What You Can Learn From The Best Newsletter Businesses

0:00Welcome to Marketing School, the only podcast that provides daily top-level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Hsu.

0:20All right, we're going to talk about what you can learn from the best newsletter businesses. I'm going to give a couple examples first. What do we mean by newsletter? Morning Brew. That's one. Morning Brew, they update you with the latest business news each day. The Milk Road, great crypto newsletter. Axios, they got a lot of news in the VC world, investing world. So there's a lot of newsletters out there. E-Marketer is another one. and it's newsletter. It's just the email newsletter that you get that's keeping you updated on subjects that you're interested in. And we want to talk about what you can learn from the best newsletter businesses today.

0:50By the way, what do you think is the best newsletter business if you had to pick one? Agora. Yeah, I would say Agora too. Do you want to describe what Agora is? I was going to ask the question because you mentioned Morning Brew and others and you didn't mention Agora. Agora, I think is the biggest. I don't have a... Mention what they are. Tell them about what Agora is. So Agora is a financial newsletter. Think about like stock trading, hedge funds, economy. And they have a lot of different divisions like Stansberry Research, Agora Financial, Money Map Press. They're all owned by, I think the guy's name is Bill Bonner.

1:20And Agora, I don't know what they're doing this year, but I remember because we've done quite a bit of their marketing over the years. It's a billion plus dollar revenue company, and it may be a little bit down or a little bit more, but that's a lot of revenue to generate from selling newsletters on an annual basis. Just think about that. A billion plus dollars a year in revenue you for selling newsletters? I think it's impressive. I mean, you look at Morning Brew sold to Business Insider for an eight-figure amount, and now Morning Brew is doing like 80, 90 million a year, whatever. And the founders, they've done well for themselves.

1:54Congrats to them. And they started it when they went to Michigan. The Hustle, I think, sold for maybe $27,$28 million to HubSpot. And these are legit media companies. And the way I look at them is, I think these businesses are super... Axios sold for$553 million. And then Agora, to your point, You said high point was they're doing like north of a billion in revenue annually. So there's a lot of different ways to play it. But I think Agora probably played it the best because the other newsletters that I talked about are very advertising based. Whereas Agora, their monetization vehicles are for their own products.

2:26And so it could be like a mastermind or it could be a subscription that costs$5 ,000 a year,$10 ,000 a year. There's like proprietary research that they do. And they have a lot of events and things like that. And people that are really interested in money or making money, they're naturally okay with spending on stuff like this. And so I think my opinion on this for the newsletter business is there's a couple things. One, if you have a good monetization engine, let's say Neil and I, we both have ad agencies, right? If we were to build a newsletter, like a strong marketing newsletter, we would be promoting our own stuff.

2:58So we might be promoting our ad agencies. We might be promoting the mastermind that I have. We might be promoting Answer to Public or Ubersuggest, which is a product that Neil has. I think the best move is, sure, you can sell ads, but just like other channels, eventually, what I believe the best move is, is you are then promoting affiliate products or other people's products, and then you're building your own products to sell because that's where you're going to get the best margin for the most part. And Axios sold in 2022. But to give you some data, I'm reading this article. Axios sold Cox Enterprises for$525, pretty much the same price Eric mentioned.

3:31And in 2021, it says they generated 88 million in revenue and made 4 million in EBITDA. In 2022, it was believed, and they're owned by Cox now, so not really going to get the stats of the data. I don't think we will. But in 2022, it says they were targeting$110 million. So they sold for call up$500 plus million. Agora, let's say is 10 times the size of them. And I know some of the divisions and they, some of the divisions that I know we were working on generated way more profit than call it what they were doing. What was it? Four on 88. What is that? 5 % or so? Yeah, 4.54%. So Agora was more profitable, good growth, billion dollars.

4:13What is that? $5 billion business? I don't know. Probably valuations in this market is much less. But newsletters, it is a massive business. The big thing that I've learned from the newsletter business, and this was just me as a marketer, wasn't actually related to newsletters. It was related to the concept of if you can get someone in to your funnel, your marketing funnel for something really cheap, free, like an email address or something for a dollar or$5, it's really easy to start selling them things that are$100,$1 ,000,$10 ,000 takes a lot of work, but you can go upstream really quickly.

4:50And what I learned from Agora working from them is A, you need to go after a big TAM. TAM stands for total adjustable market because as a marketer, the bigger market you go after, the easier it is to do marketing because you can just spray and pray in essence, target a lot of people. So you don't have frequency issues with your ads. The second thing I learned from them is you just need to get people in the funnel and get them to buy something even if it's a dollar's worth because buyers are buyers and it's really easy to get people to buy more once they buy once, no matter how low that product was.

5:19But it's hard to get a new buyer to buy something, whether it's expensive or cheap. So just try to find something that you can sell profitably or break even on or lose a little bit of money selling, knowing that you can generate way more revenue in the long run from people. Great example of Amazon, right? Amazon will sell people. Sometimes they'll lose money with things like Prime, but they know they'll make the money in the long run because people keep coming back and buying more and more and it makes them really profitable. Yeah. The final few things I'll say, so what Neil was talking about is also known as a tripwire.

5:52So people in the internet marketing world will create a tripwire where you might sell something for a dollar or$10 or whatever. And the whole idea here is you collect a credit card, and then you can figure out how you can upsell, downsell, and things like that. Now, ClickFunnels is actually really good for this. So if you combine your newsletter with ClickFunnels, they're actually known for having the downsells, the upsells, and things like that. The final thing I want to say is I want to share a story around Agora. So back in the day, so Neil used to do, was a lot more involved with Agora. So they would put on events, they would do courses.

6:18So I actually shot a course along with Neil and we spent an entire day shooting this course. It was like in Burbank, California. And so what I'm basically saying behind this is that they are producing great content for the newsletters. They have a YouTube channel, they have multiple YouTube channels and different business lines. And what I learned from this is, I remember I went to an event a couple of years ago, right before the pandemic hit. And I learned from one of the founder of Agora, the Bill Bonner guy that you're talking about, I actually met him. And the one thing that he said that they do at Agora is that they share all the data, even though they have competitive business units, they're all trying to kind of beat each other.

6:50They share all the data and they're all kind of trying to help each other get better. So it's like competitive in a sense, but it's also like competitive, it's competitive greatness. That's what it ultimately is at the end of the day. And the thing I wanted to touch on what the course is, is Neil and I spent an entire day. Back up a little bit. They actually, you're so right. I remember they send out a daily email of sales numbers for all the different products for different divisions, even if they're competing with each other and it inspires the others and it makes them compete and crank even harder on their marketing.

7:20And not only that, I mean, what ends up happening, let's say Neil and I were in different business divisions at Agora. I might say Neil's numbers and it's like, oh crap, he did a million dollars in sales yesterday. What did he do? And Neil's not going to hold back. He's going to be like, yeah, here's exactly what we do. So they all help each other out. And I think that's the beautiful piece about it. What I wanted to touch on, and we can work towards wrapping here was Agora, when Neil and I were recording the courses, there was, I think there had like 10 or 15 people there, including the film staff.

7:47And that just shows how serious they are about building their own products and their own services. And I think that's impressive. So I think owning your own monetization vehicles, I think that is the way with not just newsletters, but any audience in general. So that is it for today. Please don't forget to rate, review, subscribe. Hit us on YouTube as well, and we'll see you later. We appreciate you joining us for this session of Marketing School. Be sure to rate, review, and subscribe to the show and visit marketingschool.io for more resources based on today's topic, as well as access to more episodes that will help you find true marketing success.

8:23That's marketingschool.io. Until next time, class dismissed.