Friday, February 27, 2009

E-Mail Newsletters the Way to Go?

More and more web sites will be pushing newsletters into your inboxes in 2009. There is no contest when it comes to the economics of advertising revenues collected via e-newsletters versus CPM for display ads. For example, take the case of Dogster, which extensively uses newsletters:

- Use of Google AdSense can yield a CPM of 28¢

- Use of Glam Media, one of the highest-paying ad networks, would deliver a floor CPM of $2.
But that was still leaving a good amount of revenue on the table, especially considering an ad network takes half the gross.

- In addition to letting Federated Media sell some inventory, Dogster built its own Web sales force, setting CPMs at $8 to $20.

- But even that pales compared to what he charges advertisers per 1,000 views of an ad on his e-mail newsletter: a whopping $20 to $40

A few months ago, Comcast offered $125 million for DailyCandy based on newseltter advertising potential. Last month, Yelp! landed its first national ad campaign for its "Weekly Yelp!" newsletter. At first glance it may seem counter-intuitive that advertisers are willing to spend more money on advertising via low-tech e-mail newsletters. But as this BusinessWeek article points out:

"But remember that signing up for and opening an e-mail newsletter is a much bigger commitment than passively clicking on a link that takes you to a blog post. Publishers can see how many people open an e-mail, how long they read it, and how many friends they forward it to. Advertisers eat up that kind of engagement, because it's different, tangible, and more likely to result in an action such as making a purchase."

See BusinessWeek.com article for more: http://www.businessweek.com/technology/content/feb2009/tc20090224_035701_page_2.htm

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