Our newsletter has 2.5 million subscribers, but that’s not the number we actually care about.
In August, we hit a major milestone at Morning Brew: 1 million opens. A single edition of the Morning Brew newsletter was opened by over 1 million people.
For those who haven’t heard of Morning Brew, we’re a business media startup founded in 2015. Our marquee product is a daily newsletter that delivers the most important news shaping the business world.
While reaching subscriber count milestones is exciting, our primary focus internally is not on that metric.
Our goal from the onset was to build, grow, and retain a hyper-engaged audience. To keep ourselves pushing toward that north star, we measure ourselves not on our list size, but on subscribers that are actually engaging with our content–most cleanly measured by unique opens.
In this post, I’ll get into how this mindset of engagement over scale is actually put into practice in three main areas — the logistics of maintaining an email list, our referral program flywheel, and how we evaluate and optimize our growth channels. I’ll end with some of our more impactful insights and what I wish I knew earlier.
Before diving in: a growth strategy is nothing without its product and for Morning Brew, the strength of our product comes from our writers. Their ability to consistently create an informative and entertaining newsletter keeps readers coming back every day, builds brand obsession, and drives word-of-mouth growth. More than anything I’ll talk about in this post, the growth of our audience is because of our content team’s talent and creativity.
While I have your attention, I’ll start with the most boring but arguably the most important — the foundational layers of building a successful newsletter audience.
The first element here is an effective welcome email, the initial touchpoint with a subscriber in their actual inbox. This is ours:
The primary goal is ensuring our emails get delivered to the right place — they can’t open our emails if they don’t see them in their inbox. Since this is so important, our welcome email is super straightforward, focused on this singular goal as opposed to overwhelming them with content or trying to get too cute.
Once onboard, we have to do everything we can to turn this new subscriber into an engaged reader. To start, we test our subject lines four ways every morning (more on our content team’s approach to subject lines in this thread from Brew writer, Toby Howell). Each of the four subject lines is sent to 3% segments of our audience at 5am. The winning subject line by measure of opens gets sent to the remaining 88% at 6am.
We’ve seen open rate test results vary by as much as 10% depending on the subject line, which today translates to ~220,000 additional readers opening the newsletter as a result of the test.
For some of our most loyal longtime readers, the Brew is so ingrained in their daily routine that the subject line may not be a huge factor in whether or not they open. They’re going to do so regardless. But, for the thousands of people who are receiving the Brew for the first time each day, the subject line is the biggest lever we have to stand out in the crowded inbox and hook them in with our content.
Our data has shown that getting an early subscriber over the hump from 0 opens → that first open is crucial. If a user doesn’t open at all in their first few weeks, it’s unlikely they ever will. By testing every morning, we’re not only maximizing opens on each edition of the Brew, but we’re increasing our odds of converting our new users into lifetime subscribers.
Even with an A+ product, flawless deliverability, and an optimized onboarding process, there are always going to be subscribers who never engage or become disengaged. Some are out of our control, like users entering the wrong email address or subscribing with their work email and leaving their job. Others just lose interest.
Regardless, subscribers who aren’t engaging with our content aren’t doing anything for us except potentially harming our deliverability. Sending daily emails to users who are not engaging can damage your sender reputation, making it more difficult to reach the inbox. Our newsletters ending up in spam is quite literally the subject of my nightmares, so to prevent this we have a strict churning process in place.
A reader will enter our churn flow when they fall into either of these two buckets…
- A reader signed up 18 days ago and has not opened or clicked at all
- A reader has not opened or clicked in 90 days, regardless of their signup date
When either of these criteria is met, we send them an automated email asking if they’re still interested in receiving the Brew. Here, we remind them what the Brew is all about and give them access to recent content.
If they don’t re-engage within a few days, we remove them from our list and send them a notification email that we have done so, with one last opportunity to opt back in.
Churning disengaged users process does lower our total size, but we are doing so to prioritize our ability to reach the inboxes of our current and future engaged subscribers, and in effect, prioritizing opens over subscriber count.
Regardless of scale, ensuring the users you’re bringing in are both receiving your emails and engaging with your content early on lay the foundation for growing a healthy newsletter list.
Now onto some more fun stuff.
The Referral Program Flywheel
If you’re not familiar, Morning Brew has a robust referral program that has been core to our growth. It’s the flywheel that kicks all of our acquisition efforts into second gear, allowing us to efficiently grow our audience and strengthen our brand.
For a complete overview of the program: Check out our former product lead Tyler Denk’s behemoth of a Medium post. He outlines every element, the custom tech he built to bring it to life, and why it works so well.
For a less-complete overview: Our referral program incentivizes our readers to spread the word about the Brew. Each user has their own unique link to share with others . Anytime someone signs up with a reader’s unique link, they get the credit. As readers hit the referral milestones (outlined below), they earn rewards.
Thanks to the quality of the product, our readers are willing to take the step to share the newsletter with their network at an exceptionally high rate.
What makes the referral program so instrumental in building an engaged subscriber base is the type of readers it brings in. Our data has consistently shown that subscribers who come in from the program are among our most engaged group of users. When a friend goes out of their way to recommend you check out a new product, you’re likely to give it an honest try.
Unsurprisingly, we’ve also seen that after a reader refers a friend, their engagement with the newsletter strengths and their lifetime with us is on average much longer than that of a reader who never refers.
Tyler did the hard part — actually building it back in 2017. We could get away with setting and forgetting it, but because the referral program is so effective at acquiring and retaining highly engaged subscribers, continuing to find optimizations and keep it fresh for our growing audience will always be a focal point for us. We’re constantly running tests and making updates on every element from the rewards themselves, to the automated emails, landing pages and giveaways.
High-Quality Sources > Everything
While the referral program is an incredible growth engine, we needed to start bringing in subscribers elsewhere to really kick the flywheel into second gear.
We were fortunate to have such a strong monetization strategy early on that even as a bootstrapped company, we were able to start spending on paid acquisition starting in 2018.
When allocating our budget and optimizing our spend, it all comes back to the north star: Quality > Quantity. Opens > List Size.
For our hundreds of active sources, we are monitoring not just the cost to acquire a new user (CAC) but the high-quality percentage of each.
We define a high-quality subscriber as one that opens six or more of their first 12 newsletters. Two weeks is obviously short in the broader picture of a user’s lifetime with us, but our data has shown that a subscriber’s actions in this timeframe are generally indicative of their longer-term behavior.
If the source is paid, we evaluate everything based on its high-quality acquisition cost (HQ CAC). So for example, if a source has an acquisition cost of $ 5 per subscriber and 50% of those subscribers are high-quality, the HQ CAC is $ 10.
This allows us to make relatively quick decisions on the quality of a source — whether to ramp up, make tweaks or shut down based on this metric. Most importantly, it keeps us honest by making sure we aren’t just scooping up cheap subscribers who aren’t actually engaging with our content.
The variation of HQ% across sources can be extreme. We’ve seen sources bring in anywhere from 10% to 90% high-quality subscribers. Even within specific platforms, the range of quality on one ad set for example can be 30%, while another ad set is in the high 70s.
Across the board, the more ruthless we got in cutting off low-quality sources to invest in higher quality (but often higher cost) sources, the stronger our opens became. Today, we typically don’t have any active sources running with less than a 40% high-quality rate, ensuring we are pushing toward our goal of driving unique opens.
While it’s not baked into the HQ metric, we also take into account a reader’s likeliness to refer based on the source they came from and optimize for that. For example, one of our top ad sets in Facebook Ads has been a lookalike audience built off of existing readers who have referred before. Readers who sign up from this ad set have been more likely (as much as 4x more likely) to refer a friend than any other paid channel.
With this focus on engagement in our approach to growth, we’ve been fortunate to maintain a 42% unique open rate as we’ve scaled from 500k to 2.5 million subscribers.
In the pursuit of building a highly engaged audience, finding and optimizing sources, and scaling quickly, we’ve learned a ton. Here are some of the more impactful insights:
Diversify before you think you have to
If you’re looking to scale, diversify your acquisition channels sooner than later. Facebook and Instagram ads are obviously powerful, especially when you’re aiming for such a low-cost direct response campaign. Like many young brands, we definitely leaned into them heavily early on — they were super effective and we had limited resources.
As CPMs on Facebook started to creep up, we made a push for new channels. Naturally, it took more time to find efficiencies on other channels (since nothing’s easier than Facebook), but it ultimately paid off.
We‘re now at a place where we have a strong, diverse pool of sources doing work for us. At our peak, we were spending over 75% of our budget on Facebook Ads. It now makes up less than 15% and no single channel takes up more than 35%. If any of our current sources were to disappear or stop performing, we’d be able to make up for it elsewhere.
In the process, we also discovered channels that didn’t just match Facebook but actually outperformed it from both a pure quality and HQ CAC perspective. They just took more time.
If you’re looking for an engaged newsletter subscriber, don’t go too far away from the platform: email. People who like newsletters…like newsletters. As the podcast world has also learned about podcast listeners — it’s much harder to convince someone to buy into the medium than it is to grab an audience of existing users of that medium. Other podcasts are a great place to grow your podcast, and other newsletters are a great way to grow your newsletter.
We’ve sponsored ($ ) and cross-promoted (bartered) with newsletters focused on topics ranging from travel to wellness to personal finance to sports. Because of the broader nature of our product, we’ve been able to bring in highly engaged (and either free/low-cost) subscribers across a spectrum of topics.
In addition to other newsletters, we’ve had varying success with programmatic ad campaigns within email. Email-based is the only type of programmatic that’s worked for us in any capacity.
In general, native ads in emails just work. (Email firstname.lastname@example.org to sponsor the Brew if you don’t believe me 😉.)
Test and repeat
Allocate time and budget for tests — and accept that most will fail. To reach the scale we’re at, we had to be willing to put some resources into totally new channels with no guarantee of results. We had some big-time flops, but we also had some surprise successes that are still chugging today.
Finding the pockets of efficient, low-touch channels (even if their scale isn’t enormous) has allowed us to expand our responsibilities as a team and be flexible as budgets and platform performances have fluctuated during the pandemic.
Messaging 🤝 audience.
When we first started spending on paid acquisition, we worked toward some brand messaging and tested it thoroughly until we felt like we nailed it.
We scaled quickly, going from a couple dozen acquisition channels to hundreds in a matter of months, and used that same messaging everywhere. While it wasn’t horrible, there was a ton of untapped opportunity in optimizing the messaging for each channel, tailoring it to the platform and audience. For example, when advertising in other newsletters, language that’s focused on the email aspect like “Add this to your inbox” ended up performing well. While on social, longer-form reader testimonials typically perform best.
Figuring out how to tweak our messaging to align with each platform helped us ramp up across channels while still maintaining our consistent value prop.
Cost might change, but quality likely won’t.
Like I mentioned, we’ve tested into tons of channels. It can be tempting when you see a super low CAC (👍) but also a super low quality (👎) to want to give it time, continue testing and see if you can bring that user quality up. That low CAC is so appealing and you think of the scale you can achieve with it — just need a way to find the pocket of users who are actually going to engage with the product.
In my experience, it’s very unlikely that a channel can make drastic improvements in the quality department. They either have the kind of users that will engage with your product or they don’t.
On the other hand, when we start off with channels that have a high CAC (👎) but awesome quality (👍), it has definitely been worth our time and resources to figure out how to bring that CAC down. When you find a channel of any kind that’s proven it has users that are engaging and are right for your product, there’s likely an opportunity. Through continuous testing, it’s possible to get the CAC down into your range and turn into a viable long-term channel bringing in the users you want.
Ebbs and flows
When you’re trying to scale quickly, a week of “bad” growth can feel like a bad year. It can be frustrating. It can steer you off course, searching for some magical undiscovered acquisition channel that doesn’t exist. That lack of focus can end up hurting long-term growth much more than the bad growth week itself.
There are going to be bad weeks and there are going to be good weeks. Stay focused on what matters and the results will come.
Engagement beats scale: Inside Morning Brew’s approach to subscriber growth was originally published in Entrepreneur's Handbook on Medium, where people are continuing the conversation by highlighting and responding to this story.