Newsletters are something we haven’t touched on much at Performancing, and I think itâ€™s high time we did. Why? Well, first of all, theyâ€™re a great way to establish an emotional connection with readers; theyâ€™re also a good way to get users to come back to your site.
But speaking as an investor in blogs, I can also tell you that a targeted newsletter is one of the few things that really gets me excited when a siteâ€™s for sale.
And that is the subject of this post. Actually a whole other post (or series of posts) could be written about how underrated newsletters are to promote a blog, maintain reader loyalty, etc. But today I find that vein of thought boring. I want to talk money!
To explain my point, Iâ€™m going to use an example site: The RFID Gazette. Itâ€™s one of my original blogs, and holds a special place in my heart. Not because I am sentimental. Not because it makes a ton of money (I have sites that earn more). No, I especially love this site because of its long term value: it is worth a lot more than just a standard multiple of its earnings, to a particular kind of buyer. The reason? The mailing list of course.
Geez, Iâ€™m at the fifth paragraph already and I havenâ€™t made a case for why yet. Okie, here we go, in bullet form of course:
- RFID is a fairly small B2B niche â€“ there arenâ€™t very many media publications on the topic in which to advertise. The advertising opportunities that do exist are pretty pricey.
- RFID products (software and hardware) are big $$$ products. One contract in this industry can easily be worth 5, 6 or even 7 figures.
- A mailing list of several thousand people in the industry certainly contains many people who can influence/make buying decisions at their company.
Thus the mailing list could give any new company in the RFID field instant access to their target market, and could potentially lead to many sales contracts. In other words: buying the mailing list along with this blog could help a company in this field achieve strategic objectives, not just act as a revenue stream in and of itself. I’ll repeat: When investors pay a PREMIUM to acquire a business or asset, they are usually not just after a revenue stream — they are after a business or asset helps them achieve a strategic objective.
Not sold yet? How about this little figure: $500 CPM is not an unheard-of rate to advertise in newsletters in many B2B niches. And thatâ€™s to reach that audience once, in one newsletter issue. In that light, what would it be worth to some companies to own the list, and to be able to leverage it to establish long term visibility and relationships with the people on it?
Now Iâ€™ll be the first to admit that RFID is an extreme case, and a newsletter may not double the value of your blog, depending on the niche youâ€™re in. But it will in a lot of niches â€“ particularly those that are at least moderately profitable, and moderately narrow (i.e. â€œdigital camerasâ€ is a moderately narrow blog topic, â€œtechnologyâ€ is not). A few other ways a newsletter will make your blog’s stock go up:
- It gives your site another non-search-engine traffic source, thus lowering the risk to a potential buyer.
- It can carry advertisements in and of itself and thus act as a revenue stream.
So what are you waiting for… go get a newsletter!
P.S. if you do, don’t go cheap, get a real solution. I can recommend Savicom and ConstantContact.
P.P.S. my favorite converting positions for a newsletter signup box are the top of a sidebar, and under the posts on permalink pages.
P.P.P.S. For the record, the RFID Gazette isn’t for sale, and I’m not using this post as a vehicle to pump it upâ€¦ but I like the way you think, cynical readers!