Editor’s Note: This article was originally published by Web Marketing Today. Practical Ecommerce acquired Web Marketing Today in 2012. In 2016, we merged the two sites, leaving Practical Ecommerce as the successor.
“How much should I charge for ads in my e-mail newsletter, especially a narrowly-targeted newsletter where it’s pretty obvious who the interested advertisers would be.” — Charlie Darling
The rate you charge for advertising depends on the readers you attract. For example, a general “thought for the day” newsletter might charge advertisers $3 to $10 CPM (cost per thousand subscribers), since their readership is pretty diverse. A more targeted readership of a quilters’ newsletter or parenting tips newsletter might fetch $15 to $25 CPM. When you move from a consumer orientation to a business-to-business (B2B) readership, the rate goes up; $30 to $60 CPM is more typical. Business people buy for different reasons than consumers, and are used to making larger expenditures. The most targeted B2B newsletters read only physicians might charge $80 to $100 CPM for ads from drug companies. Newsletters for investors or golf players might be able to command $60 to $75 CPM, since these groups are known to have greater discretionary spending power.
When your list is small, though, consider selling ads for a flat-fee. It’s the larger companies that are used to purchasing ads on a CPM basis, but they won’t show much interest in a tiny list. Smaller businesses would be more comfortable paying $50 per issue for an ad. After all, if your list is 3,000 subscribers, it’s easier to sell a $30 per issue ad than a $10 CPM ad. When you get to 30,000 and are growing rapidly, however, move to a CPM model.