E-mail publisher Larry Chase braced for the worst when he began announcing to his 39,500 subscribers that they'd have to opt into accepting standalone third-party offers to continue receiving his free weekly newsletter.
“I was ready for thousands of opt outs,” Chase said. “I was thinking, 'If I wind up with 30,000, I'm a lucky guy.' “
But ad revenue for the 6 1/2-year-old Web Digest for Marketers newsletter was way off.
“Last year, I was pulling $100 CPM for the top three e-banners and selling out three, four months in advance,” he said. “Then January was ominous. It was clear the market had softened up.”
To combat the revenue drop, Chase slashed his cost-per-thousand impression rates 40 percent, then another 10 percent. Then he tiered the top three ads, offering them at $50/CPM, $40/CPM and $30/CPM, respectively. Then he ran two-for-one offers.
“And that helped, but that for which I was getting $100/CPM last year, I could be getting anywhere from $15 to $50/CPM this year,” he said. “The good news was I could slash rates faster than the larger, more structured firms and still make a profit on it.”
Still needing to make up for the revenue drop, however, Chase considered charging subscribers for the newsletter, but backed off the idea almost immediately.
“I haven't seen a subscription model in this space work yet,” he said. “The other piece of that is, in an era when everyone is looking to cut costs, you're walking into a buzz saw if you say, 'Hey, that which you got for free last week, pay for this week.'”
What's more, Web Digest was a subscription-based newsletter for six weeks when it launched in 1995.
“These are different times from then, but what I learned then was the marketing and media costs of convincing prospects to pay … was far more than the cost of editorial,” said Chase, adding that he tries to keep e-mail acquisition costs under $1 per name.
The answer: list rental revenue.
So three times in August and September, Web Digest announced that to keep receiving the free newsletter, recipients would have to accept separate offers from relevant third parties in a standalone e-mail called FYI From Web Digest for Marketers “once a week, maybe less,” Chase said. “It was an all-or-nothing proposition.”
One reason for the all-or-nothing approach was to keep administrative hassles to a minimum.
“Part of the success of Web Digest is its simplicity,” Chase said. “I've never gone HTML because that would mean maintaining two files. It's not complex, but it's too much administration for no money. And I wasn't going to do it for no money.”
Besides the opt-out link Web Digest includes in every issue, the announcements included a special link so Chase could track how many subscribers opted out because of the change. In a typical week, Chase gets 100 to 130 opt outs.
The result of the initial announcements: 152 people opted out.
What's more, the FYI blast has twice resulted in a net gain in e-mail addresses.
“Now it doesn't happen every week, but on two occasions it has actually served as an acquisition tool,” Chase said.
On a typical Thursday before the FYI mailings, 15 to 25 people would unsubscribe, Chase said. Two weeks ago, 81 people opted out on the day the FYI e-mail went out. However, 104 opted in.
“Typically, I'd never have 81 unsubs, but I'd never have 104 new subs either,” he said.
Direct Media, Greenwich, CT, manages the property.
“It's a list of marketers for marketers, and that's what's great and unique about it,” said Tina Kearns, the Walnut Creek, CA-based account executive for Direct Media who manages the list. “Usually, [marketers are] a select of another list.” And e-mail lists with marketers on them are typically high-tech oriented, she said.