Can a local newsletter make money from the newsletter alone?

Yes, there are newsletters like Morning Brew and B2B ones that make a ton from the newsletter alone. That's because each reader there can be so valuable. In a local newsletter, each reader just isn't nearly as valuable.

Can ads alone pay you a living?

Most local newsletters monetize by selling ads directly. Pay me $200 and I'll post about you as a realtor, the event venue, the dentist. You can make money that way. You're not going to get wealthy, and you'll barely make a living.

Someone in my mastermind asked how big a newsletter has to get to make $200,000 a year from ads. That's the wrong mentality. You could get there if you launched 10 of them, but that's 10 times the work. And a local newsletter doesn't pay off in any significant way until it's large, so you have to spend the money and effort before you expect anything back.

A veteran local news publisher I talked to put it more bluntly. He doesn't think anybody will make $100,000 from ads alone with a local newsletter. But becoming a local celebrity with a digital marketing agency behind it? He called that absolute gold.

Why is local ad money so hard to get?

Building a local audience is the easy part. People love it, engagement is high. The number one problem in this industry is monetization.

• Local advertisers don't buy on numbers. Nationally, you get in front of a marketing director with your open and click rates and they decide. That's not how it works in local.
• Most operators aren't salespeople. They're side hustlers with jobs or other businesses, and they hate calling local businesses to ask for $300.
• The only revenue is ads. One local competitor I looked at sells ads and a $10 a month paid tier that I'd guess about 2% of readers buy. That's it.

It's frustrating. On my podcast I put it to Justin Moore this way: we have a better product, more engagement and more readers than legacy local media. Our readers opt in, and we have the data to prove they read it. Yet most of us make way less money.

What's the Trojan horse model?

Have your own business behind the newsletter. That's where the gold is.

"I call it like a Trojan horse model, right? Where it's like, you're building this brand that's gonna make so many local people know, like, and trust you."

Say you're a financial planner hosting dinners for your readers. People talk to you, like you, and then you mention what you do. If someone needs a planner, they'll probably call you before they Google anybody. The question shifts from "how much can I make on ads or memberships?" to "can I make good money from the other business I run?" Simon Owens agreed with me on my podcast that it's a perfect fit for a local real estate agent, and my agency does this for real estate people.

The goal is optionality. Someone I know had only about 4,000 subscribers when one of the richest guys in town came to him wanting to buy in. How else do you get a meeting with the man who owns six multimillion-dollar businesses in town? It's what an audience on Twitter does for people, just hyperlocal.

Sell ads when you can. Ads just shouldn't be your reason for doing it. I tell business owners who partner with me to count on no ROI for a year, and the serious ones say they don't care.

What's the problem with a newsletter-only business?

Two things. Lower value per reader, and no public number.

"You could have 50,000 newsletter subscribers and... nobody knows it. It's a hidden number."

Unless someone is on the list, you don't exist to them. Instagram is the public number of your brand. A reel is easier to share than a newsletter. A newsletter is also limited on space. A website is not.

What should sit around the newsletter?

• Instagram first, then other social.
• A full website with real articles, aiming to show up in search and Google News.
• A local podcast.
• Events, for brand and relationships.
• A business directory.
• A job board. An operator in the Waco area got a sponsor at $1,500 a month just to have their logo and jobs on his job board.
• Referral partnerships with centers of influence in town.

An automated event calendar on the site replaces tools businesses pay about $100 to $200 a month for. Usually media companies and entrepreneurs start random directories as separate things. What if you put them together and made them good? There aren't seven ways to make money from a local media brand. There are something like 10,000.

Does more surface area take away from the newsletter?

I worried a website would make people pay less attention to the newsletter. I don't think it's a big issue. The bigger risk is adding channels that need brand new content. My test: does the new channel consume content you already make? If yes, add it. If it needs net-new production, wait until someone other than you can produce it.

How do the small pieces add up?

When I worked through the math on one ad going to 5,000 homeowners, small amounts from three sources added up to about $200. No single surface was big. Together they were. That's the idea behind the octopus model.

Newsletters are great as an additional thing. You don't want them to be your only thing.