Newsletter Economics: Arbitrage Opportunities

Newsletters as assets

At first, it’s a bit odd to think of an email newsletter as an asset.

It’s a hobby, sure. Or maybe a small business. Or an exciting addition to an existing media business.

But the fact is, newsletters are assets. You can buy, sell, develop, and trade them like anything else.

Although they’d hardly qualify as passive income, they can be automated, and often take less effort to run than you’d think.

The reason newsletters are such a strong asset class to consider is because email is rock-solid. Email is arguably where the Internet began. Spam is largely a solved problem, and the reason email works is because the protocol isn’t owned by any one company the way social media accounts are.

Love it or hate it, email is an undeniable part of who you are. It’s your “source of truth” for identity verification and life’s most important documents.

Newsletters are in fashion partly because they show who you really are. Facebook and Twitter weakened blog culture, but email newsletters seem to be picking up where blogs left off. They are a source of authenticity which took a big hit during the rise of social media.

Kyle Chayka was recently on the Means of Creation Podcast, where he talked about how social media has flattened and homogenized culture. In a New York Times column last week, Kara Swisher recently commented that newsletters are the “natural evolution of the creator-fan relationship.”

kyle chakra on means of creation podcast
Skip to 44:00 to hear Kyle’s thoughts about the impact of algorithms on culture.

Email newsletters are essentially immune to algorithms. Your inbox isn’t a feed, determined by a company. It’s more like a ledger. You may not open every email you receive, but that decision is yours to make, it wasn’t decided for you. You’ll almost certainly know it existed.

Email is here to stay. Anyone that says otherwise is wrong. Remember when Slack came out, and pundits claimed it could be “the end of email?” Yeah, that never happened, and never will. Not in our lifetimes.

waka foka flame
How I feel if someone says email is dying.

There is still tons of money sloshing around up & down the email newsletter stack. This week Intuit paid $12 billion for Mailchimp, in what may have been the single largest sale of a bootstrapped business in history.

Vox Media just bought Hot Pod News, a newsletter about podcasts. And who can forget the sale of The Hustle to Hubspot for $17m — a far cry from Morning Brew’s sale to Business Insider for $75 million, but still impressive.

Both of these companies reaped the vast majority of their revenue from sponsorships.

Why newsletter sponsorships are great

It’s getting harder & more expensive to reach customers through traditional digital channels.

In April 2021, Apple started giving users the choice to opt out of tracking in iOS apps. This was a very big deal for advertisers, who can no longer accurately track clicks, downloads, and purchases. (A whopping 96% of iOS users choose to opt out!)

ios tracking prompt
If you have an iPhone, you’ve probably seen this. This is a problem for advertisers, but it ain’t a problem for newsletters!

It’s not just an Apple thing either. Mobile ad blocking is on the rise, click fraud is still a problem, and Google Ad inflation means ads are more expensive than they used to be.

Newsletters have immunity to ad blocking

Newsletter ads don’t have any of these problems! You can’t block them, and you can’t completely ignore them. In fact, because of the form factor, you have to physically scroll past them to continue reading. Even newspapers didn’t have that luxury.

Advertisers are almost guaranteed impressions even if they don’t get clicks.

Newsletter ads are less invasive

Thanks to GDPR and a litany of other reasons, many websites have become borderline unusable, and people are getting frustrated. Check out this hilariously accurate example:

how I view the web
^ Check this site out, it’s excellent.

This is one of the more underrated reasons to sponsor newsletters. In many cases, a newsletter issue doubles as a blog post on the web, meaning the ad usually comes along with it.

Google encourages site owners to use the “rel=sponsored” tag. But many don’t, and instead make the ad’s link “nofollow” or even “dofollow.” Both are helpful for SEO.

Newsletter ads are a roundabout way to acquire backlinks, often from some very high authority sites.

Newsletter ads are more conducive to clicks

It sounds obvious, but subscribers are actively using their laptops & phones the moment they see your ad. Compare that to podcasts, where you may have your phone on you, but it’s in a passive mode.

You’re much more likely to click a simple link in a newsletter than you are to fetch your phone in the middle of the podcast, pause the podcast, open the browser, type out a search, etc.

Dealmaking heaven

Newsletter ads come in all shapes and sizes. Big ads that live up top, classifieds that hang out at the bottom, native ads, and everything in between. Because of this, the space is dealmaking heaven.

You can often negotiate with newsletter publishers to customize campaigns to your liking. Animated GIFs, multiple links, placement, colors, tone of voice, etc. Sometimes the editor wants to write the ad themselves, other times they let you go wild.

I’ve been doing this long enough to know which tactics work best. So allow me to share some tips for buying and selling newsletter ads.

How newsletter ads are priced

Sponsorships are typically priced in one of four ways:

Cost Per 1,000 Opens (CPO)

In the world of newsletters, all roads lead to opens and clicks.

CPO charges based on every 1,000 opens the newsletter gets. It’s a newsletter-specific twist on the popular cost per 1,000 impressions (CPM) used in other digital media.

On a CPO basis, most newsletters charge between $25 – $80. But $100+ isn’t unheard of for high-value audiences.

I’ve bought ads on a CPO basis, but never sold them on one. The main problem with CPO is that, thanks to Apple & others blocking tracking pixels, open rates are being under-counted.

This unreliability works in the buyer’s favor. As a buyer, you want to buy ads via CPO, because you’ll be charged less than you should be, based on how many people truly opened the email. As a seller, it’s the opposite.

Cost Per Click (CPC)

CPC is a simple way of pricing ads, but it’s actually pretty rare. Although tracking clicks is far more accurate than tracking opens, newsletters dislike pricing per click.

The reason is that they don’t want to be in a position where they are “punished” if an ad didn’t get any clicks. The way many newsletters see it, once they’ve run the ad, their job is sort of done.

At the end of the day if an ad doesn’t get many clicks, well, sorry but that’s just how it goes sometimes. Why should they be punished for it? Etc.

After buying & selling a hundred ads, I can state the following with confidence:

  • $2 – $3 CPC = Very good
  • $4 – $7 = Pretty good
  • $8 – $15 = Okay, could be getting bad
  • $15+ = Awful

Cost Per Acquisition (CPA)

Affiliate marketing is a great business model for websites, but somewhat less so for newsletters.

To be clear, advertisers love this method the most. But as you’d expect, newsletter publishers dislike it even more than CPC. Now, instead of charging per click, they also have to worry about whether or not the subscriber took an action — something they have even less control over.

Plus, this method relies on setting up tracking links, which is time-consuming and messy when it comes to affiliate cookie windows. If an advertiser has a pre-existing affiliate program in place, then sure. But otherwise it’s rarely worth it for either party.

Cost per Subscriber (CPS)

By far the most common way newsletter ads are priced. The general rule of thumb is $0.05 per 1,000 subscribers.

This pricing scheme isn’t linear — it starts to degrade as subscriber count goes up. For example, while a newsletter with 1,000 subscribers can reasonably charge $50 for an ad, a newsletter with 500,000 subscribers cannot as easily charge $25,000 per ad.

average price per subscriber

Also remember that not all ads are created equal. Full branded takeovers are a lot different than small classifieds. Ads at the top of the newsletter will always get more clicks than those at the bottom

Here at Alternative Assets, we are acutely aware of this. Since our newsletter is growing so quickly, we have a dynamic pricing model which is updated daily. This is essentially a real-time market for buying ads in our newsletter.

We’ve created three slots:

  • Slot #1 gets the most clicks and is the “baseline” price
  • Slot #2 gets 20% fewer clicks and thus is priced 20% lower
  • Slot #3 gets 40% fewer clicks and is priced 40% lower

Impressions matter too. While Slot #1 generates the most clicks, studies show most email openers scroll to the very bottom. So even though Slot #3 gets fewer clicks, it gets a disproportionally higher number of impressions given the price paid.

What this results in is an accurately priced, fully transparent set of options. Our advertisers can choose whether they’d prefer to maximize clicks (Slot 1), strike a balance between the two (Slot 2), or get the most cost-effective CPO (Slot 3).

Newsletter arbitrage

As you can see, not all ads are created equal. But more importantly, not all subscribers are created equal! And you can use this to your advantage.

When advertising in a newsletter, the operator will provide you with critical stats: subscriber count, open rate, and click-through rate. Most people care about the cost to reach each subscriber. As stated above, $0.05 is the rough benchmark average.

But if you have your own newsletter, your audience may be above average. It may consist of high net worth, highly engaged individuals who are likely to click on relevant ads.

There are lots of ways to define an audience’s value, but ultimately the proof is in the pudding. If you’re able to sell ads for well above the benchmark, then your audience is likely more valuable than others. And if your audience is more valuable than others, then take advantage of this easy arb opportunity.

Buy ads for $.02 per subscriber, and sell ads back to the marketplace or $.08 per subscriber. Easy peasy. Your growth pays for itself.

The metrics that really matter

However, there is a big difference between a newsletter with a 50% open rate (fantastic) and one with a 20% open rate (bad). What you should really care about is the cost per open, and especially the cost per click.

When planning new ad campaigns, I put these metrics into a custom spreadsheet and color-code them with conditional formatting. This helps me see at a glance how each newsletter stacks up among the rest in terms of the metrics that matter.

Here are some stats from actual newsletters (names hidden for obvious reasons) ????

spreadsheet showing price per subscriber
Before running a campaign, plug the numbers into a spreadsheet to see how the newsletter stacks up.

As you can see above, while Newsletter 2 has the 2nd lowest cost per sub and a decent cost per open, the high cost per click means you’ll likely pay far more to drive actions.

On the other hand, Newsletter 3 has excellent all-around metrics, and Newsletter 7 has the best cost per click of the bunch. I’d start with these two for sure.

More recently, I’ve been tracking not just the overall CTR, but ad CTR. Not all newsletters publish or even track this metric. The good ones do, but you’ll often have to ask them for it.

Having good metrics is no guarantee your ad will do well, of course. I’ve sponsored newsletters that looked great in this spreadsheet and then failed miserably. But it’s the optimal place to start. Plug in the numbers and scan for the green.

More ad buying tips

Buy ads in advance

As I mentioned above, since our newsletter is growing so quickly, we use a dynamic pricing model which ensures we are charging sponsors the most accurate price possible.

But not everyone does this. (In fact, I don’t know of any other newsletter that does this.) Most have a flat fee and update pricing a few times per year. This means future ad slots are worth more than the ones today.

So if a newsletter offers you a spot far in advance, take it. You’ll be able to reap the benefits of their growth without paying for it.

Space out & vary your ads

Running an ad a few days/weeks in a row is great for recall. Since not every subscriber opens every issue, advertisers like to purchase ad blocks to make sure everyone sees theirs.

This is mostly fine. But I prefer to space ads out over a long period of time. For three reasons:

  1. To take advantage of future ad buys above
  2. To avoid ad fatigue, which is very real and can be easily overcome.
  3. To give you time to recalibrate between ads. You want time to adjust if something isn’t working. Space ads out to give yourself time to try new ideas.

Start with just one

I’ve been burned on this a couple of times before. A newsletter offers you a good bulk deal that will save you cash, and you want to take it.

My advice: Always start with a single ad. See how it goes first. Even if the metrics look good, you never know how a specific audience is going to react to it.

Where to buy newsletter ads

I used to go reach out to newsletters directly. But lately, I’ve been getting more interested in the newsletter ad marketplaces which have sprouted up in the past year.


Swapstack is my favorite ad buying marketplace. The owner, Jake also writes the Premoney newsletter. Although their fee structure is questionable (they charge a fee to the buyer, not the seller, which baffles me), it’s clear they are continually improving the experience.

I’m especially excited about their new “Plug ‘n Play” feature — a way for newsletters to offer a flat-rate bounty for bringing in new subscribers. Anyone with an audience can promote a newsletter, and get a payout for each conversion. (Our bounty is currently $3 per subscriber)

It’s kind of like an experimental newsletter affiliate program. It’s still a bit rough around the edges, but very forward-thinking, and definitely worth checking out.

Swapstack is raising money through an AngelList RUV. Read our deep-dive analysis of Swapstack here.

swapstack example


Sponsorgap is a database of newsletters & advertisers. Founded by Tobi Hikari, the marketplace is paywalled, but it comes with an important and unique twist: They tell you who is sponsoring whom.

I don’t actually know how Tobi is tracking this, but it’s really interesting. With a paid subscription you can see which advertisers are sponsoring which newsletters (and vice-versa).

The homepage says “where newsletter and website creators find their next sponsor.” The latter of the two is intriguing to me… For website owners and micro-media companies seeking new sponsorship deals, newsletter marketplaces could become a good source of leads ????


Letterwell has a solid amount of inventory, and the outward-facing design is nice. However, the site feels a bit clunky & hacked together in some places.

That said, I have found some killer deals here — especially with international newsletters that are often overlooked. Sohum Shah and his team also provide excellent hands-on service.


Paved focuses on bigger publishers. They claim 2,000+ publishers and 253 million subscribers, or an average subscriber base of 125,000 per publisher.

The interface is solid, and you can track open rates, click rates, and engagement for all your newsletter sponsorships from one place.

However, despite spending lots of time setting up my account, I have yet to get a single lead from Paved! It’s a bit baffling, to be honest. I’ve received plenty of leads from the other marketplaces, but I’m finding Paved tougher.

Though the founder Marko is very friendly and supportive, this marketplace doesn’t seem to be geared towards sub-50k newsletters.


I actually just heard about Sponsy last week. They are new to the scene and still in beta, but their onboarding was smooth as a baby’s bottom.

A unique angle they have is that they automatically create a custom-built page for each newsletter, where sponsors can directly book slots. This is a hugely appreciated & valuable feature, and

Critically, they also have 0% fees — at least for the time being. Keep your eyes on these guys. I like where they’re heading.

example of automatically generated sponsorship page with sponsy
Sponsy whipped up this sponsorship page for us in about 2 minutes. Really cool.

Newsletter communities

You can usually find sponsorship & cross-promos from one of the newsletter communities scattered across Discord and Telegram. Newsletter Crew and Newsletter Geeks by Anne-Laure Le Cunff are my two favorites of the bunch.

There are also all sorts of cross-promo Facebook groups out there. Many of these are low-quality “follow for a follow” type groups. But others let legit dealmakers with traffic negotiate shoutouts and cross-promotions. Look around.

Different newsletter types

Within the current newsletter boom, there seem to be three main types of newsletters:

Editorial newsletters

These are newsletters that primarily produce their own unique content, chock full of original research, opinions, and commentary.

These newsletters are the most popular, take the most effort to produce, tend to have the highest engagement, and certainly have the most authentic connection with their audience.

Some examples I like:

  • Contrarian Thinking. Codie’s newsletter is the real deal. Insightful, funny, and most importantly, honest. I’ve learned a ton from Codie. The recent issue on 21 ways to cashflow had some great gems.
  • Concoda. Concoda bills itself as “An actionable macro and geopolitical newsletter that helps you navigate the craziest environment of all time.” The author is George Baker. He’s a bit mysterious, but I’m continually impressed with the quality and boldness of his thinking. I love the name. I love the newsletter.

Curated newsletters

Curated newsletters are a concise summary/recap of news, current events, and existing content. While they often have some original commentary.

These newsletters are easier to produce and usually still have pretty good click engagement, which is why they’ve grown like wildfire. It’s one of the easiest paths to clicks & growth.

However, curated newsletters don’t tend to rank well in Google at all. There is ultimately very little lasting value in this type of content.

Furthermore, there are lots of curated newsletters nowadays, and it’s getting really difficult to reproduce the success of Morning Brew or The Skimm (<– my wife’s favorite). Simon Owens, who often writes about newsletter economics, claims the market for daily news digests is getting saturated.

Some examples I like:

  • The Rabbit Hole. Rob Stretch is a midwestern marketing guy & domain investor who collects a dozen or so awesome links each week, along with snippets of commentary. And man, his links are good. I find myself clicking at least half of them.
  • The Donut. The Donut has the best design of any newsletter I have ever seen. I didn’t know newsletters could look this beautiful. The Donut sort of straddles the line between curation and commentary, taking the middle road on

Generated newsletters

This is the kind of newsletter nobody talks about. Generated newsletters are created by a script. Increasingly common in the finance niche, they are “stats-based”, rarely provide commentary, and are somewhat rare themselves.

But they’re certainly out there.

Speaking of which…

We’ve acquired Arkwatcher!

Arkwatcher is an automatically generated newsletter that tracks the buying & selling activity of Ark Invest, the aggressive technology fund run by the outspoken Cathie Wood.

We’ve sponsored the Arkwatcher newsletter in the past (the ads did quite well!), and got to know the founder, Stan. He’s a Python developer who built a script that generates the email every day.

Arkwatcher has been acquired by Alternative Assets
Arkwatcher is a script-generated newsletter tracking the movements of Ark Invest

Last week I happened to reach to Stan to see if he had any sponsorship availability in September. That’s when he told me no, he had recently lost passion for the project, and was actually considering selling the newsletter.

After doing some due diligence and understanding how the newsletter works, I jumped at the opportunity. We made a deal, and I agreed to buy the newsletter in full!

We are super excited to take over Stan’s fantastic newsletter, and bring a slew of high-quality investors under the Alternative Assets umbrella.




Stefan von Imhof

Stefan von Imhof

Stefan von Imhof is the co-founder and CEO of  With a background in alternative asset analysis, valuations, and due diligence, Stefan was born for this world. His alternative investing  newsletter has grown into — the world's largest alt investing community, with over 230,000 investors. Originally from Boston and later Santa Barbara, CA, he now lives in Melbourne, Australia with his beautiful wife.

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