Substack

AI bros make $4.20, I make $0.36, it’s still a win

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A couple weeks ago, I read a mostly mindboggling email from Scott Oldford, who has been buying up newsletters and newsletter-related services.

Scott’s email was all about about an AI newsletter he bought recently for some undisclosed sum.

The acquired newsletter has 22,000 subscribers. Its creators have been running Facebook ads to get new readers, and paying $1.40 per new reader.

So far, so grim. But please pay attention to the next fact, because it’s remarkable:

That AI newsletter was making 3x that ad spend right at signup time, right when people opted in, without selling anything.

Did that last line make you pull down your glasses to the tip of your nose, and look at me with suspicion? It should have.

Direct response logic says that if you can acquire a customer at breakeven or slight loss, you’re doing well.

Granted, these newsletter subscribers aren’t necessarily customers, but they are a list of people who are potential customers, and they are certainly valuable as an audience in other ways.

Now let me repeat the rather shocking point again:

These AI bros are building that list of subscribers, not at a slight loss, not at cost, but actually getting paid 3x what they put in to acquire each new reader.

What tricky flamingos. How are they doing it?

Well, that’s my offer for you today. It’s called Sparkloop. It’s basically a network of coregistration partners.

If you’ve ever signed up for a Substack newsletter, you’ve seen this approach in action. Once you opt in, a window of newsletter recommendations pops up. “Would you like some more, sir?” it says. And there on the plate are 3 or 4 or 20 different other newsletters, which you can opt into with just a click o’ the button.

That’s what Sparkloop does as well, except it’s not limited to Substack newsletters only, but it can be integrated on almost any platform.

That’s how those AI bros were making 3x their ad spend right at optin time, without selling anything. They had Sparkloop installed, and they were recommending a bunch of other Sparkloop-network newsletters.

Now a word of disclosure:

I have been using Sparkloop myself. Its little window pops up when somebody signs up to my new health newsletter. I have made money from Sparkloop. But it’s nowhere close to what this AI newsletter is making.

The fact is, I’m not making $4.20 per new subscriber… but more like $0.36, at least on day 0.

Still, money is money, and Sparkloop is helping me offset the cost of ads I’ve been running.

Plus, Sparkloop allows you to promote newsletters inside your newsletter as well, which means that if you email regularly and promote other newsletters each time you email, you can hope to make a buck or two more per subscriber in the very first month.

So there you go. If you have a newsletter, and have nothing great to promote yet… or you’re simply looking for other ways to monetize your email list… then try out Sparkloop. I’ve done it, it works, and I’m happy to recommend it to others.

You can sign up for Sparkloop at the link below. Yes, that’s an affiliate link. Yes, I will get paid if you sign up. No, you don’t have to use this link, and no, I won’t ever know if you circumvent my link and go straight to Sparkloop and sign up there. But in case you don’t want to do that:

https://bejakovic.com/sparkloop

How and why I might write a Substack newsletter

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Got a question three nights ago:

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You’ve written about the “newsletter economy” over the last couple of months. I’m on a few Substacks. Substack has this inbuilt mechanism where if you subscribe to a Substack then you get a pop-up which says, “Oh you might like these three or four as well.”

I’ve come at my newsletter growth from a sort of copywriting angle. I’m on Aweber which doesn’t have that functionality. I can see how that would be quite useful to have because it instantly gets people on your list.

Quite a lot of Substacks are growing quite quickly because of it. I’m thinking, is there a way to replicate that functionality somehow outside of Substack? How should I be thinking about growth more generally? Am I missing a trick perhaps by not being on Substack?

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My feelings: it’s absolutely worth getting on Substack. You can get free, large-scale access to readers… email readers… recent and eager email readers.

In fact, I’ve been thinking about getting on Substack myself. But I feel there’s a right way and wrong way to do it.

The wrong way is to write a bunch of daily emails like the one you’re reading right now.

Daily emails like this one definitely work — people will gladly read them and buy from them. But it’s not how I would go about writing a Substack newsletter, at least if I were going for massive organic growth.

I suspect — based on previous experience — that emails like this would lead to blowback from Substack readers and other Substack newsletters, or worse yet, to simply being ignored.

So that’s what I would not do.

If you are curious what I would do, and what I might actually end up doing, both to grow my list on Substack and to monetize it, you can find that out if you sign up to my Insights & More Book Club. Because the question above came up on the last Insights & More call, which I recorded and posted inside the members area.

The doors to the Insights & More Book Club closed tonight. I only open them every couple of months at the start of a new book, because it doesn’t make sense to have people join midway. If you’d like to be advised the next time the doors open, sign up to my email list, because it’s the only place where I make my book club available.

What’s working on Substack right now

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I’m currently subscribed to 27 Substack newsletters. Not all of those mail me anything regularly. But the ones that do have largely become my source of news, randomly interesting articles, and pop culture contact.

Since I write an email newsletter myself, every day, which you are reading right now, I’m very curious about the Substack phenomenon.

Could this be an opportunity for me? Should I start a persuasion-themed Substack newsletter?

Should I reposition myself as a Substack marketing expert?

Should I simply start publishing serialized fantasy literotica, inspired by Greek and Roman history, under some flowery pseudonym, and host it on Substack?

More on all those questions in a future email.

For today, I just want to share a bit of what’s working on Substack right now.

I recently signed up to Simon Owens’s Media Newsletter. That’s where Simon publishes his analysis of the media and publishing industry, including digital formats like Substack.

Owens’s most recent article says that across the media landscape, companies are struggling to corral new paid subscribers.

It’s not just Netflix, which I wrote about a few days ago. Other traditional and online publishers, from The Atlantic to Quartz, have either reached the limits to the growth of paid subscribers, or are actually seeing their paid subscriber numbers shrinking.

But as Owens says, “the longer you spend in publishing, the more you realize everything is cyclical.”

And so it seems the trend today in various publishing businesses is to loosen up the content behind paywalls… rely less on paid subscribers… and rely more on…

Ads.

Guess who’s back? Ads are back.

You’ve probably seen ads if you are signed up to any big-name email newsletter like The Morning Brew. The Morning Brew was bought a couple of years ago, for $75 million, on the strength of its advertising reach alone.

The Morning Brew has millions of subscribers. But even smaller newsletters, like Josh Spector’s For The Interested, which I wrote about recently, is making a healthy $48k per year, just by showing ads to a fairly small audience of 18k subscribers.

And what about Substack?

​​Well, Owens’s newsletter is hosted on Substack. And since the guy analyzes what’s working in media right now, you might conclude his own Substack might be a clue to what to do.

Owens does have a subscription option, but it’s only to be able to ask him questions. There is no content that is hidden behind the subscription. ​​

On the other hand, you can buy a 200-word ad in his weekly newsletter for $400.

Owens’s newsletter has fewer than 5k subscribers. Is $400 a lot of money just to reach some fraction of 5k people?

Apparently not, because the ad slot was filled in each of Owens’s recent issues. And perhaps it genuinely pays for the advertisers — Owens says that of his 5k subscribers, many are executives at big name media outlets or tech companies.

So what’s the point of all this?

No point. I’m just trying to give you a different perspective on how you can make money, even if you’re a hardcore direct response business, with a classic-themed daily email like this one.

The world is always changing. Exciting opportunities are popping up all the time. And the only thing that’s constant is the demand for ancient-Greece-themed fantasy literotica.

In other news:

I am not opening up my own daily emails to advertising, at least not yet. But if you’d like to read more articles like this one, and maybe see how I make money from my daily email newsletter, without ads and without a subscription, then you can sign up here.