversion rate.

…for a total of $72,500 in sales.

LTV = $72.5k/2000 subscribers = $36 

(it’s not uncommon for it to be this high when you sell high-ticket services)

This means Frank can spend up to $7 ($35 ÷ 5) to acquire a new subscriber, and he’ll still have above a 5:1 LTV:CAC ratio.

Realistically, Frank can expect to acquire new subscribers for $2-$3. Which would mean his LTV:CAC ratio would be closer to 11:1.

If Frank doubles his newsletter to 4000 subscribers paying even $5 to acquire each new subscriber (very conservative)..

$5 × 2000 new subscribers = $10k cost

..he’ll double his business, selling $145,000 in courses + coaching packages.

Subtract the $10k spent to double the newsletter and Frank will end the year with $135k in profit.

The best part? 

The ads are growing his audience in the background while he spends his time providing value and serving his clients.

Not on a content treadmill constantly on social media.

Punchlines:

→ Paid ads are great for scaling a business model that’s already working. It can be like pouring fuel on a fire that’s already lit.

→ If the LTV of your subscribers is $10 or more, you can afford to spend $2 to acquire new subscribers via paid ads

So, run paid ads to:

1. To validate an idea 🤔 

2. To play the long game 🚀 

3. To profit now 💰️

4 Quick Takeaways From the Newsletter Conference

1. Memes: Test out paid partnerships with industry meme pages to grow your newsletter. Aine from International Intrigue was able to get low CPAs this way.

   • Pros: Potentially lower CPAs

   • Cons: This takes trial an error, spending money and similar to organic channels, has a lower ceiling than paid ads.

2. Collect more than just email addresses:

   • Use a post-subscribe survey to collect first name, company name and anything else that’s critical for you or your advertisers to know.

   • With the email address, name and company name, you can enrich that data using tools like Apollo.

3. Ship fast: 

   • If you have an idea, test it.

   • If something isn’t working, don’t be afraid to sunset it (read: stop doing stuff that clearly isn’t working)

4. Don’t make decisions based on only what your audience tells you. Sometimes people tell you they want one thing, but their actions say otherwise. Don’t fall into the trap of only “creating exactly what your subscribers ask for.”

   • Use these three inputs to guide your strategy:

     • What YOU believe your audience wants/needs (what you think)

     • What your audience tells you they want/need (what they say)

     • What they actually do (what they do)

   • Actions speak louder than words. Like Ford said, “If I had asked people what they wanted, they would have said faster horses.”

That’s it for today.

👉️ Here’s a summary of the takeaways:

When you should use paid ads for your newsletter:

• To validate a newsletter value proposition 🤔 

  • Build a landing page and drive your ideal audience to it

  • Measure CTR, conversion rate, CPA

• To play the long game and build a brand 🚀 

  • If you’re a larger company, build:

    • Media brand: For growth and trust building

    • Personal brands: For connection and trust building

    • Corporate brand: For conversion

  • If you’re a creator, do all three within your newsletter.

• To profit now 💰️ 

  • When you have a business model that is working for you, scale it using paid ads

• Newsletter Conference takeaways 📨 

  • Partner with industry meme pages, or better yet, build your own 👀 

  • Collect 1st party data and enrich it with tools like Apollo

  • Ship fast, learn and iterate

  • Trust the combination of your gut and your audience

There you have it.

Go get to work 🫡 

Until next time,

Isaac + Kieran ✌️

P.S. When you’re ready to grow your newsletter…

Let us do it for you. We help creators, brands and ministries grow their newsletters so they can drive more sales and donations. If you want us to grow your newsletter for you and are ready to invest at least $2k/month on ads, book a call with us here.