Latest / The Newsletter Podcast with Fexingo: Substack, Beehiiv, and Email Newsletter Business / How Newsletters Are Building Their Own Ad Networks
Transcript
- Lucas: If you run a newsletter with twenty thousand subscribers, you can probably get a sponsorship for around a thousand bucks. Maybe fifteen hundred if the topic is hot. That's a CPM of fifty to seventy-five dollars — way better than most digital display advertising. Luna: Right, but the problem is you're selling that inventory yourself. Cold emails, negotiation, insertion orders. It's a part-time job for most writers. Lucas: Exactly. And that's why we're seeing something interesting in the newsletter world: independent writers are pooling their inventory into shared ad networks. Think of it as a co-op model for sponsorships. Luna: So instead of each writer going out and begging for a single sponsor, they bundle their subscriber bases together and go to market as one larger audience? Lucas: Precisely. The classic example right now is a group I've been following: fifteen tech newsletters that together reach about four hundred thousand subscribers. They started a collective called the 'Indie Tech Ad Pool' earlier this year. Luna: And they're not on Substack's or Beehiiv's built-in ad platforms — they built their own? Lucas: Correct. They use a common sponsorship management tool — Swapstack is the popular one — but they set their own rates and approval process. Each newsletter keeps its editorial voice, but they share a single rate card and a single point of contact for advertisers. Luna: What kind of rates are they getting? Lucas: They're quoting CPMs between thirty and fifty dollars. That's on par with what a single newsletter with a hundred thousand subscribers might get, not one with twenty thousand. The collective gives the smaller writers leverage they wouldn't have on their own. Luna: So the math works for the writer. But what about the advertiser? Why would a brand buy a bundle of newsletters instead of just going to a big single publication? Lucas: Great question. For one, the audience is often more targeted. The Indie Tech Ad Pool is all tech newsletters, but each one has a slightly different niche — SaaS, cybersecurity, developer tools, design. An advertiser can buy the whole pool and reach a broad tech audience, or pick a subset that matches their buyer persona. Luna: And the CPM is still cheaper than, say, a trade publication or a major tech blog. Lucas: Often yes. But the real value is engagement. Email open rates for these newsletters average forty to sixty percent. That's unheard of in display advertising. So even if the CPM is similar, the cost per engaged user is lower. Luna: I want to talk about a specific case I came across. There's a cohort of five newsletters all focused on remote work — they launched a shared sponsorship marketplace in January of this year. Lucas: Tell me about it. Luna: They each had subscriber counts between five thousand and fifteen thousand. Individually, they were getting maybe two or three sponsors a month. After forming the collective, they saw fill rates jump forty percent within three months. And their average CPM went from around twenty dollars to thirty-five. Lucas: That's a significant jump. And I bet the sponsors were happier too because they could run a campaign across all five newsletters and reach a combined audience of about fifty thousand remote workers. Luna: Exactly. One sponsor told me they ran a split test — the same ad in each newsletter individually versus the bundle — and the bundle's click-through rate was twenty percent higher. They attributed it to frequency and trust. Seeing the same ad in multiple trusted newsletters reinforced the message. Lucas: That's the network effect. Now, there are trade-offs. When you join a collective, you give up some control over which advertisers run in your newsletter. The collective might accept a sponsor you'd have turned down. Luna: Brand safety becomes a collective decision. Lucas: Right. The Indie Tech Ad Pool has a shared approval committee — one representative from each newsletter. They vote on any advertiser that wants to buy the full pool. But if you're the only one who objects, you might get outvoted. Then you have to decide whether to run the ad or opt out of that particular campaign. Luna: So there's a governance layer that didn't exist when you were a solo operator. Lucas: Exactly. And that's why some writers prefer a looser model — something like a sponsorship marketplace where advertisers can pick and choose individual newsletters, but the collective handles the sales and payment processing. Beehiiv actually offers a feature like that called 'Ad Network' — they aggregate inventory across their platform. Luna: But Beehiiv takes a cut, right? Lucas: They take thirty percent on the ad network placements. That's not unusual for a platform, but it's a significant hit compared to a self-run collective where the cut might be ten percent for the organizing overhead. Luna: So the independent collectives are more profitable per subscriber, but they require more work. Lucas: Exactly. And that's the tension. The platforms make it easy, but they take a cut. The DIY collectives keep more revenue, but you have to manage relationships, billing, and quality control yourself. Luna: Is there a middle ground? I've seen some writers use tools like Paved or Sponsorgy that act as a marketplace but don't take as big a cut — more like a SaaS fee. Lucas: Yeah, those are interesting. They charge a flat monthly fee or a smaller commission — fifteen to twenty percent — and give you more control over pricing. But you're still essentially selling your own inventory; the marketplace just brings the buyers. Luna: It's like the difference between selling your own house versus using a full-service realtor. Lucas: Good analogy. Now, the bigger question is whether this trend scales. If every newsletter joins a collective, do we end up with a few giant ad networks that behave like programmatic aggregators? Or does the fragmentation actually benefit niche audiences? Luna: I think there's room for both. The remote work collective I mentioned is very niche — only relevant to brands selling to remote teams. That's a feature, not a bug. Lucas: Right. The value of these collectives is that they aggregate audiences with a clear shared interest, not just any random group of newsletters. That's what makes them attractive to advertisers. Luna: And it keeps the newsletters independent. They're not selling out to a media conglomerate, they're just cooperating. Lucas: Exactly. It's a cooperative model for the creator economy. If today's conversation was useful to you, the way these episodes stay ad-free is through listener support. You can help keep the show going at buy me a coffee dot com slash fexingo. Luna: Yeah, we really appreciate those who chip in. It lets us keep the conversations focused on what's actually working for creators, not on selling you something. Lucas: So back to the future of newsletter ad networks. I think we're going to see more specialization. Already, I know of collectives forming around sustainability, around investing, around parenting. Each one is a mini ad network for a specific vertical. Luna: It almost mirrors the old magazine model — where you'd have a group of special-interest publications under one roof, selling combined ad space. Lucas: Exactly. But the difference is these newsletters are independently owned. They're not subsidiaries of a larger publishing company. They're individual creators who decided to cooperate without merging. Luna: And the technology to manage that cooperation is getting better. There are now tools that handle revenue splitting, campaign tracking, and reporting across multiple newsletters. Lucas: Right. So the barrier to entry is lower than ever. If you're a newsletter writer with a decent audience and a few peers in your niche, you can start a collective this afternoon. Luna: Any advice for someone considering it? Lucas: First, make sure your audiences are complementary, not competitive. You want overlap in interest, not in subscriber lists. Second, agree on a minimum CPM and a maximum number of ads per issue upfront. That prevents conflicts later. And third, have a clear process for advertiser approval — one that respects each writer's editorial standards. Luna: It sounds like the social dynamics are as important as the economics. Lucas: Absolutely. A collective is only as strong as the trust between its members. If one writer starts running too many ads or accepting sketchy sponsors, it damages the whole network's reputation. Luna: So treat it like a partnership, not a transaction. Lucas: Exactly. And the best part? If you get it right, you can turn a newsletter that makes a few hundred dollars a month into one that supports a full-time income — without selling your soul to a platform. Luna: That's the dream, right? Independence and sustainability. Lucas: That's the goal. And it's one that more and more writers are finding through cooperation rather than going it alone.