Building a Multi-Million Dollar Newsletter | Matt McGarry (NEWSLETTER MASTERCLASS) | E003

Jan 2, 2024

Notes

Today, we're diving deep into the world of newsletters and exploring how you can transform your mailing list into a powerful revenue stream. Join Andy and our expert guest, Matt, as they share proven strategies, tips, and real-life examples to help you leverage your newsletter for business growth and sales.

Starting Simple

We kick off the conversation by acknowledging a hard truth: the majority of newsletter creators give up. It's a common theme across all content creation platforms, whether it's podcasting, tweeting, or newsletter writing. The key takeaway? If you're going to start a newsletter, make it manageable. Choose a format that you can sustainably write each week.

Growth Strategies from the Pros

Our discussion moves to growth strategies as I share my astonishment at reaching 27k subscribers and wonder how others have skyrocketed to 250k and beyond. We explore the journeys of massive newsletters like The Hustle, Milk Road, and personal brand newsletters from Cody Sanchez and Sahil Bloom. The secret sauce? A combination of time, typically over four years, and a focus on three growth channels: social growth, paid growth, and email platform growth.

Social Growth

Growing an audience on platforms like Twitter, YouTube, and LinkedIn, and then converting those followers into newsletter subscribers is a tried and true method. It's about leveraging your social presence to funnel subscribers to your newsletter.

Paid Growth

We delve into the intricacies of paid growth, discussing the importance of a good landing page, thank you page, and the Facebook pixel for tracking conversions. We cover the basics of setting up a Facebook ad campaign, targeting options, and the significance of video creative. The conversation gets tactical, with tips on finding UGC creators on Fiverr, writing effective ad scripts, and understanding key metrics like CPM, CTR, CVR, and frequency.

Email Platform Growth

This often overlooked channel includes strategies like email referral programs, encouraging subscribers to forward the newsletter, and cross-promoting with other newsletters. We discuss the nuances of creating a successful referral program, including offering easily achievable rewards and running referral giveaways.

Monetization and Beyond

As we wrap up, we touch on the monetization aspect of newsletters, emphasizing the potential of earning back your investment quickly through platforms like SparkLoop and Upscribe. We also briefly discuss the challenges of securing sponsorships and the importance of having a product or service to sell to truly leverage the power of a newsletter.

In conclusion, this episode is a treasure trove for anyone looking to start or grow their newsletter. We've covered the strategies that the pros use to amass huge followings, the importance of perseverance, and the potential of newsletters as a business model. Whether you're a seasoned creator or just starting out, there's something in this episode for you.

Transcript

Andy:Starting a newsletter is hot right now. It's very difficult to make a good newsletter.

Matt:Yeah. A lot of people quit, but that's just like any content in general. You start a podcast, start tweeting, 99% of people are not going to continue. And that's why it's a good reason if you're going to start a newsletter, start something that's somewhat simple to write every week. So that's probably a good strategy to go into.

None:Let's start from the beginning.

Andy:I'm at 27k it's unbelievable that a lot of these people have like 250k 100 plus k like I would love to hear from you like how the heck are they starting from zero I can go through my journey but you've seen newsletters go from zero to hundreds of thousands like What the heck are they doing to grow these things?

Matt:Yeah, it's really impressive. 27K is huge. I mean, it looks small compared to these other ones, but that's still a massive, massive audience, right? And a big business can be built on top of a list that's 10K, right? But so what do the big newsletters do to get there? So people I'll be talking about would be like The Hustle. It's at like 2.5 million now. Milk Road is at 250K. I worked with them. People like Cody Sanchez and Sahil Bloom are people I've worked with too. They're both at north of 400K or 500K for their newsletters, and they're just like personal brand newsletters. Yeah. So how do they get there? One is like, it doesn't happen in a couple of months. Like all of these lists have, I think they've been doing this for over like a minimum of four years. So it's a longterm thing. Yeah. Um, the way I like to think about it is I really break it down into three different growth channels. And so all, all newsletter growth really comes from these three different buckets or channels. So number one is social growth. And so growing your audience on social like Facebook, YouTube, really not Facebook anymore, but Twitter, YouTube, LinkedIn, growing that audience there, getting followers and subscribers on those platforms, and then converting them into newsletter subscribers. That's social audience growth. Number two, which I help a lot with is paid growth. So running ads on Facebook, Instagram, et cetera, to get subscribers. And then number three is one that's not really talked about a lot, but it still can be really effective, which is email platform growth. So this is like having an email referral program, have asking people to forward your newsletter to friends and they can sign up that way or cross promoting within other newsletters or cross recommending with other newsletters where they see an ad for another newsletter after they sign up for your newsletter. So that's email platform growth. That one's usually the smallest of the three. but can be a great source of quality subscribers because they're coming from other newsletters. So they're much more likely to read yours because they're already a newsletter person.

Andy:Yeah. I'm curious on that referral. Like what are some of the cool referral things that people are doing? Like that's what I'm curious about. How are they creating that loop of getting people to actually refer to their friends? which, as you know, those referrers are probably worth, I mean, a lot more, because they're friends, you know, asking them to join.

Matt:Yeah, they're friends, they're recommended, they're really high-quality subscribers. When I was at the house, I managed the referral program there, and a lot of people really struggle with it. A lot of people look at, like, what Morning Brew did, where they have, like, you know, five referrals, you get a sticker, 10, you get a hat, 15, you get a t-shirt. That doesn't work anymore. The novelty has worn off of that. And so what I recommend is having easy to achieve referral rewards for low referrals. So giving away something when someone gets one to three referrals, ideally like one, three, five. So it's very achievable because very few people are going to refer 15, 20 people to your newsletter. You don't know 15 or 20 people that are interested in the same topic. It's not really possible, right? True. That doesn't mean you can't have a reward for them too, but really focus on making really great rewards that are very achievable, like one to three referrals. And so what works best is usually digital products. So that could be like an e-book, a checklist. If you think about lead magnets, the same type of thing that would work as a lead magnet works really well as a referral reward. So that same type of digital product, like a PDF like that. Another one that works really well is shout outs. So, um, I have a friend that runs those news that are called Naptown Snoop or Naptown Scoop, excuse me. And, um, he has like, if you refer one person, you get a shout out when it's your birthday in the newsletter. Chanel of Growth in Reverse does like, if you refer five people, you get a shout in our newsletter and she'll give a link to your newsletter or your website so people can go and check that out. So that type of like cross promotion or like shout out marketing works really well for referral rewards too.

Andy:But it's like, it's stuff like that. Yeah. This is interesting. Cause I'm, I'm thinking through this too. And my first referral is a digital product. It's like 13 email sequences that like sell like crazy. It's just a lead magnet that essentially I made for the referral thing. People love that one, but you're right. I think I have a piece of swag that you can get, a distribute piece of swag, but you have to refer 15 people. You've made a good point. I'm like, shoot, it's cool, but I don't even know 15 people. you know, like that I referred this stuff to. So it's actually kind of common sense, but we forget about it a lot of the time, you know.

Matt:And I think it's okay to have that as long as you have that low tier reward. It's nice to give something like very like less than 1% of people are going to get to 15. Another thing that works really well is referral giveaways. Have you seen these? I ran a lot of these at the hustle. Morning Brew has ran a lot of these too. It's really simple. So basically you say you give away a prize. What worked best for us was Apple products like a MacBook, AirPods, stuff like that. People love that. And you basically say during this time period, it's usually a seven to 14 day window. When you refer a person for every successful referral that you get, you get one entry to win. And so the more referrals that you get, the more entries you get to win the contest. So it incentivize more referrals, but it also still gives people a shot at winning, even if they just have one referral. So it doesn't discourage people who don't have the ability to share. So those work really well. You can't do those every month, but if you can do those like once a quarter, they're really effective.

Andy:And so once a quarter is kind of that giveaway. And so just so I understand, it's like they do the entry to win for like a three month period or they're only doing it for a seven month period or I'm sorry, a seven day period.

Matt:Oh, like seven day. Yeah. Seven day. Yeah. Keep it short. Okay. Keep it short. Keep it short because like if you do it 30 days, it's too long. People forget about it. Yeah. But what happens if you do it 7 to 14 days, you know, you'll get a lot of referrals when it first started. And then in the last like 24 or 48 hours, you've got a lot of referrals then because of that urgency, because the prize is ending soon. You have to refer now to get in. Yeah. So I like that time period.

Andy:Nice. And the people they're doing that every once a quarter, they're kind of doing that type of giveaway.

Matt:Could be more once or twice a quarter. Yeah. If you do it constantly, people are going to get tired of it. Right. Yeah. But it works.

Andy:So it sounds like some of these like pros like yourself, they're just always testing new referral system.

Matt:Yeah. And you can test different prices too. And also of that, you're still giving away the, you know, the one tier prize, the 15 tier prize that you have. So it's a bonus on top of that as well.

Andy:That's the referral giveaway stuff, which is amazing. Now let's go to the paid side because. I follow your newsletter. For anyone listening here, definitely, I'm going to start recommending Matt on the back end here. It's called the Growth Operator, right Matt? A Newsletter Growth Operator.

Matt:Well, I have too many names. So, Newsletter Operator is the newsletter name. And then I have an agency called Grow Letter.

Andy:Oh, okay. There, that's right. Okay. There we go. So, y'all go check that out. But, okay. It's amazing. Like I read every one of your, basically your newsletters that come out because it's very, what I like about it is it's super tactical, right? It's not like super fluffy top of funnel, like, Hey, you know, like consistency is what matters. It's like, no, it's like, Hey, here's exactly how to set up your Facebook campaigns. And here's some actual ads that I'm running now that you can like go make, go copy basically and run yourself. Right. Which I, which I like, cause it's like, yes, I can go like implement this now. So, um, with that, you go into paid stuff in your newsletter. How the heck does someone start from zero on paid? Like I'm personally trying to figure this out right now. So this is why I'm curious. Where should we, where should someone start if they want to do paid? And then what the heck should they start doing? Like, I just want to hear from the beginning, right? Beginner kind of master.

Matt:Yeah, I can break it down. There's a lot of common pitfalls, but I'll help. I'll walk you through how to avoid those. And one of the problems people get really scared of paid or they have problems with it is because if you miss one kind of step in steps that I'll walk through, it's not going to work at all. Versus if you're just posting on Twitter and not every post is great, you'll still get better over time. But you can really screw up your paid marketing if you just forget to do something, if you don't totally understand it. So you have to understand the process and I'll walk you through it. Honestly, I'll do the best I can, but it is really probably best to go and check out one of my blog posts because the small details are really important when it comes to podcasts. Um, but so we'll start with like what platform to use. I like Facebook and Twitter. Um, I would say Facebook ads, um, meaning Facebook, Instagram ads, just the ad platform is the best place to start for 99% of people. So, um, the good thing about that too, is if you learn Facebook ads, pretty much all the other platforms, except for Google ads, um, are built off the Facebook UI. So it will look really similar. And so if you learn one, you can kind of learn them all to a degree. So Facebook is great. You also have to understand what your objective is, right? So we're talking about getting newsletter subscribers. This can work for lead magnets too, or leads, but we'll just talk about newsletter subscribers in this. And so you really need to have a couple of things in place before you run out. So you need to have a great landing page. You need to have a thank you page. And that thank you page, after someone subscribes to your newsletter, your landing page, they need to be redirected to a unique landing page. A lot of people don't have that. A lot of times they subscribe and it just says, hey, thanks for subscribing. It shows a success message. You have to redirect them to a separate URL. And this helps make your tracking setup very easy. It also gives you the opportunity to pitch other products on the thank you page and to do other things there. So you have to have those two things in place as well. And then the final thing is you have to add the pixel to your site. It's actually pretty easy to do this nowadays. Like a lot of page builders, you can just go into Facebook and copy and paste from the pixel ID. And so you want to add that pixel to all pages or website, but it definitely needs to be on your landing page and thank you page. Yeah. After that, you can set up your conversion tracking and you basically like a lot of people overcomplicate this. They want to use like Facebook API conversions or like custom code and all this stuff. But all you need to do is have the pixel on both of those pages. And then you need to create a custom version of it that tells Facebook, when someone reaches my thank you page, they are a newsletter subscriber. So it's not super complicated. A lot of people overcomplicate the tracking stuff. Enough if that's like the very point.

Andy:It's the most important because then you can't measure. If you don't have the conversion tracking set up, then you can't actually measure if your ads are working. So then you don't know how to tweak it. And I've set this up multiple times. And all it is, is you just say, Hey, someone has converted when the URL contains, thank you. Right. And then like, it's super simple to set up. Yeah. But most people miss this step.

Matt:Yeah. And that works really well. Like people, that's actually. It's a very accurate way to track. A lot of people want to make it more complicated, but it's been working great for our clients. Okay, so after you have that in place, you want to run a conversion campaign. Facebook now calls this a lead campaign. That's important, too. You don't want to run a different campaign type like traffic, because you'll get a bunch of traffic, but you won't get any conversions. And so you want to run the right campaign objective, which is leads or conversions.

Andy:Why leads or conversions? Does it matter?

Matt:Oh, those are interchangeable. It's just Facebook keeps changing the word, so don't worry about that. Okay, got it, got it.

Andy:Yeah, because every time I see them, I'm like, do I do lead or camera? What the hell is the difference here? Yeah.

Matt:Yeah, I believe the term they use now is leads, but like other platforms like Twitter, they call that conversions. But those are the same thing. OK, so we're going to set that up like after that, you select your targeting. The best targeting now is broad targeting. So this is just when you select an age range and in a location and you just let Facebook decide the target, you leave it up to the Facebook algorithm, which works really well. And so what we like to do is kind of set like a minimum age range, sometimes a maximum. If people are not buying your product who are under 25, then set a minimum of 25. And if people are not buying who are over 60, set a maximum of 60. Sometimes you can go broader than that. That works well. So broad targeting works really well. The other best type of targeting is interest-based targeting, which is pretty straightforward. You kind of think about all the things your audience would be interested in. So for me, that's like marketing, softwares like MailChimp, Behive, stuff like that. You search those in the Facebook dropdown menu. And you select those and they can also give you more suggestions. It's important that you select the right audience size too. So you want to have enough interest in there so your audience isn't too small. I recommend a 3 to 30 million audience size if you're doing interest-based targeting. If you're doing broad targeting, the audience is going to be much bigger because it's literally going to be anyone above 25 in the US, which is hundreds of millions of people. Finally, the most important part is ad creative. And we could have a whole call about this, so I won't

Andy:Yeah, this is where I really have questions.

Matt:Yeah, we can. I'd love to get to your questions on this, but like what really works best now is video creative. And it's hard to make video creative because it's, you know, you can make an image in Canva very easily. You can hire a designer, but making a video is way more difficult, but it's worth figuring out the time and money it takes to do that. And so the way I do that for our clients is we work with actors or a lot of times they call themselves the UGC content creators, but they're basically actors, right? They have a TikTok account, but they probably make most of their money by filming videos for brands, whether it's e-commerce or media or newsletters or whatever. And so those videos aren't super expensive. You're looking at on the lower end, you can get like a video for a hundred bucks. On the higher end, if you want to get something really well produced, it can be like 250 bucks. It's expensive, but it's not unaffordable for a lot of people. And so what we like to do is test two to three different videos.

Andy:Sorry, question on that. Sorry for cutting you off. How do you find these UGC creators? Like, are you literally just DMing them? Or like, is there a network you use? Or how do you do this?

Matt:Yeah, good question. It's easier than a lot of people think. Fiverr, like they've all kind of went to Fiverr. And so if you go to Fiverr, search UGC actor, UGC creator, there's dozens of different ones you can choose from. And they're actually really good quality. Fiverr isn't known for its quality, but like this type of gig on Fiverr works really well. And so what I recommend is just like, don't look at the ad they make for themselves. If you ever see on Fiverr, like people will make an ad for their gig. It's like, Hey, I'm mad. I'm a UGC creator. That usually looks really good, but it can be deceiving. You want to go and look at the examples of client work and see the video ads they made for other people. If those are good and those are natural and authentic, they're probably good to work with. They sound robotic, which is a common problem. And they sound low energy and they sound just like it's obviously an ad. You want to avoid that person. So we're looking for a natural, authentic, something that looks native to like TikTok, Facebook, Instagram, et cetera. You want something like that?

Andy:Yeah, got it. Okay, Fiverr. You know what? I didn't even think about going to Fiverr. That's amazing. And so they're filming like they're not doing super high quality like edits or anything. It's just them talking about your product basically like saying, Hey, I found this cool thing and it's a lead magnet creator. And you know, you can help generate leads. That's, it's kind of talking head stuff. Them walking on the street.

Matt:Yeah. A lot of, a lot of like selfie style or just like mount a camera, um, you know, in their house and that works best because it comes off as authentic. Right. It's usually good to write a script for them rather than have them do it from scratch. Although a lot of them can write the scripts for you. I do recommend writing the script yourself and I have a whole guide on how to do that, but it kind of, and we can talk about script writing too and get into that, but it kind of comes down to three parts. Like the most important part is having a strong hook. If you are on TikTok or Reels nowadays, like every video you watch has a really click-baity hook. And so we want to create that for our product too. And so we want to be able to grab attention the first five seconds from that. And sometimes it's good to even have like, use the same video of multiple hooks. That works really well too. So yeah, that's important. So basically you have a hook, you have the middle of your video, which is like where you explain the product and the benefits of the product or in the newsletter. And then the final part of the video is just a call to action. You know, click here to subscribe for free, click the link below, stuff like that. I have a whole guide on how to write scripts on my, on my website.

Andy:People can check out, but that's super complicated.

Matt:Yeah. Newsletter operator.com. Yeah. And you want the video to be under 30 seconds. So you don't need to write a super long script, you know, like even less than that, like 15 to 25 seconds can work really well.

Andy:How many video ads should you do from the, for the, from these UGC creators? Like, are you, are you doing three at a time? You say you're testing and then how long? Okay. Got it. Two to three is fine.

Matt:Yeah, two to three is fine. And so what I might do is like we do two to three different videos, two to three different images, and then maybe two different copy variations. I think this is where it gets a little bit more complicated, but it's not super, super complicated. So you want to be spending enough to get enough conversion. So usually we set the minimum spend to like $35 per day at the bare minimum. Usually we start at $50 per day with most clients. So you don't have to spend a ton. Sometimes if you're on a really tight budget, you could spend like $25 a day too. It's flexible. And so we want to let that those ads run for usually three to seven days to see how they perform. And so what you'll see over that time period is some of them will get a lot of impressions and conversions. Some won't get any impressions and some will be at your target CPA or below and some will be higher. And so after three to seven days, you can reevaluate if you want to pause some of those ads that maybe have too high of a CPA. And if you, if you did that, you can go and test more after that. So that's kind of how you do it. It doesn't take very long to see results. Yeah.

Andy:A few days at 50 bucks a day. So let's say three to three to seven days or whatever. Three days. Interesting. Okay. And I went through your course, right? You sent me a course that I don't know if you have it out officially yet. So maybe I got exclusive access, who knows. But in there, you mentioned the four metrics that you kind of look at. And let me pull it out. You have CPM, which is cost per 1000 impressions, CTR, landing page CVR, and then frequency, right?

Matt:Yeah, I can explain what those mean. So like you mentioned CPM already, which is Cost Per Thousand Impressions. CTR is click-through rate. So what percentage of people that saw your ad actually clicked it. CVR means conversion rate. So what percentage of people that visited your landing page actually subscribed. And then the final one is frequency, which is how many times a day someone saw your ad.

Andy:Yeah. And then so what are, what are your, like, what are you aiming for?

Matt:Yeah. So we need benchmarks around there. Yeah. So the Facebook benchmarks are pretty simple. And then this also really helps describe, like, this helps you evaluate if your ads aren't working, why they are not working. And so CPM, we ideally want a $10 CPM or less. Sometimes people get higher CPMs, but $10 or less click-through rate. We want 1.5% unique click-through rate or higher. Conversion rate, we want a 45% conversion rate or higher on our landing page. And then frequency, which is probably the least important of those four, we want 1.2 or less. So no more than 1.2 times per day someone sees your ads. And so why this is important is because if your conversion rate is too low, your landing page sucks. You have to improve your landing page. So if it's below 45%, work on your landing page, get it higher, right? You can just split test and you can just kind of start from scratch. Honestly, if it's really bad, you probably shouldn't do a split test. You should probably just fix it and try and make something completely better. Okay, so CVR bad, landing page bad. If your click-through rate is below 1.5%, your ad creative is bad because no one's clicking on it. So if that's the case for your ads, you have to make better ads to get that click-through rate up. And then finally, the one that's a little bit more of a black box is CPM. This is how much Facebook charges us to get a thousand impressions. And it's not completely within our control, right? But usually if you improve your conversion rate and your lane of vision, you improve your ad creative, your CPM will actually get lower. And so that's how you do it. One reason your CPM might be high too is if your audience is too small. And so if you target an audience of like a thousand people, you're going to have a really high CPM or even a million people. And so that's why we want to have a minimum audience size of over three million.

Andy:Got it. Got it. Okay. And then for the landing page conversion rate, right? Cause mine now for when I'm running is 25%, right? And so what are the common mistakes that you think people are making? And all mine is, is just like, it's a lead magnet challenge, right? Is what I'm doing. I'm messing around with this lead magnet, five day lead magnet challenge to get people in. And then we use distribute, right? That's like the whole goal. And with that, what I'm doing is yes, 25%. And when they land on the page, it's just an opt-in and like, I think an image or something.

Matt:Yeah, I like the simple pages. So I have to look at it. I think you're on the right track there. I can speak to some common mistakes. I recommend, or especially for a newsletter or a lead, we're just collecting the email address or maybe the name in the email address. You basically want it to be like a one section page, everything above the full. Basically, I can see the entire page looking at my phone or in my desktop. I don't have to scroll at all. It's even better if there's no scroll, I think. And so the elements you want to have are basically like a headline, sub-headline, form, button below the form, and maybe some copy or testimonials or images beneath that or on the side. But that's pretty much it. And so make sure it's that type of landing page. Don't make it very long. Of course, we have to look at it on a mobile too. The mobile experience for your landing page is more important than the desktop, of course, because a lot more people are going to see it there, especially with ads. Right. And then there's a lot of others. I have a whole nother article on landing pages that I can break down. But the key thing is just like having a clear benefit that someone's going to get right away when they join, including that in your headline. Right. And so that's really the most important thing. If you can show how you're going to help people immediately from the headline, they're more likely to subscribe. If it's more vague, it's a little bit harder. Like a lot of people in the newsletter space, they just put like join my newsletter or Matt's newsletter and they don't they describe like what their newsletter is, but not how it's going to help. And so. focusing on benefits and or maybe how your lead magnet or newsletter solves a problem will get you better results. But there's a lot to it and there's also not a lot to it. You know what I mean with landing pages? Like it's a pretty simple thing, but there's lots of nuances.

Andy:Yeah. Yeah. Interesting. And then, okay. And then let's say like we do this test, we get on Fiverr, we hire a few creators, we test three to five ads. We find a couple of winning ads, right? We're like, Ooh, this one, great click through rate. Great. You know what? Our landing page conversion is fine. Actually, what should we focus on first, right? I'm guessing before we get to landing page conversion, you should probably focus on click-through rate, right?

Matt:Really all at the same time. So like we talked about, you know, getting our ads up and letting them run for three to seven days. Let's see how they perform. So after that seven days, we'll say we want to look at our, all those four metrics we talked about, cook through rate, conversion rate, et cetera. And then at that point we can improve those to make our ads better. Right. So after seven days of our conversion rates bad, we would address that. But also you might have two problems. You might have a low conversion rate and a low cook through rate. So you have to address both at the same time.

Andy:And so say we had a, um, you know, say we were doing this and we find a winning ad, right? We're like, Oh, this click through rate's insane. It's awesome. Uh, right. Like everything looks good. What do you then do with that app? Do you, do you take it and then putting into a winning ad set or kind of like, what's your process once you find something that's working, do you turn off the other app and then test two more in the same ad set or what's kind of your, your strategy?

Matt:You can do that. So I think about the ad set level, like if you have an ad that's at or below your target CPA and you're happy with it, you probably don't want to add more ads to it because if it's not broke, don't fix it, right? So what you can do is if you want to increase the spend, you can do that. You can increase the spend by 20% per day and get more subscribers from that ad. Another thing you can do is try and get even better results. And so when you have a working ad, what I like to do is for, let's say it's a video ad, for example, you know, analyze the copy in that video and turn that into an image ad. Or vice versa. If you have an image that's working, what's the copy in that image? Why is it working well? And how can we make that into a video? And so just switch out the format. So that's one way you can do it. And so you're basically making more ads that can work even better.

Andy:Do you do that in a separate ad set or are you doing that in the same ad set?

Matt:So if it's at or below your target CPA and you're happy with that, I would do it on a separate ad set just so you're not messing with anything that's working well. If the results are kind of not up to par, you can do it in the same ad set because it's not going to get any worse by testing something new. It's only going to get potentially better. So people call it gardening. You're kind of like managing the Facebook ads. It's kind of like a gardening experience. Like you want to water things, you want to prune some things, but there's not an exact mathematical system to it.

Andy:And then you might've mentioned this, but what was, what was the CPA, which is the cost to get someone to give you their email basically in the newsletter case, right? For a free newsletter. What's your target for that? Was it four bucks or something like that? Or, you know, target would be a dollar, obviously.

Matt:But what's like their gold standard? Yeah, as low as possible, of course. So our average client CPA grow letter is $2, but it depends on your newsletter, right? You know, if you have a $100 CPA, but like everyone's buying, that's a great CPA. So it depends on different factors, right? Usually people are pretty happy with a $2 CPA, but you know, if you're a B2B newsletter of a small, high value niche audience, a $3 CPA might be good. If you're a really broad newsletter, it's just like lifestyle or like sports or something. You might want a 150 CPA or even even lower CPA than that. So it all depends. But like for U.S. audiences, usually $2 is really great, but less or more depending on your audience type. Wow. Interesting.

Andy:Super interesting. And then you're basically testing creative until you can You can get to that CPA, right? Like that's the goal there. Testing creative, testing landing pages, mostly creative, right? And then the UGC stuff, the video stuff. Now on that, are you ever doing like fancy edited videos, right? Where it's like super edited or anything like that, or you're mostly just sticking to the UGC stuff?

Matt:We keep it pretty simple. So like we edit the UGZ, we have an editor in house. Sometimes the UGZ creators want to do editing themselves and they're really good at it. So like we, we basically have like some zoom in. I'm not a great editor, but we have some zoom in outs. We have some cuts. We definitely have subtitles over a video. Subtitle is really important. We have background music for every video, but that's pretty much it. We've tested like some fancy animations. I prefer not to use those. I think less is more. And so that's my philosophy.

Andy:All right. Amazing. So now I think something interesting. Matt, that I personally want to learn is how are people using lead magnets, right? And you probably knew this question was coming, but what are some different lead magnets that you're seeing some of your clients use or that have worked super well in order to get subscribers specifically?

Matt:It varies a ton. I mean, Sahil and Cody Sanchez have had a lot of success with Lead Magnets. Depends on, like, they both have different things that they do with different audiences. You know, a Lead Magnet that's worked well for Cody is like, I think it's like 126 different boring business ideas. And so that's what her audience wants. And I think the type, like, Alex Ramosi has some great philosophies about Lead Magnets that I like. Usually what he says is they solve like a narrow problem. And so, like, for Cody, like, she's giving you the business ideas, but she's not going to teach you how to do every business. You have to read her newsletter and buy her products to learn how to do the business stuff. Right. Um, but we're, we're solving one part of that problem. I also like it to be really easily consumable. And so like it, like the 126 business ideas, it's like a two to three page PDF. That's it. Like you don't want to give someone a 10 hour course in the lead man. Cause they're like, they're just getting to know you. They just became a lead. They're not going to commit that much time and effort into a course or a 50 page ebook. So usually the shorter, very actionable, technical things work well as lead magnets. Every audience and niche is different, but that's kind of how I think about it. The process for getting someone to sign up is like, it's very similar to the newsletter, right?

Andy:And are you running paid to these lead magnets or are they mostly using them on social? Like just posting them on social and you- Both.

Matt:They work well as both. Yeah. Yeah. Sawhill is like crushed it on social of his lead magnets. We haven't actually done as much paid with his lead magnets just because his newsletter ads have worked so well. But Coded, we do a lot of lead magnet ads and those have our lowest CPAs, cost per subscriber, right? Sometimes as low as like 96 cents. Wow. Per subscriber from lead magnet.

Andy:Wow. And that's just paid straight to the lead magnet. Wow. Insane. Insane. Okay. We've talked about Facebook. What's your take on Twitter now? I know Twitter's finicky right now, right? Elon's trying to figure it all out. Everything's going on. What's the strategy on Twitter as it stands today? I'm sure in the future, it's just going to become like Facebook, exactly like it. Right. And so he'll probably just copy that identically. But like, where does it stand today? What are you doing? Are you doing audiences? Like, what's the process look like for you right now?

Matt:It's pretty similar. Yeah. So the layout and like UI is pretty similar. The ad platform is, it's, it's not as advanced at all, right? The targeting isn't very advanced. Um, it's kind of lacking some quality of life features. Um, they make it a little bit more difficult to work with, but the reason Twitter is worth looking at right now is because the cost is ridiculously low. Like our CPM on Twitter cost per 1000 impressions is like less than $2 on Twitter. On Facebook, our average is 10 or more dollars. And so almost 10x less expensive on Twitter to get someone to view your content. That doesn't mean your Twitter ads are going to be more effective than Facebook ads, unfortunately, but we've had comparable results. So a lot of times we'll have similar CPAs on both platforms, but sometimes we'll get higher quality subscribers or more customers from Twitter than we do with Facebook. So usually for clients we work with now, we usually test both Facebook and Twitter. And so if someone really wants to dabble in both, I think that's a good idea. But if someone's really just getting started and they don't have a lot of time, Facebook is still the best platform. Twitter can work well if your audience is definitely on Twitter. So a lot of the AI newsletters and AI publications we've worked with, they just crushed on Twitter because that's where that audience is. Same thing with sports or fantasy football or stuff like that.

Andy:How are you targeting people? Are you still doing super broad on Twitter right now or are you doing interest targeting?

Matt:Oh, good question. It's different. Yeah. So broad targeting doesn't work on Twitter. What Twitter has is called follower lookalike audiences. So you can go and look at Andy's Twitter account, Matt's Twitter account, whatever big influencer you want, and you can select them and you can target a lookalike of their followers. And so what you want to do is find Twitter accounts that your audience is following and select those in your targeting options. So that's what I recommend doing. That's the type of audience targeting that works best. And you probably want to have an audience size of just like Facebook, three to 30 million people. So you want to add enough Twitter accounts to get to that audience size that you can target.

Andy:Okay, interesting. So we've got Facebook, we've got Twitter, we've done this. Okay. Now, next question. So we've talked about two buckets. We've talked about the paid. What was the other bucket you mentioned?

Matt:We talked a little bit about referral programs. We talked a lot about paid. One quick note on pay before we jump into another topic is we talked about paying for subscribers, but what do you get back? We didn't really talk a ton about that. So the reason paid ads can work so well is because you can get that investment back very quickly. So for example, if we pay $2 per subscriber from Facebook or Twitter, we can use Sparkle and Upscribe, which we don't have to explain how that works totally. Basically, you can recommend other newsletters and get paid for those recommendations and you can earn one dollar per subscriber Sometimes more sometimes up to two and so if you pay two bucks per subscriber you earn two bucks per subscriber now your net cost to acquire a subscriber is zero and That's very common. We have a lot of clients getting like a break even cost when they're growing their newsletters Yeah, that's why pay growth is so attractive right now I suppose you can do that and then also you can sell those people your product where you're gonna get even more ROI

Andy:Yeah, and the boost, right? Beehive has that, I think ConvertKit has that, which is like, you know, someone subscribes to your newsletter, and then you recommend someone to, you recommend the person that subscribed to your newsletter to another one, and then you get paid for that, right?

Matt:Yeah, exactly. And the average earnings per subscriber is like $1 or $2. So you can, if you can get a subscriber for less than that, now you're breaking even or even profiting from your ad investment, which is awesome.

Andy:Interesting. Is there a strategy there to pick which? new newsletters you're boosting per se, or like making money when you're referring subscribers to them. I'm guessing.

Matt:Yeah. So yeah, that's spark loop and behave. They kind of have data on like which ones are going to give you the highest earnings per subscriber, but it kind of works now where it's like algorithm based. So you want to add like as many recommendations as are relevant to your audience. And then sparkly Ruby hive will pick the top ones for you and give you the highest earnings per subscriber. So you don't have to like do a lot of complex optimizations. You just, add as many as you can, really.

Andy:Yeah. Okay. And you're mentioning SparkLoop. I'm going to kind of put you on the spot here because right now I'm using like the Beehive boosts. Do you recommend using the SparkLoop boosts instead?

Matt:Well, this is where it gets complicated because we're talking about both of these platforms you can use to monetize and to grow. So you can use them to monetize your audience or you can use them to buy subscribers. And so I like both of them. SparkLoop is a little bit better for monetization right now, in most cases. And I have a little bit more for buying subscribers. So there's pros and cons to each.

Andy:Yeah. So it just kind of depends. Wow. OK. Matt, this has been amazing, my friend. Last thing before we head out here, because we talked about referrals, we talked about paid, and the last one is just social. you know, sharing, I guess, growing your newsletter just from doing organic social posts, right? What have you seen work? What doesn't work there, right? And there's probably a lot of things that don't work. But what's the strategy there for people like Sawhill or Cody? Is it just really you need a massive audience for it to really take off? Or what's- You don't need a massive audience.

Matt:I think one people miss is just having enough call to actions for the newsletter and having the right call to actions. So for example, I don't have a big social audience. I've grown to like, 12,000 Twitter followers, but I also have almost 12,000 newsletter subscribers, and I have a very high percentage of people that follow me that actually convert to the newsletter. And so if you're able to have a high conversion rate like that, you don't have to have a huge audience to grow your newsletter a ton. Right. Yeah. So I think I can't really speak to how people grow on social because there's so many different tactics and different content audiences. Right. Yeah. But what I can say is like most people don't have enough call to action. So like beneath your popular posts, whether that's in a reply or in a comment, pretty much every post should have a call to action for your newsletter or for a lead magnet. within your profile, you don't want to have a link to a link tree with multiple links. You should have a call to action for your newsletter or for a lead magnet. And that's how you get subscribers. And you should be including different promotions for your newsletter and lead magnet and giveaways and other places too to get subscribers. I think a lot of people just miss that. They keep posting, but they don't have clear call to actions and they don't do them often enough.

Andy:Yeah, interesting. So it's just including those call to actions a little bit more, right? Which is like, Hey, um, you know, under the LinkedIn, what I do sometimes I'll include in the post, right? If the post relates to something I'm writing in the newsletter, PS, if you want to see this in the newsletter, me dive more into this, here it is. But if not, I'll go to the comments on LinkedIn and I'll basically just say like, Hey, if you like this, you'll like my newsletter. I'll go to market, you know, B2B go to market, whatever. Here's the link. And then I'll get a good amount from there.

Matt:Yeah. That's like most, you have to have that in every, like one of those in every single bus. A lot of people just don't have that. They do that like 10% of the time, but you're doing it every single time, which is important. So that's really key. And also like optimizing your profile, like your profile is an ad to like follow you, but it's also an ad to click the link to go join your newsletter too. So you're going to get a lot of profile visits. So let's make sure we're converting those into subscribers and not just visits. Think of your profile like a landing page.

Andy:so next thing here is like let's talk about you figure you're getting subscribers you're growing right and now you want to like there's a classic uh like ad slots that you can do right and like let's talk about that because i think that's That's maybe the most common way, right? Is doing some of these ads for these. Like how, and I'm sure this is a question a lot of people have, how the hell do you find people to sponsor this stuff? Like, is there a network? Is there, I think he posted a list of like the 10 most common companies that sponsor newsletters at one point. You had a tweet on that and Masterworks and all these companies. But what's the strategy there? Do these people have salespeople going after these companies to get ad slots? Or is it mostly inbound? What's the whole thing there?

Matt:It's a tough business model, honestly. And so one thing I'll say before I get into that is you got to think about other ways to grow your business outside of sponsorships because it's somewhat commoditized, right? It's just attention, right? So that's going to go towards the biggest newsletters out there. So you're competing with newsletters who have 100, 250,000, a million subscribers. And so they're going to get the best sponsorship opportunities first. before you do. And it's really hard to get lucrative sponsorship opportunities until you have 50,000 subscribers. You can start getting small ones at 10,000 subscribers, even less than that for some B2B niches. But they're not going to be a ton of meaningful revenue until you're much bigger. And so it really is a game of scale. And you have to get to that scale and size for you to have a lucrative sponsorship business. And a lot of newsletters, you can still have a 7-figure business without that. So I'd love to get into sponsorships, but that's just one thing I'll preface it with. Newsletters really work best when you have a product you can sell people, whether that's an agency service or a software product or a course or consulting, whatever it may be. Newsletters really shine when you have that type of business model rather than just the media business model. But once you get to that level, there's really just three ways to get sponsorships. It's really a somewhat simple revenue model. You either have outbound, so you reach out to advertisers who are advertising other newsletters. You have inbound, so you just let your audience know that you're available for sponsorships, so you have kind of a promotional slot within your newsletter, you have something on the website footer, in your website menu, in social, just letting your audience know if they want to sponsor it, here's more information so they can. And then the final one would be other people selling your sponsorships. And so that could be listing your newsletter on a sponsorship marketplace like pave.com, or swapstock.com, or Beehive as an ad network, and ConvertKit as an ad network. Or that could be working with sponsorship agencies to sell sponsorships for you, and they'll take a commission of those. And so the agencies that I know best are MadRev, and I think AdAstra, I've heard good things about too. But basically, they're just like commission-only sales agencies. If you have a big enough newsletter, usually 50k plus subs, they'll work with you, they'll find you advertisers, and they'll give those to you and just take a cut. There's no additional cost. So those are the three ways that's, that's kind of what we'll work best. And it really comes down to number one most of the time. Yeah. Okay.

Andy:Interesting. That's crazy. There's these ad agencies that basically go outbound and take a cut. But you're saying until you have 50K, don't even worry about that.

Matt:Sponsorships are sort of like a CPM. So it's usually like a $50 CPM is good. Sometimes $100 CPM is you can do if you're a B2B or have like a high value audience, you know, it's a 10,000 subscribers and 50% open rate like that sponsorship, right? I don't know what that is. I think it's like, it's not a very lucrative sponsorship. You know, I forget, I have to actually do the math, which I will do now, but like, you're not selling sponsorships. Like you're, you're selling a lot of like hundreds of dollars sponsorships and you have to sell a lot of those to make enough money to pay rent. I mean, they'd be start, they become much more meaningful when you're bigger. Right. You can still start when you're smaller. It's like if you sell like, you know, 1%, 1% of your audience buys like a consulting call. If you were a course that's much more meaningful revenue when you have 10,000. Yeah.

Andy:Interesting. Okay. Got it. Got it. And next on that is like, okay, so I want to ask, I want to put you on the spot again here, which is I've distributed, right? You, you've seen distribute as a kind of, you know, we're early, but, uh, essentially what we're doing is it's a lead generation platform. You create lead magnets, generate leads, et cetera. What are some tactics you think I can do from the newsletter, Andy's newsletter, in order to push people to get the SaaS? And I don't know how much you read Andy's newsletter, but regardless, like maybe even better if you haven't, right? Like just in general, what do you think, Matt, would be good ways to basically push people to that SaaS and use the newsletter as a growth engine?

Matt:Yeah. So I'm just going to approach this as if, um, I own it and I have no context on like the previous newsletters or like what you want to do with it or other factors. I'm only going to focus on selling distributes. So there's, there's other factors in this, of course, too. So basically I would see like, what's, what's our ideal audience for distribute? What are the customers look like? Um, and maybe tell me about that first, like, are they creators? Are there, are they salespeople?

Andy:Salespeople, creators and solopreneurs slash, you know, so kind of creator slash solopreneur, people who want to generate leads. that don't rely on, want to rely on a marketing team to do a forum. So solopreneurs don't have a marketing team. Some salespeople that are wanting to take things into my own hands. Right. So it's those people that see like, Oh, I can create high value content and get emails for that, for my newsletter or for, I can call them, I get a meeting. So that would be the crowd.

Matt:So for this purpose, I'll just focus in on like, it's hard to do a newsletter, but that serves every niche, right? I prefer just to focus on one. So let's just say we're going to focus on creators and solopreneurs and like small education businesses. And so we want to generate more leads and more subscribers so they can sell them something or sell sponsorships or whatever. And so I would just rebrand Andy's newsletter to be completely focused on that audience and basically deliver the same, like have a weekly newsletter that delivers value to them every week. So for example, that could be Like every week I will share a tactic or strategy that's going to help you get more leads and subscribers for your business and focus on it's going to help you get more leads and subscribers for your solopreneur business or for your creator business. So identifying who it's for rather than just what it is. And so basically every week, it doesn't have to be a long deep dive like I do sometimes, but just one short tactic on how to use Distribute to get more leads and just do that weekly newsletter over and over again. I would keep it really simple like that. Right now you have... I haven't read your newsletter in a couple of weeks, but you have a lot of different stuff. It's like go-to-market strategies, social strategies, which could fit in Distribute, but I would dial it in really to just one thing related to the company. Yeah. Yeah.

Andy:So I think, I think you're right. Like niching down per se, getting more specific on, Hey, we help you grow, get more leads for your business. Right. And then getting every post to like go through how I do that with distribute or specifically just in general tactics that I'm maybe trying to do.

Matt:Yeah, and it could just be breaking down different lead generation tactics. And like, it could be someone else did a cool tactic. Maybe they didn't use distribute. Maybe they used a different tool to collect leads. But then you can say like, hey, you could have just did this with distribute and it would have been easier and like, you can show why the advantages are there. And so it doesn't have to be just like how you use distribute. It can be like examples and breakdowns how other people do.

Andy:Yeah. Um, you know, I was thinking about that this morning, uh, shower thought I was like, shit, maybe I should get more guests, people, guest posts on the newsletter. Right. I think it would work well. I mean, you've probably seen this more often than me, but like. Because you probably want someone who has a big audience as well, right? Because then they might share it to their audience and say, hey, I had a guest post in Mandy's newsletter. Is that a whole strategy that some of your clients are working on right now? And how do they think about that?

Matt:Not as much. I think it's great, especially when you have a newsletter of like 500,000 subscribers, you're not really going to do guest posts because it's just too much exposure for a person. You really want control over the content. But I think in that, like when you're growing zero to a hundred thousand range, it makes sense to do a guest post every couple of months. I've done a few, especially when you're like writing it yourself every week and like you really need some help there. I think it makes sense to have a, like a, a group of people you guest post occasionally with and do like guest posts for each other.

Andy:Smart. Yeah. To get supposed to find the other people do guest posts and that could be a way to get, get subscribers there. So that's interesting.

Matt:Yeah. And they don't have to create new content for your newsletter either, or vice versa. Like it could be something they wrote six months ago, but they make like an updated version of it for your newsletter. And so as long as the content is valuable and relevant to the audience, that's fine. It doesn't have to be new every single time.

Andy:It's more about value. Yeah. Interesting. Amazing. Amazing. Okay, well, Matt, this has been amazing. We just got a whole newsletter masterclass. The last question I'm gonna ask you before we go is, starting a newsletter is hot right now. And I feel like a lot in there, it's very difficult to make a good newsletter, right? That someone, you know, it's hard enough making a good social media post, but making a good newsletter is hard. Like it's hard for me and I've been doing it in this content game for a while. Like what's your take on where the newsletter world is going to go? Right? Like I have a feeling just like anything, most 99% of people that start one are, you know, I'm not being a little pessimistic here, but they're going to realize how hard it is. And so like, you know, what's your take on the future of this kind of newsletter hype that's going on right now?

Matt:Yeah. A lot of people quit, but that's just like when you start a podcast, start tweeting, 99% of people are not going to continue. And that's why it's a good reason if you're going to start a newsletter, start something that's somewhat simple to write every week. So like you're not going to write, you know, a long essay every week. You're going to write a five minute tactical guide or like you're going to share a certain number of links and you can start kind of simple. So you're not. having this big six-hour time commitment every week, because most people are not going to commit to that. So that's probably a good strategy to go into it starting with. What I see in the future is a lot of platforms like Substack and Beehive, as you've seen, has made it easier to start a newsletter. So a lot of people have jumped into it. And a lot of people, when the money isn't there, they'll stop. And that's okay. But then the best people continue to grow. So when that happens, I'll be okay with it because there's just less competition. But I think in the long term, we will see a lot more newsletters, especially from the biggest and most prolific creators and media companies, just because it's a necessity now. There's so much less traffic you're getting from social media that you have to have some type of owned audience, right? The traffic from Facebook and Twitter has gone down drastically to websites and media companies. And so you have to collect your audience's information and have a one-to-one relationship with them somehow. And really the only ways you can do that are with newsletters, podcasts, or some type of private community online. And newsletters are probably the easiest and best way to do that.

Andy:All right, well, Matt, it's been amazing, my friend. Thank you so much for jumping on. We're going to push this to our newsletter. Everyone go follow Matt on Twitter. He's getting active on LinkedIn, too, so I'm seeing that. Follow his newsletter, which is about how to grow a newsletter. I've learned a lot of stuff about general ad strategy from Matt. But we'll see you next time. Sounds good.