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Newsletter Advertising: How to Get Started with Email Ads

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When you think of paid ads, there are likely a few types that pop into your mind: TV commercials, social media ads, and web banner ads. But there’s one viable advertising channel that’s likely been flying under your radar: email and newsletter ads. 

Placing advertisements in emails and newsletters is one of the most direct ways to make contact with new prospects — or generate some extra revenue if you run a large email list. While it does have its quirks, running paid ads in emails can turn a massive ROI.

In this guide to newsletter advertising we’re going to help you get started with email newsletter ads. We’ll go over the benefits, how to get placed through email ad networks, email newsletter advertising rates, and how to get started if you want to start charging for ads in your own newsletters. 

Let’s jump right in!

What are email and newsletter ads?

Email ads and newsletter ads are paid advertisements that are placed inside of email campaigns. At first glance, this definition can sound a bit confusing: aren’t all email campaigns and newsletters advertisements in themselves? How can you place an ad inside an ad?

Thankfully, the concept is pretty simple: businesses that send out email campaigns often have a lot of empty real estate in their emails. To generate some extra revenue, some businesses rent out this space and allow other companies to place advertisements in their emails. Usually, this space is paid for, but it’s possible to find partners that will allow you to advertise in their emails in exchange for allowing them to advertise in yours or some other mutually beneficial arrangement. 

What are the benefits over other advertising channels?

Even though email marketing is often overshadowed by SEO and social media marketing, email is still one of the most effective ways to market your products. In fact, the average ROI on an email campaign is 38 to 1 — for every dollar you spend on email marketing, you’ll get $38 back. 

Related: How to Get Started with Contextual Advertising

When you compare email to other advertising channels, you’ll immediately see one major advantage: it’s direct. You send an email to someone’s inbox, and it appears there (assuming you’ve crafted it to bypass spam filters). With other advertising channels like SEO or social media, you have to hope that the algorithms don’t change overnight and ding your ranking, throwing out all the hard work you’ve done. 

If you’re one for hard stats, consider this: according to Optinmonster, 66% of consumers made a purchase due to email marketing, while only 20% reported they made a purchase after viewing a Facebook ad. 

Furthermore, if you place your ad in a campaign from an influencer or other business with a close connection to their subscribers, the recipients will likely take the advertisement as a personal endorsement, which increases the chances of conversion. 

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What makes for a good campaign?

Email ad space is very different than other channels for one reason: you’re never guaranteed a view. While other types of ads are typically charged by the number of views, clicks, or conversions, email ads are priced based on the number of subscribers the email will be sent to. That means you need to be particularly careful in choosing which lists you want to invest in.

One fatal mistake that many new email marketers make is assuming that a bigger list means a better investment. However, this couldn’t be farther from the truth. In most cases, a very small but highly-engaged list is a far better investment than a massive but indifferent list. 

Think of it like this: how many times have you signed up for a website or free trial, only to forget to uncheck the “send me updates” box? After signing up, how often have you checked those emails? Probably never. However, that website or company can now include you in their subscriber count, even though your inbox is practically worthless to anyone considering advertising on that list. Furthermore, if you did check that email once or twice, how likely would you be to click on an advertisement? Pretty unlikely, right?

Now, consider an alternate scenario: the email list of your favorite musician, blogger, or influencer. When you get an email from a person or brand you’re legitimately invested in, you’re far more likely to read through it and take action. Even though the list might be much smaller, the return can be much greater. 

Once you’ve found an email list that seems promising, you need to consider where your ad will be placed – our preferences is for the top left but different companies will have different placements.

Finally, don’t cut your campaign short. Almost no one opens every single email they get from a brand, no matter how big of a fan they are. Even if the ROI isn’t great after the first email, make sure you stay in the campaign until the end so that you can reach as many subscribers as possible.

How do I find partners?

If you want to get started with email ads, you’re going to need to find some partners with suitable lists. There are two ways to do so: making connections on your own and using email networks. 

Finding partnerships the good old fashioned way can be difficult, but it can also be rewarding. If you know of a business that sends out emails that would suit your brand well, it can’t hurt to send them an email inquiring about purchasing advertising space. One of the benefits of going this route is that if you already like their business, there’s likely some overlap in your audiences. Furthermore, reaching out and building that personal connection can lead to other opportunities down the line. 

However, if you want to streamline your partner search, you can enlist the help of networks. Services like Ampjar and LiveIntent connect like-minded businesses to help them create effective and revenue-boosting campaigns. Ampjar lets users screen email lists for engagement metrics like open and click rates so you can be sure you’re making a good investment. What’s more: Ampjar users can easily host ads as well if they want to make some extra income from their email list. 

How much does it cost?

Email ads are priced on a CPM, or cost per mille (the latin word for thousand), basis. This means that you pay a price per thousand subscribers on the list. Generally, anything under $30 is considered a good email CPM rate. That means that you’d pay $600 for an ad that was sent out to 20,000 subscribers. 

However, it’s also good to look at another metric: the expected CPC, or cost per click. While email ads aren’t priced this way outright, it’s a good idea to calculate the estimated CPC so that you can more accurately gauge how effective the ad will be. To do so, take the number of subscribers and multiply it by the click rate to get the number of expected clicks. Then, divide the CPM (the actual price you’re paying), by the number we just found. Here’s the formula:

CPC = (Total Campaign Cost)/(Subscribers * Click Rate)

So, for a campaign with a $20 CPM; 50,000 subscribers; and an 8% click rate, we’d do the following:

  1. 50,000 * 0.08 = 4,000
  2. (50,000/1,000) * 20 = 1,000
  3. 4,000/1,000 = 4

According to these calculations, the expected CPC for this ad would be $4. 

Designing your ads

Once you’ve locked down a partnership and figured out your costs, it’s time to get creative. Here are some tips and examples to help get your creative juices flowing.

Best practices

When it comes to designing ads for email, marketers often make the mistake of thinking they should apply the same techniques they use with web ads. However, email ads are an entirely different beast. Banner ads are made to stand out visually through the use of eye-catching graphics, but when someone is reading an email, they’re not concentrating on visuals, they’re concentrating on the text.

When making an ad for email, it’s best to focus on the copy. Sure, you can jazz it up a little with some nice fonts, colors, and a background, but don’t go too crazy. By making your ad blend in with the rest of the email, it will make it seem more like part of the email than an advertisement. 

To build off that, try to include keywords that match the email’s subject line. Your goal here is solely to get subscribers to click your ad. Once they’ve done so, you can use your pre-existing marketing materials to get them to convert. 

Examples

Let’s take a look at a couple of email ads. First up, we have an email from Thrillist that features an AT&T ad right at the top:

This is an example of great positioning — as soon as you start reading the newsletter, you’ll see the ad. What’s more, because of its focus on text, it almost appears like a headline. That said, one potential problem is that Thrillist is a food and travel blog, and AT&T isn’t necessarily something that subscribers would be interested in.

This next ad, however, did a great job of finding a partnership that has a very high likelihood of engaging. Take a look:

This is an ad placed in an email from vegan magazine VegNews. The ad perfectly blends in with the email and intrigues the reader with its text, “best snack of the year.” If you’re subscribed to VegNews’s email list, you’re likely interested in vegan snacks, so placing an ad informing subscribers of the year’s best rated vegan snack right above the recipe section is a perfect conversion setup. 

Selling ad space

Every email and newsletter ad campaign has two sides: the advertiser and the supplier. If you’re not interested in placing your ads in someone else’s emails, you may still want to rent out your email real estate. Here’s what you need to know if you’re considering going down that route. 

Should I sell ad space?

The best way to get an objective view on whether you should sell ad space is to sit on the other side of the table and think about whether you’d want to pay for an email campaign on your list. A good candidate should have:

  • An engaged subscriber base
  • Subscribers that double opted in
  • A high click rate
  • A clear niche
  • At least 2,500 subscribers (ideally 10,000 or more)

If you tick these boxes, you’d probably do well renting out ad space. However, you do need to consider whether you want to have another business’s ads placed in your emails. Doing so can undermine your credibility, so make sure you discuss this with your team before pulling the trigger. If you do decide to run ads, you’ll need to make sure that whatever ads you run won’t alienate your subscribers.

How much should I charge?

Email ad space is typically charged for on a CPM basis. However, figuring out how to set your CPM can be a bit difficult. To come up with a competitive CPM, start by taking a look at the number of subscribers you have, your click rate, and your open rate. From there, compare your rates to other businesses in your industry to see how you stack up. As we mentioned, you’ll generally want to stay below $30 CPM, so use that as a high-end price tag to work around. 

Alternatively, you can charge on a CPL, or cost per lead, basis. In this case, the advertiser will only pay when a subscriber signs up for their service or email list, and you’ll typically be able to charge more per lead than you would per thousand subscribers. This type of pricing is often popular among B2B services due to the long sale incubation period. 

If you think space in your advertiser’s emails is worth more than the fee they can pay, you can strike up an affiliate deal in which you both host each other’s ads free or charge. You can also charge a one time placement fee, but this will be based on your subscriber count and click rates anyway, so there’s not much benefit over a CPM pricing model.

Overall, CPM is the most popular email pricing model for a reason: it’s easy to measure and understand. In most cases, you should defer to charging CPM. 

Whether you’re an advertiser or an email list owner, newsletter advertisements can be a great revenue generator on both sides. As always, if you’d like to learn more about email ads and newsletter ads, get in touch with us at hello@ampjar.com. We’re always happy to help!

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