Newsletter publishers say they continue to see uptick in revenue despite advertising slowdown

By Sara Guaglione

At a time when larger media companies are feeling the pressure of the economic downturn and advertising slowdown, publishers that center around producing newsletters say they are growing their subscribers to those emails and the ad revenue they are attracting with them.

Though some publishers are seeing ad revenue pace behind forecasts this quarter, newsletter publishers have been able to continue to attract dollars from existing advertisers as well as bring on new advertisers to their products, according to conversations with six publishing executives.

The Gist, 1440, Industry Dive and The Ankler are continuing to run profitable businesses and are not seeing the impact of the advertising slowdown on their revenues, according to their executives (Puck and Front Office Sports declined to comment on their profit margins). In fact, ad revenue is continuing to grow so far this year at newsletter-focused businesses, as are newsletter subscribers.

None of the six companies that spoke with Digiday have undergone layoffs since the economic downturn that began in the latter half of last year and most have plans to expand their teams this year. Advertising revenue at 1440, The Gist, Front Office Sports and Puck is continuing to grow this quarter, executives said, all of whom declined to share raw revenue figures.

Executives at The Gist, Puck and The Ankler said they have attracted new advertisers this year, while Front Office Sports and Industry Dive executives pointed mostly to larger budgets from existing advertisers as the reason for revenue growth.

This growth could be due to a variety of factors. Newsletter start-up companies like The Ankler and Puck are still in a growth phase. Other execs said their newsletters won over marketers who have wanted to pull back on brand awareness ads and shift to direct response campaigns.

“You [see] marketers put an increased focus on ROI and direct response. And that’s one of the great things about newsletters — it’s a push platform, and you can generate response. When you send someone an email, people take action. The newsletters see the ROI-focused advertisers really start to shift towards it,” said Sean Griffey, co-founder and CEO at B2B digital media company Industry Dive.

However, Katie Driggs, media director at ad agency FerebeeLane, said the growing media budgets going to newsletters is likely a result of the current economic climate, and advertisers experimenting with channels like email that allow for contextual targeting to prepare for a cookie-less future.

“E-newsletters are relatively inexpensive, trackable and provide advertisers with a great deal of flexibility. Ads can be contextually targeted and appear within editorial for a more native feel,” she said in an email. “With an uncertain economic climate this year, e-newsletters — and digital media in general — are the most flexible media channels if budgets change throughout the year… This is likely the biggest reason we are seeing this shift.”

Still, these executives said they are remaining cost-conscious given the economic climate. And not every newsletter-focused publisher has gone unscathed: Morning Brew told staff it was laying off …read more

Source:: Digiday