Bustle wants to turn its newsletters into an 8-figure business, in part, with a rewards program

The header image shows an illustration of a person holding a flag surrounded by a group of people and newspapers strewn below them.

Right now the conversations around newsletters are revolving around which journalist recently joined Substack and which hotshot business newsletter was recently acquired. But the more the conversation points to revenue, the more publishers are strategizing for how to get more skin in the email game.

While ad rates on other digital platforms tumbled, newsletter CPMs remaining remarkably consistent throughout the pandemic. And there is evidence of a significant appetite for paid newsletters among consumers, thanks to Substack and Revue popularizing the medium.

Publishers, like Bustle Digital Group, are now priming their newsletter strategies to win a space in readers’ inboxes while subsequently monetizing that position with interested advertisers.

BDG currently has a total subscriber list of 2 million across 14 newsletters. Eight out of the publisher’s nine brands have at least one main newsletter while some brands, like Inverse and The Zoe Report, have branched out into smaller, subject-specific offerings. Bustle, the only brand without a newsletter, will launch by March 31, said Wesley Bonner, the company’s vp of marketing and audience development.

By the end of 2021, however, Bonner said the team wants to attract 10 million subscribers across all of the brands’ newsletters and increase the newsletter business from a seven-figure revenue stream to an eight-figure revenue stream year-over-year.

In January, the average subscriber growth rate for the newsletters was 20% month-over-month, Bonner said, with some smaller publications receiving closer to 50% growth.

“It’s a realistic goal if you are focused solely on that and it is your number one priority,” said Kerel Cooper, the CMO of Liveintent, who pointed to success stories like Morning Brew, which grew the subscriber base for one email product by 1 million in 2019.

To grow that quickly, BDG is using both paid acquisition strategies like social media marketing to the company’s collective 61 million followers and advertising in other publishers’ newsletters. It is also relying on organic strategies like onsite promotion and releasing exclusive content in the newsletters.

But as the publisher seeks growth, losing engagement can be a real concern.

Currently, the average open rate across the company’s 14 newsletters is 20% with the main newsletter for Inverse, Inverse Daily, being the most engaged with newsletter at a 27%, according to the company.

“It’s very possible that their open rate could go from 20% to 5%,” said Dan Oshinsky, a consultant at Inbox Collective, who advised BDG to run onboarding and reactivation campaigns to retain high quality subscribers.

The newsletters currently rely on direct advertising for about 70% of the business’s revenue, Bonner said, with the remaining 30% coming from affiliate sales.

Bonner declined to disclose BDG’s newsletter CPMs.

Oshinsky said that those rates can really run the gamut with total list size pricing running anywhere from $5 to $25 CPMs. However, publishers that offer more native advertising in their newsletters and less programmatic — and also have strong open rates — will sometimes base CPMs on the open rate list size, which could be more financially appealing because those rates tend to be higher at $10 to $40 CPMs.

In June, three months into the pandemic, Digiday conducted a survey of 127 publishing executives, 74% of whom reported seeing ad CPMs drop as a result of the crisis. Even earlier in March, Digiday reported that programmatic rates were down an average of 10 to 20% globally.

BDG’s newsletter CPMs stayed consistent throughout that period, Bonner said, though noted that there was a dip in number of deals signed, but both Cooper and Oshinsky agreed that they saw CPMs remain steady during 2020.

Bonner added that one strategy for encouraging engagement, and thus higher CPMs, is Inverse’s proprietary rewards program that is currently only operating within Inverse’s newsletters. It acts as a “motivational incentive” for subscribers to track how many days in a row they open the newsletter, Bonner said. If they open it every day or a month, for example, they are then entered to win a prize, often from one of the newsletter’s sponsors.

“It’s a reward in the truest sense for participating and being a part of the community,” Bonner said. “We’re not trying to get them to subscribe to win,” like the traditional sweepstakes model. The idea is to rollout this proprietary program to the other brands this year, as well as launch a referral program.

Oshinsky said that while a rewards system can definitely help increase open rates, being able to translate that engagement to proof of a base of “super users” may not be as straightforward when dealing with informed advertisers.

“Publishers are always trying to sell advertisers that they have a highly engaged audience,” but while “opening a newsletter is everyday is unusual, it’s not The Da Vinci Code that they’re solving. They are opening an email,” Oshinsky said.

Based on what Oshinsky has seen with the publishers he works with, a “best-in-class” unique open rate is 30% or above. A 20% average open rate is not bad, he added, but he said that while BDG focuses on growing its total list size, it will be important to monitor that engagement does not drop off as a side effect of new subscriptions. 

“All of our engagements are growing and that’s kind of difficult to do when you are also growing the list at the rate we are,” Bonner said.


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