Newsletter-Only Businesses Need to Start Diversifying

Thousands of media entrepreneurs have built businesses entirely around newsletters in the past five years, drawn by their direct-to-audience model, relative ease of acquiring subscribers and the predictable ad revenue. But those who don’t diversify beyond newsletter advertising are heading for trouble.

At its core, a newsletter ad business is just a banner ad business with some text. There’s nothing inherently wrong with this, but we’re about to see the same pattern that played out with website banner ads: a race to the bottom on CPMs. The warning signs are already here. As more supply comes to market—loads of newsletters launching with easy growth mechanisms—advertisers will have more choice on where to spend.

And since there’s very little personalization in most newsletters, it’s purely a numbers game. If your newsletter has 100,000 subscribers, the only way to make more money from said newsletter is to grow to 200,000. And then bigger. With a proliferation of co-registration programs, these lists are getting artificially inflated with promotion from ad network-delivered ads.

The outcome? CPMs can only go down. The only way to sustain the same revenue is to keep growing bigger. It’s harder to keep CPMs high when your list is bigger, so it becomes a spiral down. Offering untargeted banner ads—even in newsletters—is a bad place to be.

Following on all of that, performance in the inbox is weakening even if your numbers say otherwise. More and more clicks in the inbox are from bots. Omeda did some research that found that close to 65% of all clicks in newsletters were bots—and it’s rising.

These bots are completely normal. Major corporations and government entities use security systems to click every link to test for viruses, malware or other nefarious problems. This is meant to protect the user, but it also distorts your data. Let’s say you’re seeing a 1.5% CTR on your ads. If 65% are bots, that means you’re actually only seeing a 0.53% CTR.

This deteriorating performance creates a double bind for newsletter publishers. Either compress ad prices to keep performance marketers happy, or double down on brand advertisers with quality audience storytelling. The latter is especially risky as economic headwinds strengthen in 2025—brand advertising is typically the first budget item cut in a downturn, well before staff reductions.

Then there’s the investor side of things. The reality is, ads-only businesses are just not as attractive to investors. Collingwood has a Marketing Services Maturity Model report and in it, they write:

The difference in multiples offered is stark. B2B digital media ranges are 4-6x EBITDA, and can struggle to attract premium investors; however, highly desirable marketing services models can command 8x EBITDA and upwards.

Marketing services is still pulling from advertising and market budgets, but the way you deliver against those budgets can materially impact the amount of money you make when the time comes to sell.

The good news? There’s still time to adapt. Smart newsletter publishers are already following a clear playbook to diversify their revenue. Here’s how to do it, step by step.

Stage 1: Unlock your audience data

You need to gather data about your audience and have the ability to target them based on that data. The goal is to create specific segments that marketing partners can pay to reach. For AMO, those segments could be defined in a few ways:

• Seniority of the audience (C-suite vs. directors, etc)
• What department they’re in (sales, audience, product, editorial, etc)
• Types of products (subscription, marketing services, events)
• Types of publications (B2B, scale consumer, enthusiast consumer, etc)

Ultimately, you want to be able to tell a marketing partner that if they spend, they’ll get in front of their target buyer. Yes, the media industry is already pretty niche, but if a vendor sells subscription management software, they’ll want to put more of their spend against that particular segment.

Stage 2: Expand your marketing products

Now that you have the right data, you want to focus on building a suite of potential products for marketers to choose from. For AMO, that means sponsored content and webinars. This has allowed us to grow marketing revenue by more than double. You can offer any number of other marketing solutions including:

• Audience extension where you take your first-party data and target off-platform.
• Content syndication where you promote something they’ve written.
• Lead gen campaigns where you promote a white paper and get paid to write it.

And the thing is, you don’t have to get rid of the newsletter sponsorship business. Brand marketing is an integral part of the funnel, so you want to offer this on top of the new products that you bring to market.

Stage 3: Get face-to-face

In the first two stages, you’ll have gone from a purely newsletter business to one that is more marketing services-oriented. However, I’d argue you can go even farther.

If AMO is the trajectory that other newsletters can take, the big inflection point came with launching an event. We did that in 2023 and in the second year, the AMO Summit became 50% of our revenue—and was very profitable. The core benefit here is that it unlocks a different kind of sponsorship budget—bigger companies tend to have events teams—and it also unlocks a reader revenue component with ticket sales.

What makes an event useful is that it represents a crucial test of audience loyalty. If you can convince 100-200 people who only know you through your newsletter to fly to a city and sit in the audience, that proves brand affinity. I had a colleague once who said the only thing he cared about was getting the user to pull out their credit card. That was how he judged a brand’s strength. An event does that.

Newsletter operators face a stark choice: evolve beyond the inbox or watch your business slowly erode. The path forward is clear—transform from pure sponsorship to multi-channel audience monetization. Your newsletter brought readers in, but getting them to engage with down funnel marketing materials or open their wallets for an event will cement your position as a lasting media brand.